Boise Home Prices Down But Supply is Bottoming Out!
The Boise Real Estate Market see more price declines, but surprising drops in available inventory give new hope and stimulus to the local housing market.
The BLUE line represents Ada County Median Sale Prices Since 2006. You see an overall decline in that time with a couple of up surges in 2010, but nothing that stuck.
Next look at the RED line, this is the Inventory (Supply) of homes on the market. The Supply of homes has been dropping since Summer 2008. Economics 101 says if the supply drops, then look for prices to increase. However, in the Boise area real estate market, that has not happened.
The main reason prices have fallen at the same time inventory is declining is the big bad wolf (foreclosures). The Boise Metro area has been pummeled by foreclosures, and ranks nationally as one of the worst hit areas in the United States.
Over 50% of the homes sold on the market are currently Foreclosures or Pre-Foreclosures (Short Sales), otherwise known as Distressed Sales. This might sound alarming or bad to you. I think it is alarming for sure, but it doesn’t necessarily mean it is bad.
There is still a fair amount of active buyers in this market, which is why we see falling inventory levels. Buyers are swooping in and purchasing the great deals that are on the market. The fact that people are buying mostly distressed sales is actually a good thing for the overall health of this Boise Market.
We must purchase up all of these foreclosures on the market before the housing market can recover. In Boise, buyers have done a great job buying up the available distressed sale properties.
At some point we will hit a TIPPING POINT, where there are more buyers (Demand) than there are available Foreclosure deals. At that point there will be a feeding frenzy for the remaining foreclosures. Banks will not have to list the homes low to sell the properties, and it will mark the beginning of the Boise real estate market recovery.
The crazy thing is that it might have already happened. Take a look at the last inventory numbers for December 2010, the RED LINE. It just dropped off a cliff. It is not a typo. For some reason we just hit a crazy low shortage of homes. This is a really good sign for Boise. I have been preaching about our low inventory levels for a while, and it just got a lot better.
It is possible that we have reached a tipping point. One thing is for sure; nothing is predictable in a market like this. But we aim to keep you informed each month with the changes we are seeing.
Have questions about Boise Real Estate? Call the local experts, Mike or Jared at 208 740-5000.
