Welcome to the HeidiHartnett.com Blog

2018-08-03 16:20:09
Is the Boise real estate market coming unhinged?

Unless you're living off-grid, you've probably heard the Boise real estate market is going like crazy, prices are escalating quickly, and buyers are competing heavily with multiple offers from other buyers. It's brutal out there for home buyers, and sellers are able to secure an offer (or multiple offers) the first week (often first day) as long as the property is in good condition and priced $500,000 or less. 

The word on the street is causing concern as many local residents wonder if we are heading for a bubble and bust, similar to the Peak of 2006 and Ultimate Low of 2011.  

I recently attended a gathering of 30 seasoned agents and industry experts where we delved into the trends - trying to forcast best we can what may happen in the next few years, by analyzing what happened historically.  Here are some of the interesting take-aways: 

The demand is different in 2018

  • When the housing market busted last time, there were 87 people in the population for every 1 house on the market.  Today, there are 388 people for every 1 house on the market.  The demand is extremely strong, and it might take years for the builders to catch up to the demand.
  • The strong economy is providing more employment opportunities and higher wages, boosting consumer confidence and interest in purchasing.
  • Rising rents make buying a home more attractive for those who are able.
  • People are moving here to retire.
  • Those who lost housing in the last bust are financially ready to purchase again.
  • Millennials have good jobs and are ready to purchase now.
  • In-migration buyers from higher-priced states find Boise pricing affordable.

During the last cycle, people were selling homes in higher priced states and buying not just one, but often 2 or 3 properties, and speculating that they could turn these into investment/rental properties.  The builders starting building on speculation as well.  Once the market in other areas began to cool - the housing market here crashed because we ended up with more homes on the market than buyer demand.  As of right now, the buyers are different.  They are purchasing retirement homes or first homes, not so many investment properties.  

Also, lending and building regulations have really tightened, and are not allowing the pre-bust speculation building that was allowed in the past.

At the conclusion, all the experts concurred we felt the industry would remain strong for at least the next 3 years, but may not continue to pace as fast as it has the last few years.  There is concern about recent headlines noting the Californina market just took a large cool down.  “Our research shows many California residents may have reached their breaking point,” said Danielle Hale, Chief Economist for REALTOR.com®, in a statement.  Although the exodus of Californians continues to bring growth to Idaho, our economy has historically followed what happens there eventually, if not right away. 

Chart shows Ada County home prices up almost 17% over last year and inventory down almost 37%!  Market stongly favoring sellers in all price points except $800,000 or more. ($500,000 or more in Canyon County is a more balanced market.)

To chat further about the market your specific situation, please contact me.

 

 

 


   

 
Blog Archive
2018-08-03 16:20:09
Is the Boise real estate market coming unhinged?

2018-08-03 16:19:07
Open Homes this Weekend - Eaglecreek, Eagle ID


Comment on this Article

Your Name:
Your Email:
Comments:
Verify:  Please enter the numbers shown to help eliminate spam.