It's a seller's real estate market in Boise

It's a seller's real estate market in Boise
Real Estate Market Report
BY GILBERT MOHTES-CHAN, TUESDAY, OCTOBER 11, 2011.
Inman News™

Metro Boise home sales in August jumped 30.7 percent on a year-over-year basis, to 1,180 properties, amid a seller's market. Even so, home prices continue to sag under the weight of distressed properties across the region. Short sales and bank-owned properties account for nearly half of all home sales.
At the same time, more than a third of homes with mortgages were underwater in the second quarter of 2011, according to CoreLogic, a real estate research firm.
This report highlights real estate market statistics and trends in the Boise metro area and includes a chart with detailed market data and commentary from local real estate professionals.
Overview
The average August sales price of an existing home in the greater Boise region fell 3.8 percent compared to a year ago, to $149,095, according to statistics from the Intermountain Multiple Listing Service.
Home prices are squeezed by a glut of distressed properties across the Treasure Valley -- which includes Idaho's two largest cities, Boise and Nampa. The result: Home values have fallen more than 36 percent since peaking in 2007, according to an August economic report by Moody's Analytics.
Real estate experts say a below-average level of for-sale inventory has created a seller's market. In Ada County, for example, the number of homes available for sale dropped below 2,500 for the first time since March 2006.
In a separate report, Re/Max reported that August home sales climbed 25.4 percent year over year, to 1,016 transactions, while the median sales price fell 7.3 percent from a year ago, to $125,000. However, the median price is up 4.2 percent from July.
Local data can differ because of differences in methodology, including housing types and geographic coverage. Despite the different methodologies, there often are parallels between percentage changes over time.
The Boise region is comprised of five counties and of two major and distinct housing markets: Ada County, anchored by the city of Boise; and Canyon County, whose largest city is Nampa. As the state capital and hub for commerce, the city of Boise is by far the state's largest economic driver.
For Ada County, August existing-home sales climbed 43 percent from a year ago, to 605 transactions, according to the Ada County Association of Realtors. While the median sales price dropped 7 percent year over year in August, to $156,000, that price is the highest so far in 2011. For-sale homes spent an average of 81 days on the market in August, down from 90 days a year ago.
In Canyon County, August sales rose 11.5 percent on a year-over-year basis, to 258, according to the Intermountain MLS. The median sales price fell 13.1 percent compared to August 2010, to $76,000. For-sale homes spent an average of 78 days on the market in August 2011, up slightly from 74 during the same month last year.
"The average and median prices have started to rise while inventory continues to fall," said Greg Manship, CEO for the Intermountain MLS.
Like many fast-growing communities hit hard by the real estate downtown, a backlog of distressed properties is hampering the Boise housing market.
"We have so many of those short sales clogging up the marketplace. The short sales tend to be 10 to 25 percent less (in value)," said Darrin Jaszkowiak, owner and associate broker for Re/Max West.
On the positive side, distressed properties in Ada County made up 45 percent of total sales in August, compared with 57 percent in January.
Indeed, August foreclosure activity in Ada County tumbled 35.2 percent from a year earlier, to 628 properties in some stage of foreclosure -- or 1 in every 250 housing units -- RealtyTrac said. In Canyon County, foreclosures plunged 43.9 percent year over year, to 397 -- or 1 in every 173 units.
Regionally, "the distressed market has fallen from a high of about 59 percent this year to about 44 percent this year," Manship said.
During the second quarter, 34.8 percent of homes with mortgages (45,278) in the Boise region were underwater, meaning the borrowers owed more on their mortgages than their homes were worth, according to CoreLogic.
Another 5.7 percent, or 7,354 homes with mortgages, were near negative equity. Overall, Idaho ranked ninth nationally with 23 percent of mortgages upside down.
In 2010, lenders repossessed 11,289 homes (1 in every 21 units) in the Boise City-Nampa area, a 2.5 percent increase from the previous year and an eye-popping 108.5 percent surge from 2008, RealtyTrac reported.
Last year, Boise ranked 20th among top U.S. metro areas in foreclosure rates, while the state ranked eighth nationally.
Re/Max pegged Boise's current active inventory in August at nearly 3,872 properties, down 65.4 percent from a year ago. In the past year, days on the market increased 6 percent compared to August 2010, to 88 days.
Intermountain MLS reported total for-sale listings in August dropped 14.7 percent year over year, to 1,674, while the average days on the market for for-sale properties dropped 4.5 percent.
"There's a shortage of inventory. Properties that are pretty well priced can sell quickly," Jaszkowiak said. He said homeowners aren't selling because of two factors: Either they are underwater with their mortgages or they're skittish about the economy.
Other real estate experts cite the collapse of new-home building in the past several years. Only now is new-home construction starting to pick up.
Economists and real estate experts said they believe the local housing market will see a marked improvement as the inventory of distressed properties diminishes and the local economy recovers.
Moody's Analytics predicts home prices will bottom out this year and then steadily rise each year, to $168,500 by 2015, a 25.4 percent increase from 2011.

Known for its potatoes, picturesque rural setting and highly touted recreational activities, including skiing and whitewater rafting, Idaho has been one of the fastest-growing states in the nation in recent decades.
Indeed, the Boise region saw a 92 percent surge in population growth from 1990 to 2010. Personal incomes also doubled over that same period.
New-home "construction was fast and furious and demand was even faster. Our numbers went way up over $250,000 and that couldn't be sustained," said Marc Lebowitz, executive director of the Ada County Association of Realtors. Communities to the west of Ada County were hurt more by the real estate downturn.
An economic rebound could be on the horizon. Boise is positioned for "slightly better than average" growth in 2012, Moody's Analytics predicts.
"The strong performance of health care and other consumer-driven service industries will drive the near-term recovery as the drag from housing lessens. Longer term, (Boise) must transition away from tech manufacturing for stability," wrote Moody's analyst Tim Daigle.
Over the next three years, Boise's population is projected to reach 710,000, up 15 percent from 2010. The majority of newcomers are forecast to arrive from Southern California and the Phoenix area, experts say. In its annual rankings this summer, RelocateAmerica named Boise the eighth best U.S. city to live in.
Boise should benefit from its low cost of living and pro-business climate. An April 2011 Moody's Analytics report lists Boise's cost of living at 96 percent of the U.S. average, while the cost of doing business was 78 percent of the national average.
Its employment growth ranked in the top quarter of the country and is predicted to rise to 84th out of 392 U.S. regions within four years. Its per capita income ranks at 85 percent of the U.S. average.
"I see unemployment being the key factor to the (housing) recovery. We have so many people who are underemployed or worried about keeping their jobs. They are hesitant about buying," Jaszkowiak said.
Lebowitz said new leadership and strategy at the Boise Valley Economic Partnership -- the region's chief business development group -- is starting to pay off. In the past, the group focused on recruiting large companies with huge payrolls. Today, officials are targeting smaller employers that could create several hundred hew jobs.
"We have pulled in two to three employers to the valley with 200 jobs," Lebowitz said. "We have passed recovery into moderate growth."


Boise metro area data

Population (2010)	616,651
Population growth (2000-10)	32.6%
Total closed sales (2010)	9,154
% change closed sales (2009-10)	11.5%
% change closed sales (August 2011 vs. August 2010)	30.7%
Sales per person (2010)	1 in 67 people
Average sales price (August 2010)	$149,095
% change average sales price (August 2011 vs. August 2010)	-3.8%
Foreclosure activity rate (August 2011)	1 in 220 units
% of sales distressed (2010)	about 50%
% homes affordable to median-income households	82.5%
% unemployment (August 2011, not seasonally adjusted)	9.0%
Walk Score	44

Sources: U.S. Bureau of Labor Statistics, Intermountain MLS, Ada County Association of Realtors, RealtyTrac, Walk Score, National Association of Home Builders/Wells Fargo, U.S. Census Bureau.

Sam Strickler/Shutterstock

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