Nice article about home builders in the Boise and Eagle Idaho Real Estate Markets from the Idaho Statesman.
Scott Tutt, owner of Scott Tutt Building Co. in Boise, shrank his business during the recession to keep it alive. He built about a dozen homes a year, compared with 40 in 2006.
He watched longtime suppliers close, contractors leave the industry and employees in construction-related organizations lose their jobs.
“A lot of friends and businesses have gone away,” said Tutt, who builds 1,800- to 2,800-square-foot homes in the $200,000s.
They’re not going away anymore.
Tutt and other Treasure Valley builders say they’re building more homes than in previous years, and buildable lots are being snapped up.
Valley home starts climbed 55 percent in the first quarter from the same period last year, said Eric Allen, director of Idaho and Utah for Metrostudy, a real estate consulting firm that tracks new-home development nationwide. Consumers are feeling better and are taking advantage of the market conditions, Allen said.
“There definitely is a lot of momentum in the market right now,” he said. “Job growth is happening, interest rates are low, home prices are still low. We’re seeing a lot of buyers come out of rentals or doubled-up households.”
New-home sales for March were up 31 percent for Ada County and 46 percent in Canyon County from March 2011, according to data released Wednesday by the Intermountain Multiple Listing Service. January and February new-home sales also were up over the previous year. Median new-home prices were up by 6 percent to $201,558 in Ada County but down by 7 percent to $130,000 in Canyon County from the same month in 2011.
New-home permits in Boise, Meridian and Eagle have doubled in the first quarter this year compared with the same period last year, and more buyers are seeking houses in the $400,000 range, Schultz said.
“It shows that people are buying those less expensive houses and bumping people up as well,” she said.
Fewer than one in four builders who put up homes in 2005, the Valley’s last full housing-boom year, are still in business. About 770 builders pulled permits in Ada County in 2005, according to Bobbie Schultz, president of the Building Contractors Association of Southwest Idaho and owner of Jordan Homes in Eagle. Today about 170 companies are building.
James Clyde, of James Clyde Custom Homes in Eagle, said he took a break from building around 2005 because the market got crazy, with lot prices too high to be realistic. Clyde builds 2,400- to 6,000-square-foot homes up to the $800,000s, with most averaging $400,000 to $500,000.
“It got out of control,” he said. “I went fishing. I became a really good water skier for a year.”
He came back in 2006, building eight houses. The number of homes he’s built each year has gone up since, reaching 42 in 2011. Already this year, he’s worked on 35 more.
Ted Mason Signature Homes Inc. of Boise built 196 homes in the heyday of 2006, said home designer Rick Bradley. Last year the company built about 40 houses in the 1,600- to 1,900-square-foot range. So far this year, it has built or started about 30 more.
“We’re seeing a lot of different types of clients — first-time homebuyers, empty-nesters, single males,” he said.
Homes with unique designs and nicer finishes than most starter homes are popular with buyers today, builders say.
Membership in the Building Contractors Association, which had declined, has leveled off as old members call to get involved again and nonmembers ask how to join.
Buyers are turning to new homes because of the persistent shortage of existing homes for sale and because of good deals on new construction, said Kit Fitzgerald, an agent with Red Barn Real Estate and president of the Ada County Association of Realtors.
At the end of March, 2,794 new and used homes were listed for sale in the Valley, which is less than a four-month supply at current sales rates if no other homes were added. A six-month inventory is considered a healthy market.
Lebowitz said people are speculating about the effect bank-owned houses could have on recovery if they were put up for sale. But he said the increased level of demand and the rock-bottom inventory suggest the market can handle them.
The lack of supply means that multiple buyers are putting bids on homes. “It’s who can get it first,” Fitzgerald said.
Because of demand, prices are going up, and builders have stopped offering the concessions and discounts they had been forced to offer in the past few years, Fitzgerald said.
Increases in the cost of materials also are pushing home prices up, Clyde said.
“The time to buy is now,” Clyde said. “That’s what’s happening.”
The National Association of Home Builders forecasts that housing starts and sales will continue to climb for the next two years. The association also expects interest rates to be steady through 2013.
Local builders believe the Valley should see the same, but they have their eyes on the economy. “It will depend on job growth,” Tutt said.
Clyde said, “As long as the land prices don’t go skyrocketing again, we’ll continue to build.”
Sandra Forester: 377-6464
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