‘A Booming Market Has Taken A Dramatic Turn’: Idaho
A housing bubble report from the Idaho Statesman. “Six months into a nationwide slowdown, the Treasure Valley’s runaway residential-housing market finally hit the wall in July, taking a dramatic downward turn, say area builders, real estate agents, mortgage brokers and economists. The July data ‘means real trouble,’ Boise economist John Church said.”
“‘There is going to be a reduction in (construction) employment,’ said Don Holley, professor of economics at Boise State University. ‘And as construction employment goes down, you’ll see lost jobs.”
“The decline is taking a toll on home sellers, too, to the benefit of some buyers. Nampa real estate agent George Tallabas said the growing inventory, coupled with a dwindling number of qualified buyers, is forcing some sellers to slash asking prices.”
“Especially hard hit have been sellers with homes priced over $250,000 and those who need to sell a house before buying a new one, he said. ‘Our agents are constantly coming in and saying, ‘I’ve got another price reduction,’ Tallabas said.”
“Nampa construction seems to be still going strong. But Tallabas said the contracts for those permits were probably written 60 days ago. With 1,033 homes for sale in Nampa alone, the true state of the Canyon County residential market will become evident in the next few months, he added.”
“‘It’s just simple economics,’ Tallabas said. ‘Contractors have over-supplied the market. And it’s going to take more than 30 days to wash all of that out.’”
“The change is most telling in Meridian, where building officials have spent the last year scrambling to keep pace with requests for residential building permits. This July’s $17 million in single-family permits was 74 percent below July 2005. ‘I think we’re going to see a correction; a significant correction,’ said Daunte Whitman, city building official.”
“Don Hubble, owner of Meridian-based Hubble Homes, blamed rising home prices on exorbitant land prices builders have been forced to pay the last few years. As prices soared, wages failed to keep pace, resulting in many potential homebuyers being priced out of the market, Hubble said. ‘So a booming market has taken a dramatic turn,’ Hubble said.”
“Trey Langford, operator of a Web site that tracks existing and proposed subdivisions in the Valley, said it’s gotten so bad some real estate agents with exclusive contracts to market subdivisions have had to go out and look for customers, when a year ago the phone never stopped ringing. ‘Some people are getting a little hungry,’ he said.”
“At The Mortgage Co. in Boise, owner Marianne Wake said some new loans are failing to close because buyers cannot sell their existing homes. ‘We’ve seen enough of that for me to be worried,’ she said.”
“Wake said the market is struggling because outside investment money has disappeared.”
“Those investment dollars aren’t likely to reappear anytime soon, said Lisa Vander, CEO of a California real-estate investment firm that has begun warning clients not to sink money into Idaho single-family housing. At those prices, investors cannot get the rents they need to pay their mortgages, she said.”
“‘The investment doesn’t pencil out for a $200,000 home, even with 20 percent down. It won’t cash flow,’ she said.”
Thanks to the reader who sent in this link. Another Idaho report:
‘The popularity of condominiums in northern Idaho has been increasing in the last year, and so have their prices — approaching $2 million for a luxury condo. ‘Condominiums used to be a less expensive alternative,’ Genca Sakwi, a real estate agent with Windermere Coeur d’Alene Realty, told The Associated Press on Monday. ‘But now I would say they are a different alternative. My family is investing in a condominium project in Post Falls,’ she said.’
“My family is investing in a condominium project in Post Falls,’ she said.’
When I lived in N. ID we used to call it Post Mortem.
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“Those investment dollars aren’t likely to reappear anytime soon, said Lisa Vander, CEO of a California real-estate investment firm that has begun warning clients not to sink money into Idaho single-family housing. At those prices, investors cannot get the rents they need to pay their mortgages, she said.”
“‘The investment doesn’t pencil out for a $200,000 home, even with 20 percent down. It won’t cash flow,’ she said.”
Wow, with that penetrating intellect, the world of brain surgery has lost a great talent . . .
Well you got to give them credit for admitting it.
Hold on, this is new, expecting cash flow or not buying wasn’t he case for the past few years as you expected increasing prices to bail you out and in some cases didn’t even bother to rent the places out. I find this to be a very positive sign of bubble bursting.
Positive cash flow?……I’ve never heard of such madness!
Damn, that’s all those flipper bagholders need to hear. People talking about rental properties having to cashflow.
The foreclosure tsunami will begin very soon, and probably reach its peak in 6 to 9 months. Soon after that the banks balance sheets will look like used toilet paper sheets. I invite everyone to post your prediction as to when (month and year) Resolution Trust Corporation v2.0 will be established.
Soon the vulture funds will come out and build portfolios with foreclosed property. Thining the herd is nomal and better for our economy. It is the cycle of life.
And I’ll bet most of them are too early to the party too!
The story did a good job of covering all aspects of the market and didn’t “spin” the state of the market in the style of NAR.
Our property market will come down in the biggest, hardest landing ever. Homeowners and consumers have so much debt, that when the ship goes down, they will drown in it.
AHHHHH, reality is beginning to sink in. It is nice for all of those on this blog to finally feel vindicated. It has been a long road but thanks to Ben and his postings, we can all rest peacefully and wait for the opportunities to present themselves.
Why wait? GMA contributor Barbara Corcoran said this morning that the lows are in. “Buy now! It’s August. It’s the best month of the year for homebuyers. And on top of that, we’re in a trough, we’re right at the bottom of the trough. So rather than trying to sharpshoot, trying to time your buy perfectly, forget about it, it’s a good time to buy right now, get out there and start putting in a low bid somewhere.”
Here’s a bit from an authors site:
‘Buy, sell or hold seem to be the biggest worries of home buyers and real estate investors in the 2006 residential real estate market. After solid double-digit appreciation in many major markets the last five years, investors and home buyers alike see the brakes on growth in 2006. Where to go?..Boise, Idaho. New on real estate investors radar, attracting scores of out-of-state buyers. Good profit prospects.’
Ben,… I went to the link and the whole list is too precious to hold out on everybody. I don’t know what this Mark guy is smoking but he obviously hasn’t read a newspaper recently. Here’s the whole thing… notice what he has to say about Phoenix of all places:
“Buy, sell or hold seem to be the biggest worries of home buyers and real estate investors in the 2006 residential real estate market. After solid double-digit appreciation in many major markets the last five years, investors and home buyers alike see the brakes on growth in 2006. Where to go? Mark Nash real estate author of 1001 Tips for Buying and Selling a Home lays out where investors and home buyers can make a go it in 2006.
Atlanta, Georgia. Below average appreciation rates that have not matched other major markets.
Austin, Texas. Good news here, affordable housing prices attracting employers. Rising appreciation.
Boise, Idaho. New on real estate investors radar, attracting scores of out-of-state buyers. Good profit prospects.
Dallas, Texas. Prices creeping upward, fueling investor interest.
Houston, Texas. Demand from Katrina transplants driving a strong market.
Las Vegas, Nevada. Market returning to normal appreciation rates, demand stays steady.
Phoenix, Arizona. Ignored in the boom, now being discovered by investors. Most cities here are bargain-priced.
San Antonio, Texas. Waking from a stagnant appreciation period. Good returns projected here.
Seattle, Washington. Good economy and low inventories offer attractive appreciation gains in 2006.
Milwaukee, Wisconsin. Solid Midwestern values speculate-proof this burgeoning market.
buy sell or hold….
what to do…..??
i think i’ll cross the “buy” option from my list, and check “not applicable” next to sell and hold.
that can mean just one thing: i must be alfred e neuman. nothing to worry about
Phx? ignored in the boom? WTF!? I GOTTA get me some o that stuff —at least 10x better’n crack.
If 30% YOY’s are being ignored, what’s he expecting?
The California Builders Industry Association just said that of the top 21 least affordable metro areas california has 20 of them, and LA is number. And all the writer can say is “With affordability a huge problem in the state, economists like Jack Kyser and John Husing and government officials like Bill Ruh of Montclair have devoted their efforts to the issue”.
they are part of the problem saying there is no bubble…
Heres the link to the article Ben
http://www.sbsun.com/ci_4229055
Idaho???
Idaho is one of those destinations that all the anglos from California are fleeing to.
So, what’s does “anglo” mean to you Bill?
An Idaho slowdown is partly a sign of less Californians (and other bubble areas) getting cash out (by selling or refinancing) and buying into ‘cheaper’ areas like Idaho.
Although there is still the ambient credit bubble that has slowed or stopped expansion.
Guess who this ISN’T gonna hurt? Check out this link at Slate.
http://www.slate.com/id/2148327/
A f…ing bubble in Idaho????
yup- median home price in Boise at the end of 2002 was 140k; now it is 240k. 71% increase in under four years.
`There is going to be a reduction in (construction) employment. And as construction employment goes down, you’ll see lost jobs.’
Thanks for clearing that up! It reminds me of the great quote, “If we do not succeed, we run the risk of failure.”
Let’s keep going. If we see lost jobs, we might see people getting laid off. If we see people getting laid off, we might see people getting notices that they don’t have a job. If we see people getting notices, we might see people that don’t have jobs and don’t get paid anymore. If we see people without jobs, we might see unemployment rising. And if we see unemployment rising, we might start noticing a reduction in employment. And as construction employment goes down, you’ll see lost jobs. etc.. (sorry if I duped)
yep. these geniouses are getting their soundbites watching reruns of ernest saves christmas.
which i might add is an insult to ernest.
nowhatimeanvern?
Awesome… I thought Dan Quayle was dead!
http://www.quotationspage.com/quotes/Dan_Quayle/
What a waste it is to lose one’s mind. Or not to have a mind is being very wasteful. How true that is.
“it’s gotten so bad some real estate agents with exclusive contracts to market subdivisions have had to go out and look for customers, when a year ago the phone never stopped ringing. ‘Some people are getting a little hungry,’ he said.”
Oh no, somebody help! Real Estate agents might actually have to work!!!
But we’re so special, people should just give us obscene amounts of money for doing nothing.