Boise Real Estate Market Avoiding Subprime Problems
I continue to see many doom-and-gloom articles about the national subprime lending meltdown and how it is affecting various areas of the country.
The Boise real estate market seems to be avoiding the aftermath of the past few years of lax lending policies, according to an article in the Idaho Statesman on April 12th.
That article mentioned that U.S. foreclosures have spiked 42% in the past year, due to homeowners who bought their homes with subprime loans.
In contrast, Idaho’s foreclosure rate has remained low because our real estate market has seen some steady price appreciation over the past few years, thereby allowing borrowers to either refinance or sell their homes before getting into trouble.
While it is true that our median price has dipped slightly (about 1%), the Boise real estate market is by no means “crashing”.
And, homes in the Boise area remain relatively affordable compared to other, higher-priced areas offering a much less desirable quality of life.
I also think we are benefitting from the absence of large, national builders in our market.
We do not have Hovnanian, KB Homes, Pulte, Beazer and other national builders here, overbuilding and flooding our market with spec home inventory.
In some markets around the country, national builders have dumped so much standing inventory on the market that resale sellers cannot compete with the builders’ incentives such as free vacations, free upgrades, and even cars tossed in as incentives to lure buyers in.
Finally, the simple truth is that the Boise real estate market, as well as our population, is pretty conservative.
I think our typical homebuyer probably uses more common sense than is “common” in other areas of the country that got caught up in the real estate frenzy of the past few years.
April 15th, 2007 Posted in Uncategorized
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