Boise Real Estate Blog

There are a lot of Boise new homes listed in our Multiple Listing Service.

In fact, 777 (28.9%) of all 2,691 homes for sale in our MLS are new homes.

You might think all of those listings are completed new homes eagerly awaiting new owners, but that’s not true.

Many of those listings are “to be built” homes that will never be built unless buyers agree to have them built.

In fact, 354 (45.6%) of all 777 new homes listed for sale in our MLS now are “to be built”.

We call those “to be built” homes “build jobs”.

Builders like to sell build jobs because they know they have the home sold before they start building it vs. building a “spec home” (a home built on speculation that it will sell).

And, with a build job contract in hand, the builder can often get another construction loan and start building another home.

Data pertains to Ada County single-family homes on lot or acreage.

Data does not include condo or townhome properties.

New homes = To Be Built, Under Construction, and New-Never Occupied MLS categories.

 

Here’s an interesting comparison of Canyon County, Idaho new home sales for 2012 vs. 2013.
2012 Canyon County, Idaho New Home Sales

• # Sold: 3,010
• Average Sales Price: $114,040
• Median Sales Price: $96,163

2013 Canyon County, Idaho New Home Sales

• # Sold: 3,172
  % Change: +5.4%

• Average Sales Price: $141,834
  % Change: +24.4%

• Median Sales Price: $124,900
  % Change: +29.9%

Data pertains to Canyon County, Idaho new homes on lot or acreage.  Data does not include condo or townhome properties.
Date range = January 1 to December 21  of each year.
Age = To Be Built, Under Construction, and New-Never Occupied.
 

Here’s an interesting comparison of Boise new home sales for 2012 vs. 2013.

2012 Boise New Home Sales

• # Sold: 1,401
• Average Sales Price: $246,244
• Median Sales Price: $220,000

2013 Boise New Home Sales

• # Sold: 1,613
  % Change: +15.1%

• Average Sales Price: $280,266
  % Change: +13.8%

• Median Sales Price: $262,900
  % Change: +19.5%

Data pertains to Ada County new homes on lot or acreage.  Data does not include condo or townhome properties.
Date range = January 1^st to December 20^th of each year.
Age = To Be Built, Under Construction, and New-Never Occupied.
 

As of this morning, we have 2,251 homes available in MLS.
That sounds like a reasonable supply of listing inventory for this time of year until you drill deeper into the numbers.
Why?
Because many of those listings are for homes that don’t exist.
363 of those listings (16.1% of all listings) are “To Be Built”, meaning that they aren’t even under construction yet.
Builders purposely list homes they haven’t begun building, hoping to snag a buyer before starting construction.
That’s because it’s easier for a builder to get a construction loan if they’ve pre-sold a home.
Construction lenders are generally conservative about making construction loans for “spec homes” (homes built on speculation that the home will sell).
But, they’re much more receptive about making construction loans for pre-sold homes.
So, the bottom line is that we don’t really have 2,251 homes for sale now.
When you back out the phantom to-be-built listing inventory, we have just 1,888 homes available at this time.
That sounds like a lot of homes, but it isn’t when you allocate that listing inventory over all of Ada County and factor in a buyer’s criteria for price, square footage, bedrooms/baths, schools, commute distance, and numerous other factors.
Data pertains to Ada County single-family homes on lot or acreage.  Data does not include condo or townhome properties.
 

I’ve recently heard comments about how the Boise real estate market is headed for another “bubble” in new construction.
My friend, Trey Langford, over at BuildIdaho.com, is an expert on new construction activity and he says otherwise.
Trey recently posted a chart tracking issued building permits during the month of September from 2005 to the present and it tells an interesting story.
For example, in 2005, a stunning 642 building permits were issued during the month of September.
If that isn’t the beginning of a bubble, I don’t know what is!
In comparison, 162 building permits were issued in September of this year.
September 2010 was the lowest point, with only 91 building permits issued.
September 2011 was only slightly better, with 98 building permits issued.
Trey’s post goes on to say that issued permits have declined over the past couple of months, following robust activity earlier this year.
It’s also interesting to note that we had 770+ builders pulling permits in 2005 vs. about 240 now.
This data does not suggest that we’re headed into another bubble.
Instead, it suggests that we are  working toward a more normal new construction market.
Data pertains to Ada County issued permits during the month of September from 2005 to the present.