The Coming Boise Housing Shortage
I posted this months ago. Well it is here! Especially if you are looking for homes less thatn $150K. Yesterday, July 27, 2012 one of my buyers made an offer on a home listed for $89,000. There were multiple offers. It was a Bank owed home. The winning offer was for $111,000. My buyer had offered $10,000 over asking price. From prior experience with this home I knew that there would be multiple offers. I knew that it would go for well over the asking price. But this was over $20,000 higher. Now I wonder if an appraisal would have been that high. But the buyer was an all cash buyer. Don’t get frustrated. Call us and let us help you.
The coming Boise housing shortage? If you have been trying to sell a home you might really wonder about that statement. But it is bound to happen. Real Estate is cyclical. The worst busts always come after the highest booms. It happens in the stock and bond markets and real estate too.
From 2003 to 2006 home building and increases in prices in the Boise area went nuts! Everyone was buying. Anyone could get a loan and prices were rising so fast people thought they had to buy now or they would never be able to afford it. Because of that literally Pizza delivery people became builders. Because of easy or no contractor license requirements it was easy. Because builders, Realtors, and lenders didn’t understand economic cycles they all jumped in. Realtors and lenders were not only selling anyone and everyone “investment property” and flipper homes, they were doing it themselves.
An “investor” would get hooked up through their Realtor to a builder and a banker. They would take out a construction loan to pay the builder. They would buy the unbuilt home from the builder for say, $170,000 to be paid from the construction loan as it was being built. The Realtor would list the property for $230,000 and someone would buy it before it was built. Then they did two! Multiply that and there were hundreds of homes being built that soon people would not be able to afford. Then came the bust.
Well pendulums swing. Now, even though the economy is still bad, prices have dropped in some cases to less than half of 2005 through 2007 levels. Banks are offering foreclosed property for stunning prices and we bring buyers in some and they are getting 10 offers in a week!
I was at a real estate auction last week, bided on a house and the winner paid $30,000 more than I would have.
There are still a lot of homes for sale. But in July 2011 there are fewer than there have been in years. There are a very few new homes being built and very few speculation homes. Are we at the bottom? I wouldn’t dare guess the day, or month, but mark my words. There is going to be a day when there are too few homes. Some big employer will move back to Idaho and gradually the next acceleration in prices will happen. Then it will get faster. Then there will be more building. And when most people start buying again home prices will be rising and the cycle will start again. Read this article that I found today. Then come back, set up an account and an automatic search alert and keep your eye on what is happening. http://articles.moneycentral.msn.com/Banking/HomebuyingGuide/believe-it-or-not-a-housing-shortage.aspx If you are thinking of buying a home to live in a year or two, I would say keep renting. But if you are going to live in a house for 5 to 10 years or more, I would start looking. Let us help you!
Jon Gosche 208-870-2115.