Valley No. 2 for home price rises

Joe Estrella
The Idaho Statesman | Edition Date: 09-06-2006

Observers differ on what 2nd-quarter national ranking means for housing market

Treasure Valley home values in the second quarter were up 29 percent from the same quarter a year ago, resulting in the second-fastest rate of increase in home prices among metropolitan areas in the nation, according to a federal report released Tuesday. Bend, Ore., was first at nearly 37 percent.

Among the 50 states, Idaho finished third, with a 20.14 percent increase. Average Idaho home prices have risen 55 percent in the past five years and 229 percent since 1980, the report said.

Nationwide, however, the increase in home prices showed the biggest slowdown in three decades. "These data are a strong indication that the housing market is cooling in a very significant way," said James B. Lockhart, director of the Office of Federal Housing Enterprise Oversight, which released the study. The office oversees the big mortgage-finance companies Fannie Mae and Freddie Mac.

"Indeed, the deceleration appears in almost every region of the country," Lockhart said. But in the Treasure Valley, the report proves the housing market remains strong despite a drop in sales since the second quarter ended June 30, said Dan Givens of Windemere Capital Group, a Boise-based real estate firm specializing in residential resale and new construction.

Givens said he expects local 2006 sales could still exceed the 13,074 transactions record in 2005. "I'd be surprised if we didn't catch that by the end of the year," he said.

Not everyone views the local market so positively. George Tallabas, a veteran real estate agent with ReMax Advantage in Nampa, said second-quarter data is already too old to reflect the softening local market. Quoting statistics compiled by the Intermountain Multiple Listings Service, which tracks area home sales, Tallabas said 1,247 new and existing homes were for sale Tuesday in the popular $250,000 to $350,000 price range — and they are sitting on the market an average 45 days. "That was unheard of a year ago," Tallabas said. "A year ago it was two or three weeks (on the market) at most. And what I'm hearing from (real estate) agents is that they're struggling, that their (sales) numbers are clearly down."

Ted Martinez, president of Tradewinds Building Co. in Boise, and a local representative to the National Homebuilders Association, predicted that housing sales will pick up again because area homes remain affordable compared with other markets. "What the market is doing is going through a correction, which it really needed," Martinez said. "It's getting down to where it's reasonable."

The federal report said second-quarter home values in the Treasure Valley rose 5.64 percent, which translates to an annualized rate of 22.56 percent. Idaho's quarterly rate of 3.78 percent translates to an annual rate of 15.12 percent.

Average U.S. home prices rose 1.17 percent in April, May and June, compared with 3.65 percent in the second quarter of 2005 — the biggest decline in price growth since the government started keeping track of home prices in 1975, the report showed. The agency cited higher interest rates and rising inventories of homes for sale as possible reasons.