Boise Real Estate Blog

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.
 

Here’s an interesting year-over-year comparison of year-to-date new home construction for Canyon County.

2012

• # Closed Sales: 260
• Average Selling Price: $150,094
• Median Selling Price: $138,470

2013

• # Closed Sales: 375
  Change: +44.2%

• Average Selling Price: $177,303
  Change: +18.1%

• Median Selling Price: $166,550
  Change: +20.3%

Data pertains to Canyon County new homes on lot or acreage. Data does not include condo or townhome properties.
New = To Be Built, Under Construction, and New-Never Occupied age categories.
 

Here’s an interesting year-over-year comparison of year-to-date new home construction for Ada County.

2012

• # Closed Sales: 1,126
• Average Selling Price: $242,302
• Median Selling Price: $217,284

2013

• # Closed Sales: 1,341
  Change: +19.1%

• Average Selling Price: $277,380
  Change: +14.5%

• Median Selling Price: $260,000
  Change: +19.7%

Data pertains to Ada County new homes on lot or acreage. Data does not include condo or town home properties.

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