Boise Real Estate: July Market Analysis
Here are my random musings on the three previous posts about July market activity:
- Positive: Meridian’s average/median sales prices are stable vs. a year ago’s numbers.
- Positive: Eagle’s listing inventory is down to only 318 homes (was 574 in July, 2008).
- Positive: Eagle’s vacant listings are down to 33% (vs. more than 50% for the rest of the county).
- Positive: Ada County’s average sales price declined only 1.9% year-over-year.
- Negative: Ada County and Meridian listing inventory has increased (not what we want to see in Summer).
- Negative: 57.1% of Meridian’s listing inventory is vacant.
- Negative: We sold fewer homes this July vs. last July despite lower prices and lower interest rates.
Observations:
- Market activity has slowed since the end of the federal tax credits, but the market has not collapsed.
- We are surely somewhere near “the bottom” (prices will not go to zero!)
- I remain concerned about our economy, jobs, and the possibility of a double-dip recession.
- It is stunning to see some homes in Eagle selling for half the price per square foot of just 3-4 years ago.
- Interest rates at 50-year lows, combined with today’s attractive prices, are what’s driving this market.
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No Responses to “Boise Real Estate: July Market Analysis”
By Chris G. on Aug 8, 2010
Phil,
Thanks for the analysis.
That Meridian vacant inventory…is it mostly builder inventory (ie never been sold) or is it foreclosures/OREOs (ie previously owned by someone who couldn’t afford it, or by a speculator)? Looking on the MLS, it looks more like builder inventory, but I don’t have eyes on the ground.
Tx,
-Chris
By Phil Hoover on Aug 11, 2010
We have very little standing, unsold new inventory offered by builders because we have few surviving builders.
Most of the vacant homes in Meridian are short sales/REO’s or sellers with equity who have moved on for various reasons ~ job transfer, divorce, relocation, etc.
By Eva M. on Aug 25, 2010
Phil,
Interesting analysis, what convinces you that the bottom is close? I spent the last year in Las Vegas and, while there are MAJOR obvious differences between Vegas and Boise, all the agents there were sure prices weren’t going lower and yet they did.
I am not yet a Boise transplant and have been sitting on the sidelines renting for the last three years in various locales to see what the rest of America looks like, but when I became interested in Boise in early 2007, I could see how overheated the Boise market was.
At what median price point do you think the Boise market will find continuing and sustained support? I am inclined to think it is somewhere in the $100-115K range myself.
Great blog!
By Phil Hoover on Aug 25, 2010
My comments were based upon the leveling off of year-over-year price declines.
Recent news (in the past couple of days) detailing severe drops in sales nationwide of both resale and new homes are cause for concern when combined with the ongoing national economic challenges, unemployment numbers, etc.
No one knows where we go from here, but I would be surprised to see a $110-115k median price in the Boise market.
That said, I think we can expect further price declines.
By Eva M. on Aug 25, 2010
I follow Housing Tracker weekly online (http://www.housingtracker.net) and I can see where the current median asking price in Boise is around $155K right now and has been dropping fairly steadily every since the bust started.
I think we are in uncharted waters throughout the U.S. right now and I am more than a bit concerned about whether the U.S. will have to contend with double digit unemployment for a decade at least, given our lack of manufacturing base at present.
I expect to purchase in the next couple of years, but I can see at least another 10% drop out of Boise over the next year, followed by another 7-8% in 2012 and then small drops of almost flatline for the next 5 or 6 years after that.
Should be an interesting ride!