Inventory Relief For ‘Priced Out’ Buyers In Idaho
The Idaho Statesman reports on the fading housing bubble in that state. “Relief may be in sight for Treasure Valley consumers struggling to find affordable single-family housing in a market where a dwindling inventory has driven home costs to record levels.”
“Developers and officials with local industry say dozens of new housing developments in the area, along with more than 30,000 building lots in the regulatory pipeline, may help hold the line on runaway costs that are pricing potential home buyers of the market. The increased inventory could give buyers the upper hand when negotiating to buy new homes.”
“According to the Intermountain MLS, there were 3,841 new and existing homes listed for sale in the Treasure Valley this week, 43 percent fewer than the 6,749 on the market during the first quarter of last year.”
“As more acreage become available for development, builders will no longer have to pay exorbitant prices for land, said Don Hubble, owner of Hubble Homes. He said his company recently had to pay $165,000 an acre for land in Meridian that had been appraised at $125,000 an acre.”
“Hubble said much of the available land for sale is being gobbled up by out-state-developers eager to benefit from the Treasure Valley housing boom.”
“‘That makes it more difficult for the rest of us to find land to build on,’ he said. ‘But if there are more than 30,000 lots coming online, that’s going to make a big impact.’”
“And the high number of new subdivisions in the works will mean more inventory for buyers, who now feel they must buy immediately or risk losing out on single-family properties, said Trey Langford. His most recent survey found 69 subdivisions with 15,041 potential lots in the works in Ada County. Canyon County had 96 new subdivisions with 7,195 lots.”
“The more homes available, the better for the consumer, Langford said. ‘Right now, if you don’t buy a home upon seeing it, you can figure you’re not going to get it,’ he said. ‘But with more homes on the market, consumers will have more choice, and the current seller’s market will become a buyer’s market.’”
“Home prices rose last year by 24 percent in Ada County and 31 percent in Canyon County. Wage increases in the area averaged 2.7 percent for the year. ‘A 20 percent increase in home prices is sustainable for a couple of years,’ said Jim Archer, of Hubble Homes. ‘But then what happens is you lose your market because people have been priced out.’”
‘the high number of new subdivisions in the works will mean more inventory for buyers, who now feel they must buy immediately or risk losing out on single-family properties..Right now, if you don’t buy a home upon seeing it, you can figure you’re not going to get it’
These statements seem odd on the backside of the housing bubble, but serve to remind us of the recent frenzy elsewhere. ‘Risk losing out’ in Idaho?
I remember driving through some of those areas in Idaho a few years ago. Yes, the prices were pretty cheap. They were cheap for a good reason. Remote, and no jobs. I thought about how wonderful it would be to live there. Unfortunately, I couldn’t even begin to earn the money I make in Auburn, California.
Unless your retired, or somehow making a living working out of your home, it would be difficult to make a mortgage payment.
30,000 lots ! That is enough land for houses for 75,000 people. Where are all these people coming from ? Have we had a population explosion ?
That is the funny thing about all this. Even if we didn’t have enough land, are we expecting or have we been experiencing a population boom ? Not that I can tell ! The demand for housing is constrained by population. We only each need about 1 house to live in. What do we do with the rest of the houses ?
30k 1 acre lots is only a square 7 miles on a side. BFD.
that’s the same size as san francisco.
And San Francisco manages to cram ten times as many people into that space. Modern developments are incredibly space-inefficient by comparison.
Well if we let in 100 million immigrants in in the next 20 years, there’ll be plenty of people to fill these places up.
Right, especiallly with all the good jobs we’re creating for them.
“The more homes available, the better for the consumer, Langford said.
Tell that to the consumer that bought last year at the elevated price when the house next door sells for 10% less this year. It’s called upside-down, and it keeps “the consumer” asleep at night.
“awake at night”?
Oops. LOL.
No , its not better to have a bunch of vacant houses with no demand .Usually that will bring down the prices ,but in this case the investors think over building brings the prices up . Some body has been leading the investors into bad investments. Just because something is cheap doesn’t mean it’s a good investment or that it will go up in value .
‘Colorado has reported the nation’s highest foreclosure rate for the second month in a row. Distressed home sales are saturating the market for properties under the metro area’s May median home price of $250,000, said Ed Jalowsky, a broker in Denver. A large number of homes at risk of foreclosure are being sold for less than the mortgages on them, adds Jalowsky, who was involved in one such ’short sale’ in Thornton on Tuesday.’
“Distressed home sales are saturating the market …
Once the ground gets saturated the dam bursts.
Translated to to homebubblespeak; the downdraft of short sales will pull other leveraged homeowners into the same situation. This is about the time somebody posts and expresses surprise at seeing short sales so very soon. I told you with information technology and exposure the lenders are not going to let these things get behind in either taxes or payments. Think about the worst case loans with negative amortization and intro rates. The banks have been recording the accrued but unpaid interest and principal on their books as current income. If one of these loans stops performing it doesn’t just hurt the bottom line going forward, it requires the bank to go back and restate past earnings and balances. That puts in danger not only their stock but their ability to lend as they violate margin requirements. No, the lenders are not going to wait at all this time and thus acellerate the fall. Summer Bummer.
How would you explain the drop in foreclosures in April vs. March? There may be many reasons, but intuitively, I thought we would be seeing a linear (or even greater perhaps) progression.
These little tracking services often have wide swings in their numbers. The record inventory in Colorado tells the bigger story.
$125k for an acre of land in Idaho…you gotta be shittin’ me…
I’d tell anybody to go climb to the top of a mountain, look around and then see if you believe there’s a land shortage contributing to those valuation levels.
You can bet if I were runnin’ the show the land barons would be payin’ property taxes on the highest and best use-aka subdvision, and not the agricultural exempt BS that they all hide behind until it comes time to sell out and retire to FL.
That would free up a hellava of land in a hurry…
‘He said his company recently had to pay $165,000 an acre for land in Meridian that had been appraised at $125,000 an acre.’
But no bubble here!
That sounds crazy. You can buy land for $2K-$3K an acre in the Ozarks. How can land be worth 50 TIMES as much in Idaho???
I lived in Boise 15 years and my wife is from the Ozarks. I think I can explain. Meridian is a suburb of Boise. Have you seen all the lists Boise has been making lately? Best place for business, best place for raising a family, etc. it’s been growing for several years now. Home of Albertson’s, Micron Tech, Boise-Cascade, and HP designs and makes its LaserJet printers there.
If you want to comapre apples to apples, compare the Ozarks with someplace like Salmon or Challis Idaho. I’ll bet those places have a LOT cheaper land than Meridian/Boise.
One is reminded of the old Eagles song:
“Call someplace paradise, kiss it goodbye.”
shhhhhhh…… don’t spread that around
“$125k for an acre of land in Idaho…you gotta be shittin’ me…”
My sentiments exactly. Somebody mentioned 2-3k/acre in the ozarks, which is still overprices. 1k/acre MAX.
“He said his company recently had to pay $165,000 an acre for land in Meridian that had been appraised at $125,000 an acre.”
“HAD” to pay? What kind of crap is this? They didn’t have to pay, and they didn’t have to build. I can’t even imagine paying $125,000 an acre up there. People have been forgetting one ‘biggie’ and that is LOCATION. I am not going to be paying these huge prices without the amenities that should accompany these price levels. First and foremost is the job market. Second is quality medical and dental. Third is low to high end shopping facilities. Forth is life style. Etc. And I haven’t even addressed the lowering of property values that should be attributed to weather risks such as flooding, extreme heat, hurricanes, tornadoes, water availability, environmental hazards, etc…..and the game continues as I hear of people (CA’ians) buying elsewhere saying ‘In CA it would have cost three times as much so it must be a great value’…..
something about worrying about being ‘priced out forever’ in Idaho makes me really queasy. Idaho, empty land with big valleys. Not even any really big destinations. Nice enough, I’m sure, no offense to any Idahoans. But the idea of runs on real estate there is just sickening. That’s not just a snakeoil salesman traveling the byways and gathering a crowd in ID, it’s him and his buddies messing with whole landscapes and trying to pitch their big big debt-creating scene-changing goods. It’s so immensely ugly. I wonder if I’m alone in feeling like clapped-together new construction, shiny as it may be, makes *every* house less desirable, taints it all. I wonder if the prospective buyers are not just worried about depreciation, or too tired to look at all the inventory, but at least somewhat just numbed and grossed out by it all…
It is the scourge out of CA that is causing this, the “equity locusts” - just do some reading over at the SDCIA message board and you will see what I mean.
Good phase ….”the equity locusts”
I got to start editing my spelling … Good phrase ..not good phase. I’m not good at typing but I am picking up a little speed .
Amen- Californians have killed the market here in Idaho and ruined the chance for a lot of people to get into houses in their own town. I do ok, but even I would have to over-extend myself to get into a house here in Boise without using an exotic mortgage that could burn me in 5 years.
i have seen alot of regular new sourses like CNN MONEY touting these places as being good investments like “the 10 best places to buy ‘ in the United States . I think CNN was talking about end-users ,or people retiring ,but the traveling group of investors pick up on it as the next good “flipping opportunity “.
I would love to see some challenges to those reports about the best places to buy…sometimes, when they talk about ‘best places to retire’, they act ually look at things like entertainment, ease of transportation, healthcare, etc…but much of the recent ‘best places to buy’ lately are ridiculously thinly veiled observations that if you live in CA or fl or NY right now, you can get a much bigger place in lovely Idaho. Or like Suze Orman taking calls from people on her RE special where she just tells them to buy in TX because it’s much cheaper there. Didn’t add a damn other bit of info, just that if you run over to that neighborhood, the beaniebabies are cheap compared to the ones they’re selling in SanFrancisco, so go scoop up a couple. This equity locust plague (yes, great phrase!) is in part, I think, fueled by how people now figure the starbucks will end up everywhere and we don’t actually need to get to know our neighbors anyway, so what’s it matter what your zipcode is? After all, there has been no structural change so far to make flipping inherently un-appealing or hard to do; you just gotta spot the next place to do it in. so sad…
i nominate equity locusts to join the list of housing lingos.
i have a suggestion that borders on brilliancy:
we call them “eL’s”
That is EXACTLY what they do! I got into it ovre at that site “SDCIA” with quite a few of them. Since then they banned me from accessing it…too funny!
can some one explain the problem here. I had a pal offer 440k on a house that was listed for 495k… but the owners paid 215k in early 2004. They did not even respond to my pal’s offer, and his realtor said that the listing agent was an arrogent c\/nt. What are these sellers thinking… they get to walk away with over 200k in 2yrs, and that is not good enough?? phuck the flippers and phuck the greedy sellers too… phuck em al.
I second you emotion .
Some rejections are an integral part of making low-ball offers. Your pal should look somewhere else.
“Treasure Valley”??
Not to pick on Idaho specifically, as I don’t know the region in question, but for once it would be nice to see some truth in advertising when it comes to naming cities or regions. How about, say, “Smoggy Valley” or “Ugly Suburban Blight Valley” or “Meth Valley” or “Welfare Valley”?
It’s been called the Treasure Valley for 150 years - the Civil War was financed by the gold the Union took out of the mountains behind Boise. Then there was all the different gemstones that were mined there. It ain’t called the ‘Gem State’ for nothing. To be fair to your point however, take a look at ‘Mountain Home’, Idaho and then go on over to the ‘Magic Valley’ around Twin Falls. Kind of like naming a god-forsaken glacier ‘Greenland’…
aaarrrrrrrgghhhhhh !!
i shouldn’t read humor like this at work.
Or “Superfund Valley”?
Rather close to the truth, I’d expect. Century-old mining techniques are hard on the land.
The house run up can almost be exclusively be contributed to Californians cashing out their equity. They sell their home in So Cal or the Bay Area for 700K, pay 300k cash for a big home here in the Boise area and they can live off the rest of the cash for a few years.
Most of you are right that there is a ton of land around here. The problem is that infrastructure cannot keep up (water, sewer, roads, etc.) or the rest is in the hands of BLM or the state. Land prices are really high where utility connections are available.
Eventually, more land will open for development and newcomers may recognize wages and career opportunities may not be enough to support their lifestyles- the bubble will cool.
Brandon- Idaho
Brandon,
It’s ridiculous that they say invetory has shrunk.. Look at this housing tracker..this says 70% increase.. that’s what i’m hearing from folks that live there as well.. whata you see http://www.benengebreth.org/housingtracker/location/Idaho/Boise/
Someone needs to do or find a story on interest rates. As I write this the DOW is down 175 points and all the homebuilders are at their 52 week lows. Everyone knows that Bernanke is going to have to hike rates because CPI is starting to ramp up, surprisingly because of rental costs. Furthermore, companies like Fuji and Dupont have announced that they are hiking prices across the board because of higher input costs.
It looks like the circle is getting completed. Low interest rates -> housing boom -> commodity boom -> higher inflation -> higher interest rates -> housing bubble burst.
The funny thing is that rent fed into the CPI ! This could feed on itself and make things worse as we go along because as people lose their houses they will have to… rent !
So.. where are interest rates going to end and what does this do to the housing market ?
Tweedle- The economic definition of ‘rent’ in the CPI is much more complex than non-homeowner in the classical sense you are thinking. This figure also includes the “rent” homeowners pay to themselves (aka opportunity cost). As the cost of owning a home increases so does ‘rent’ in the CPI.
You are half-correct in the circle being completed. We have peaked on one side and are now on the correction side of the circle. Trillions of dollars in ARMs start to reset this year. This make homeownership even more expensive and thus starting a repeating cycle of ‘rent’ increases in the CPI (4-5 years worth) and therefore showing as inflation. BB and the FED will continue to have to raise rates well into the foreseeable future.
I would strongly suspect that the actual rent numbers that are paid by true “renters” (non-home owners) have actually been flat for a number of quarters. I also belive this figure will fall considerably and could offset the gain in the rent inflation figure in the CPI. As home values decline, so do rents. There is a direct correlation.
I too am a native Idahoan. The best word I can use to describe the local real estate bubble is “frenzy”. Though, I can sense higher interest rates are beginning to take their toll, even here. The Treasure Valley has long been supported by an agricultural based economy. Thanks to “free trade” and the real estate bonanza … it’s now supported by construction/growth (sold farm land). When the RE correction occurs, it’ll effect the whole country … even Idaho.
I’m looking into moving to Idaho once some of my commitments here in New England are up. I heard the Boise area has good jobs in science and technology. Can any Idaho natives confirm or deny this?
It’s got SOME jobs in science and tech. The problem is outside of HP and Micron, there are few steady jobs. Plenty of startups so if that is your thing, you can bounce around them looking to get lucky perhaps.
nh-renter…Man, things must be pretty fookin’ bad in NH if you’re lookin’ to bolt to Idaho.
WTF is going on? NH continually vies for the top slot as the most livable state year and after in various media surveys. Always in the Top 3.
I took a scoot ride out in Idaho/Montana country years ago. Beautiful country in the Rockies. But there are big-big distances to be covered if you want to get to somewhere.
I also don’t think NE winters can hold a handle to the high north West.
Things aren’t so bad in NH itself. But the trajectory is downwards. People are getting much ruder, traffic is getting congested (at least in Southern NH), and there is a rapidly growing NIMBYist entitlement mentality in the state. The cost of living has been rising a bit. Basically I don’t like that New Hampshire is becoming Northern Massachusetts. It’s bad enough that I have to work in a Boston suburb. I really don’t want to deal with that mess at home!
I want out of New England and I’m just looking for some place to make a fresh start, preferably out West. Boise sounds surprisingly good based upon what I’ve heard and read.
My parents travelled extensively thru-out the US when my father retired 20 years ago. He said the Sawtooth Mountain country was some of the best topo he’d seen in his life. Hard to turn a buck, though…nothings there…
Southern NH is a mess, especially that I93/RT3 area. Nothin’ but subdivision sprawl and endless traffic lights.
Feeder roads can’t handle the traffic.
Least in MA you have the option of the T.
Took me 3+ hours to clear Nashua from coastal MA on a trip to Charleston.
But you are right-New England is a dead man walking.
My parents travelled extensively thru-out the US when my father retired 20 years ago. He said the Sawtooth Mountain country was some of the best topo he’d seen in his life. Hard to turn a buck, though…nothings there…
Southern NH is a mess, especially that I93/RT3 area. Nothin’ but subdivision sprawl and endless traffic lights.
Feeder roads can’t handle the traffic.
Least in MA you have the option of the T.
Took me 3+ hours to clear Nashua from coastal MA on a trip to Charleston.
But you are right-New England is a dead man walking.
If I had some money I’d settle in the New Hampshire lakes region. Great place to be. But I’m 26, just starting out and trying to raise a family. New England is a tough place to raise a family, and I suppose that’s the biggest reason why I want to move to a lower cost of living area.
HP and Micron are the big employers. I returned to Portland 7 months ago after living there for 13 years. It’s a great place to live if you have a good job/income. The quality of life there is first rate. Both HP and Micron have been downsizing since 2000 and like many places, real estate and contruction have been booming.
Contrary to what the article says, there is a HUGE amount of close in farmland that can be developed quickly and has been for some time. The zoning there is such that you will find residential, commercial, and farms/fields mixed together.
Hope that helps….
“Smoggy Valley” “Meth Valley” and “Welfare Valley” are already taken: San Joaquin Valley in California.
NH_Renter: Micron is by far and away the largest technology employer in Boise. There are several other “start-ups” … however, if you believe most of the views (on this blog) … they will become financially vulnerable when the era of “easy money/credit” erodes.