By Joe Estrella - Idaho Statesman
Edition Date: 05/20/07
The Treasure Valley residential real estate market has taken a wild ride the last two years, with sales soaring to record heights in 2005 and early 2006, then plunging back to earth in late 2006 and early 2007.
Almost overnight, the seller’s market of 2005 became the buyer’s market of late 2006, with thousands of new and existing homes languishing on the market so long that some sellers this year were forced to slash their asking prices.
But falling sales didn’t automatically mean falling prices. Homeowners often hang onto homes rather than cut sales prices. Housing prices remained remarkably strong during the downturn in late 2006, with the median price of a home in Ada County jumping to $249,900, or almost 16 percent ahead of 2005. In Canyon County the median price was $160,000 at the end of ‘06, an increase of 12 percent over the previous year.
It was March 2007 before housing values in Ada County showed a 1.3 percent drop from the same month a year ago. Canyon County fared a little better, with a 2 percent gain from March 2006.
Uncontrolled construction of single-family homes throughout 2005 finally caught up with the industry, a builder said.
Don Hubble, owner of Meridian-based Hubble Homes, said that in 2000 there were fewer than 2,000 listings on the Intermountain Multiple Listing Service, which tracks sales in the Valley. By late 2006 there were almost 6,000 homes waiting for buyers, Hubble said.
“By mid-2006, the supply outweighed the demand and it was definitely a buyer’s market,” he said.
Signs of a slow turnaround have surfaced in early 2007, although home builders and real estate professionals say a repeat of the red-hot 2005 market is unlikely.
According to Intermountain Multiple Listing Service statistics, housing sales in the Treasure Valley in 2006 were down 13.5 percent from the previous year.
Ada County suffered the brunt of the downturn, as the 10,113 transactions were almost 16 percent below 2005 totals. But Canyon County was not spared: 5,393 homes sold, off 9 percent from 2005.
Nevertheless, sales in Ada and Canyon County were 11 percent and 35 percent ahead of 2004, a year residential contractors say typifies a normal year for the local single-family housing market.
Jake Centers, head of Tahoe Homes in Meridian, said the 2005 boom was fueled by out-of-state investors who poured millions into area homes that they converted into rentals.
By mid-2006, however, waning investor interest and runaway housing production caught up with the market, he added.
“They (investors) just stopped looking, and it took a while for the market to react,” Centers said.
Centers said he expects 2007 to be a “stable” year.
“Everybody has cut way back on production,” he said. “So, we’ll go through the rest of the remaining inventory, and by 2008 the market will have completely corrected itself.”
But while housing sales were slipping in Boise, the Downtown condominium market boomed throughout 2005 and 2006.
BoDo developer Mark Rivers grabbed headlines last August when he proposed his $130 million Library Blocks redevelopment plan. The project would bring new housing, retail and office space to a blighted six-block area bordered by 9th and Capitol, and stretching from Myrtle south to the Boise River. The featured attraction would be a new $30 million Downtown library that would sit on the same site as the existing library.
Rivers said the slowdown in single-family housing should not hurt the Downtown condo market.
“It’s a market that is still emerging,” Rivers said. “So there is no historic data you can look at. But I think there is a lot of room left for a product that reflects urban living in Boise.”
Not to be outdone, Old Boise land owner Clay Carley and developer Gary Christensen announced their own ambitious retail, office and condominium project.
Carley and Christensen’s C-Squared Development LLC partnership plans a multiyear, multimillion-dollar mixed-use neighborhood development with a footprint of almost two square blocks, much of it in historic Old Boise.
Tentatively named Sustainable Community 1, the development would run from Main Street south to Front Street and from Sixth Street east to Fifth Street.
Initial plans called for phase one to include a 23-story condo tower where the Boise Rescue Mission now stands on Front Street.
Other condo projects under way include the CitySide Lofts at 13th and Myrtle, the Jefferson at 4th and Jefferson and the Royal Plaza at 11th and Main. Still to break ground are Boise Place, an ambitious hotel/condo development that would replace the ill-fated Boise Tower, and The Metropolitan at 15th and Idaho Streets.
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