Home Buying in Boise>Question Details

Kimberly, Home Buyer in Boise, ID

Marketwise, what's happening in Boise right now? Do you see prices going down further and holding or jumping?

Asked by Kimberly, Boise, ID Sun Feb 10, 2008

Would you rent for a while or would you buy NOW?

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Kimberly,
Keep your eye on the inventory levels as one of the main factors that will effect the market in Boise.

As previously mentioned, the new construction inventory has been decreasing and developers aren't interested in losing any more money, so you'll see fewer and fewer new home starts, especially this winter.

But, as the new construction inventory dries up, it's going to force more activity towards the existing home market which will also help eat up some inventory there. Once inventory levels drop below a certain threshold, say, a 5 month supply, you'll start to see prices in certain areas stabilizing and perhaps going up in value.

Don't expect to see any enormous jumps in value but get ready for higher values and more importantly, more sales in the next year.

Also, we have seen an increae in buyer activity in all price ranges. The buyer confidence seems to be holding a big stake in the situation, but with that pent up demand and decreasing inventory you will see a better market soon. I wouldn't use the word jump though.

I have some great visual charts at my site for the Boise area, check them out!!! http://boiserealestatesoup.com/2008/11/17/boise-real-estate-…
0 votes Thank Flag Link Mon Nov 17, 2008
Hi Kimberly,

I wish I had a crystal Ball so I could answer your question. The fact is, nobody knows right now. But, prices are very, very good and here is how I know they cannot change to the lower for very much longer. The prices we are at right now are unsustainable when looking at new construction. If you just look at lot prices, you can start to see that we are at a point where it no longer makes sense to be a developer. A typical R4 lot (four lots in 1 acre so quarter acre lots) cost about $30,000 just to build (utilities, streets, sewer, etc). Now if the developer was to get an amazing deal and buy the land at $20,000 an acre that lot would now cost him $35,000 with no profit. R4 Lots in some areas are selling for less than this now.

The reality is that some developers in Eagle paid over $160,000 per Acre! So, for a majority of developers, current lot prices are either a break even or a loss situation. Then, the same thing is happening to the builders. What it costs them in labor and materials is a set cost. Problem is, the market is saying the homes are worth 5,10,15K less than what it cost to build the home. That is a function of the costs of lots dramatically reducing over the past 2 quarters (remember a home completed today was built on a lot bought about 6 months ago).

So, what I see happening right now is unsustainable in my mind. If the developer, the Builder, and the Realtors all can't make money because the prices have gone below costs, then they all stop - and we are seeing that. Building permits and applications for new subdivisions are WAY down - way past our historical averages. So, we must be at or near some sort of bottom because the law of supply and demand will eventually kick in. If there is no more re-supply, then demand will outpace availability at some point sooner rather than latter.

Ultimately we need to get back to looking at a home purchase as a long-term investment...not a 2 year turn and burn. If you were to buy a home today and plan on staying at least 5 years, I would be confident in telling you the home will be worth more in 5 years.

If you have any questions or would like to discuss this further, please feel free to contact me!
Web Reference: http://www.43re.com
0 votes Thank Flag Link Mon Nov 17, 2008
Hi, Kimberly ~ I quess you could read all the Real Estate Blogs, Read the local or national papers, watch Fox News, Local TV news, etc. but the best quideline is "feet on the street". The people that treat Real Estate as a real job, work the neccessary 8 to 10 hours days and actually perform and produce for both buyers and sellers. So lets see intuitively (gut feeling), the market is a bit all over the map. The "cheap" subdivision homes i.e. Corey Barton, Hubble Homes are saturated with blow out sales every weekend and have poor resale value. The Northend and Bench vintage homes are selling if the sellers are reasonable about their prices and realize we are not back in 2005-2006. Homes with acreage in Eagle are slow, in Emmett they will move because of better pricing. There are short sales that are available by overextended builders and subprime loans customers, but you have to be prepared for long waits for lender approvals on an offer. So I quess there is no real straight answer. Though our market is holding its own compared to other areas in the country and I feel will continue to do so. If you would like to give me your specific scenario I could tailor a more direct answer. Thank you I look forward to hearing from you. Sherry Tarrant P.S. I rely heavily on spell check so excuse any misspells or bad grammer :)
0 votes Thank Flag Link Tue Feb 12, 2008
IT depends... what sort of property are we talking about? Let me suggest you dig in a bit at my blog that addresses this very issue. http://www.wiebere.com/content/view/44/8/

This is part one of assessing the current market conditions and addresses the "depends" issue head on.
0 votes Thank Flag Link Mon Feb 11, 2008
I agree completely with Alfie on every point she made. I too believe in "In God we Trust, All Others Bring Data". The one thing I would add is that it depends on the area of Boise, type of home you want (new/resale) and what price range. For first time home buyers, this is a great time to buy. Certain areas have new starter homes for under $150,000 and the Bench could not fall much lower. The numbers have shown that high end home prices continue to fall. The key is to look for the deals in todays market and wait for the home that is perfect for you. Focus on the resale value (location, size, etc.) and not necessarily on the lowest price. A 2 bed/1 bath may be a nice starter home for you, but it will not have the same resale value of a 3 bed/1.5 bath. The answer to housing woes will be decided by the lenders. Once they start freeing up more lending more Buyers will be able to get back in the market. If you are considering buying you should meet with a lender and check what types of lending you will qualify for. If you have credit problems you will have time to fix them and get yourself a good interest rate and loan program.
0 votes Thank Flag Link Mon Feb 11, 2008
Personally, I've seen a lot of activity on our listings during the past few weeks. Of course, ANY activity is better than what we saw the last half of 07. To me, that says that a lot of buyers are thinking it is the right time to start looking (and possibly buy). As far as prices, we may still see them dropping, but if you plan to buy and live in a home for at least 5-7 years, I don't think you'll see much of a difference between buying now and buying, say, in the fall. I still can't tell if the past few weeks are the beginning of a trend or just a fluke, so I won't be making any grand predictions that the market is at the bottom. At least, not without a little more data.
Web Reference: http://www.cityburb.com
0 votes Thank Flag Link Sun Feb 10, 2008
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