Buying a home in Idaho is still pretty cheap

Idaho home prices may have climbed over the last decade or so (leaving some natives clutching their hearts with sticker shock), but homes here look pretty darn affordable to a lot of outsiders.

A national real estate company has done a study of home prices around the U.S., looking at 2,200-square-foot houses with four bedrooms and two-and-a-half bathrooms in 310 markets. Last week it released its most recent rankings.

The most affordable market was Grayling, Mich., where the average price of such a home was $112,675. In the most expensive market, La Jolla, Calif., a comparable home cost an average of $2,125,000.

The two Idaho markets included in the report were much closer to the low end than they were to the high end. In Boise, the report found, that average home costs $214,446. In Coeur d’Alene, it costs $203,542.

The national average across these 310 markets was $363,401.

But the Idaho markets aren’t on the cusp of being included in the list of the top ten most affordable markets. Coldwell Banker says there are 84 U.S. markets (27 percent of the markets researched) in which the sample home price averaged under $200,000.

*provided by IBR

Idaho’s Canyon County’s median below $100,000

I want to share a recent post from IBR.   Falling values=great buys.  Now is the time to take advantage of low prices, the move-up or first time buyer credit, and a great selection.  Why not move-up and take advantae of the $6,500 current homeowners (which have been in the home for at least 5 years)?  Why not buy your first home–at the best time in decades and receive 8K in spending money?  Give me a call . . . 869-3469   –Matt

For the first time since 2004, when home prices began their rapid ascent, the median price of an existing home in Canyon County is below $100,000.

Two hundred fifty-three existing (not new construction) homes sold in November, half for more than $98,900 and half for less than $98,900, according to recent numbers from the Intermountain Multiple Listing Service.

That price is down 1.1 percent from October and down 20.8 percent from November 2008. The median existing home price peaked in 2006 at $155,000.

Still, home foreclosures have been a growing problem for the county.

According to RealtyTrac.com, Canyon County hosts more than its fair share of Idaho’s distressed properties. Twenty-eight percent of Idaho’s foreclosure filings in November were in Canyon County, while the number of Canyon County households makes up only a tenth of Idaho’s total (based on numbers from the 2000 census).

The county has been seeing close to 300 new foreclosures per month since the beginning of 2009, according to IdahoDataProviders.com.

Earlier this month, the Idaho Housing and Finance Association announced a program to help out two housing markets in Idaho: Twin Falls County and Caldwell, Canyon County’s seat.

IHFA Grant Program Manager Janet Lovell-Smith said both of these areas had extra funds from a previous neighborhood stabilization project, so the IHFA turned that money around and put it into a new loan program, which gives certain buyers of foreclosed homes up to $40,000 in a zero percent due-on-sale loan.

The areas weren’t selected because of need, but Lovell-Smith said Canyon County has one of the most troubled housing markets in the state.

“Canyon County has always basically lead the pack in terms of foreclosure starts,” she said.

When the IHFA put together the neighborhood stabilization program with funds from the Housing and Economic Recovery Act of 2008, Canyon was the highest needs area, followed by Ada County. And the need has become even more heavily concentrated in the area; IHFA has applied for more federal money, most of it to go to Canyon County.

Idaho’s population growth drops to 12th nationally

Below is a recent post which was worthwhile sharing:

With the release of the final population estimates for the year, Idaho’s population growth slowed considerably between July 2008 and July 2009, but the state still ranks as the 12th fastest growing state in the nation.  

The state Department of Labor reported that the U.S. Census Bureau estimated the state’s population grew by 1.2 percent between mid-2008 and mid-2009, the slowest growth rate for Idaho since 2002 following the last national recession. Wyoming ranked first in growth rate at 2.1 percent while Texas gained 478,000 people, more than any other state.

Nationally, the U.S. population grew 0.9 percent, the same rate as the year before. These figures were released Dec. 24.

Just over 18,000 more people lived in Idaho in mid 2009 than the year before, increasing the state’s total population to 1,545,801. The Census Bureau revised its 2008 estimate upward by 3,600.

A dramatic decline in the number of people moving into Idaho contributed to the state’s population slowdown. In-migration fell to 3,700 from mid-2008 to mid-2009. Last year, in-migration was 14,000, the first time under 20,000 in four years.

Natural population growth – births less deaths – increased slightly to 14,300.

The economic slowdown that has cost Idaho 47,500 jobs during this same time frame also slowed Idaho’s rate from 18th in total migration last year to 34th this year.

Idaho remains as the 39th most populated state, about 250,000 behind Nebraska and 221,000 ahead of New Hampshire. California was again the most populated state at just under 37 million, a 1 percent growth rate.

Since the 2000 Census, Idaho’s population has increased by 19.5 percent – nearly 252,000 people – the fifth fastest rate nationally behind Nevada, Arizona, Utah and Georgia. About 116,000 of that increase came from natural growth and the rest from in-migration.

 

*Idaho Business Review Staff

Realtors reimburse homebuyers for IHFA loan interest

Idaho members of the National Association of Realtors are handing out checks to homebuyers who have paid off their IHFA loans advancing the money anticipated from the $8,000 federal tax credit.

The checks from the Realtors are enough to cover the fees and interest associated with the Idaho Housing and Financing advances.

With the federal tax credit only available after a home has been purchased (and it’s taking longer than many homebuyers expect for the money to arrive), the IHFA loan allows buyers to use money from the anticipated tax credit as part of the down payment and closing costs.

A press release from the Ada County Association of Realtors explains that the Realtors wanted to make sure the loan was not out of reach for families.

“Idaho Realtors encourage homeownership opportunities for all Idahoans who want to own their home, but don’t know how or don’t have access to the funds for a down payment,” the statement reads. “By addressing this issue we can stabilize neighborhoods, attract and retain qualified workers, and provide a long-term sustainable community benefit.”

There have so far been 76 homebuyers around the state who have received their federal refund check and paid off the advance loan, according to the Ada County Association of Realtors.

Funds come from the National Association of Realtors and the Intermountain Multiple Listing Service.

What a shame . . . Eagle’s Legacy Development Headed for Auction

Over 200 lots in the Eagle development noted for its ties to sports stars Mia Hamm, Jack Nicklaus and others are scheduled for auction Dec. 21.

Legacy started building homes in 2008 with plans to develop the first 240 lots in the first phase. Developers planned to have around 1,300 homes on 600 acres eventually.

Ron Jantzen, trustee manager for Pioneer Lender Trustee Services LLC, said the sale is still nebulous at this point. He said it’s scheduled for Dec. 21, but he hasn’t received instructions on the sale and he doesn’t know if it will be postponed or not. The auction was originally scheduled for Dec. 9, but was postponed once already by the lender.

Jantzen said the Legacy process echoes typical auction progression. “A lot of times they’re working out 11th hour deals,” he said.

Legacy’s developer, Eagle-based Idaho Development Services, couldn’t be reached for comment, but in March partner Todd Santiago told the IBR that sales weren’t meeting expectations.

“We definitely planned for peaks and valleys in the housing market, but this just happened to be a deeper valley than I think anyone nationally had predicted or forecasted,” he said. “This particular valley and downturn are obviously longer and more significant that what some of the historical valleys have been in the real estate cycles.”

Santiago said competition from short sales and foreclosures had contributed to slower sales. In March, 26 units (including townhomes) had been built.

 

**originally posted by Dani Gregg w/IBR

Commercial Construction Uncertain for 2010

The end-of-year totals for construction employment aren’t in yet, but not many would say 2009 was a good year for the construction industry.

The number of people employed in the Idaho construction industry was 33,300 in October 2009, the most recent data available. That’s down 36.5 percent from October 2007, when 52,500 Idahoans had jobs in construction, according to the Idaho Department of Labor.

Nationwide, about one in five construction workers is without a job.

So the hope is that 2010 will bring an end to the drop-off in construction projects and jobs. But industry experts aren’t seeing signs of that turnaround.

“There’s no telling what’s going to happen as far as the number of jobs,” said Bob Fick, spokesman for the labor department. “A lot of it could depend on the whole business about the commercial end of the construction bubble bursting; if that occurs, that would have an impact.”

Fick said the department’s projection is that construction employment levels will not be back at pre-recession levels until after 2025. Growth in the industry will be fueled by population growth.

For now, Idaho is in the same boat as the rest of the country, waiting for growth to catch up to the last construction boom.

At a Boise meeting of the Urban Land Institute, a group for those in the development industry, ULI’s Vice President Dean Schwanke offered some advice for 2010: “Don’t develop anything,” he said. “You’ll be better off than if you do.”

In an interview, Torry McAlvain, president of Boise-based McAlvain Group of Companies, said he agreed with Schwanke’s assessment. The demand just isn’t there.

He said he thinks 2010 will be the worst year in the 30-year history of his construction company, with staff layoffs possible if things don’t pick up.

McAlvain just finished up a two-and-a-half year project building the underground wings of the Idaho State Capitol, which he called a fantastic project.

“You hate to see a project like that end,” he said. “In our industry, we’re always looking for projects that are multiyear-type projects. Those are good for our industry.”

He said a lot of the contracts out there now are for three- to eight-month projects.

McAlvain also scored a $15 million contract in early 2009 to construct the Orchard Interchange on Interstate 84, funded by Grant Anticipation Revenue Vehicle, or GARVEE, bonds. New contracts like that will be fewer and farther in between in 2010.

Tom Cole of the Idaho Transportation Department said next year will be a good year for highway contractors when you consider the projects already awarded and under way, but there won’t be many big new projects put out for bid in 2010.

There will, however, be a number of smaller jobs, like pavement rehabilitation and bridgework around the state.

“I wouldn’t say next year’s going to be a bad year,” Cole said. “The following year’s going to be very questionable because of lack of funding for big improvement-type projects.”

He said even if funding comes through, either from an additional federal stimulus or from new state money, big contracts won’t immediately become available.

“One of the problems is that a lot of jobs take a fair amount of time to get the design done,” he said. “You’ve got to do the environmental documentation, you’ve got to buy the right-of-way, and that takes quite a bit of time, so if we didn’t have those projects ready to go, the jobs we’d be looking at would be bridges, pavement restoration, things like that – not adding capacity, not new interchanges. We have very few of those left because we haven’t had the funds available to do them, so we don’t have the design ready to go.”

The state’s transportation board is planning to ask the state legislature for additional GARVEE funding in the upcoming legislative session. The board approved a $45 million request in October, but that amount has decreased in response to savings on other GARVEE projects and changing cost estimates. Cole said anyone’s guess is a good guess as to whether or not the legislature will agree to the transportation board’s recommendation.

Kate McCaslin, CEO and president of the Inland Pacific chapter of the trade group Associated Builders and Contractors, said another federal stimulus is unlikely given the national deficit.

For now, about a third of the first stimulus package’s funds have been spent. But the money will eventually be gone, leaving a gap in construction financing that will be difficult to fill given the state of construction financing.

“The credit markets are frozen, and until the credit markets fall and banks start lending again, this country is going to be in deep, deep trouble,” she said.

She said the regulation pendulum has swung, and regulators are now telling lenders they don’t want to see any construction or real estate loans on the books, even for good projects.

Meridian-based ESI’s Vice President Neil Nelson said his company has enough of a retail, government and industrial backlog that he’s not too worried about 2010. Most of ESI’s work next year will be out of state.

Nelson said the biggest risk in the near future is subcontractor bankruptcies and failure to pay suppliers. And while he is encouraged by his own company’s backlog, he knows commercial construction is not headed for a quick recovery next year.

“The industry in general is going to be tough,” he said. “Architectural and design billings are still declining or flat at best. There was a slight increase in October and November, but that slight increase doesn’t necessarily make a trend. And if they’re not designing, we’re not building.”

 

Brought to you be IBR

Boise makes list of top business-oriented cities

Boise was ranked ahead of Denver, Salt Lake City and Dallas-Ft. Worth as one of the top 10 best cities for business based on results, or by looking at how many companies actually are located in a particular metro region.

This latest listing, made by MarketWatch, an Internet arm of the Wall Street Journal, added more categories – and more cities – to its judging this year than in previous years.

The MarketWatch article says that the ranking doesn’t give a complete picture, though. For instance, having a company headquarters in a particular region – or a large number of firms in a city – doesn’t necessarily mean it’s prosperous.

MarketWatch looked at information such as employment data and population figures, and applied five metrics measures – including how many firms there are per capita – on the most recent Fortune 1000, Forbes Private Companies, S&P 500 and Russell 2000 lists. Additionally, the list attempted to gauge a city’s ability to weather recession – particularly through job losses from September 2008 to September 2009.

The results: #6. Boise, Idaho – 728 points: Another new entry to the top 10, Boise also takes advantage of our extended search; it’s the 85th largest metro area in the U.S.

According to MarketWatch, Boise scored well in virtually all metrics, and might have been closer to the top spot had it not been for the pace of its job losses during the past year.

 

*post brought to you by IBR

Economic Data Suggests Reasons for Optimism

I wanted to pass along a recent post from William Rutherford who is the founder and president of the Portland company Rutherford Investment Management, listed in Barron’s as one of the nation’s leading separate account managers. He is also the author of a critical appraisal of Alan Greenspan’s term as Fed chief, “Who Shot Goldilocks?”

As I have stated before, the economy won’t hit the bottom until housing prices stabilize. Recent reports show that single-family home prices in the U.S. posted a slight 0.2-percent increase in the third quarter. This was the first quarterly gain in two years. The biggest increases were in the West, despite California, Arizona and Nevada being some of the most troubled states.

Sales of new homes unexpectedly increased in October. Sales of new single-family homes increased 6.2 percent. Sales of existing homes increased 3.7 percent. All of these reports augur well for the economy.

Also, job losses in November slowed to 11,000, the fewest since this recession began, and the unemployment rate fell unexpectedly, indicating that the economy is in a healing process. Unemployment remains stubbornly high, at around 10 percent, although most believe the real level is much higher. Nevertheless, payroll data reflect a notable improvement in the jobs market. Some think that firings have been too aggressive and that firms will have to start hiring in the next few months. There is a long way to go, however; nearly 8 million people have lost their jobs since the start of the recession.

Average hourly earnings rose a penny in November and the average workweek expanded by 0.2 hours.

Another report showed U.S. factory orders rose for the sixth time in seven months in October, posting a larger-than-expected gain of 0.6 percent.

In the third quarter, the U.S. economy grew 2.8 percent, expanding for the first time in more than a year.

The economy still faces stiff headwinds, including higher taxes and more regulation. But perhaps the strongest is banks’ reluctance to lend. Banks have taken billions of dollars from the government, put the money in a lock box and thrown away the key. They are able to borrow from the government, essentially free, and lend money at higher rates, pocketing huge profits. Additionally, they are making billions of dollars from trading gains with the rising market. According to a Federal Reserve survey of senior loan officers, banks continue to tighten lending for loans of all types, credit cards, business and real estate – even to prime borrowers. Only six banks out of all those surveyed reported easing of loan standards. Small businesses and consumers are the hardest hit. Small business contributes significantly to the overall economy, and the consumer is 70 percent of GDP, but loan activity is at deep recession levels.

Bank loans outstanding peaked in October 2008 at $7.3 trillion. Now they stand at about $6.7 trillion, an 8-percent decline. The money supply fell by 25 percent in the Great Depression, and that is why the Fed is buying mortgages. The Fed does not want to see a further decline in the money supply because that would likely mean a depression. But as fast as the banks take in money, they lock it up. If the Fed were not proactive, the money supply would be falling by 1 percent per month.

Even as the banks fail to lend, they pay out billions of dollars in bonuses.

Democrats can take some consolation in the economic numbers. The ruling party was, and maybe still is, headed for an election disaster next fall if they economy does not improve; it cannot take much comfort in the division between Wall Street with its billion-dollar bonuses, and Main Street, where credit is unavailable and job prospects are dim.

For the time being, expect the Fed to be lenient with interest rates and monetary policy. Expect the government to take on huge amounts of debt as it seeks to stimulate the economy. Expect the dollar to remain weak as interest rates remain low and government spending remains high. Expect the politicians to worry a lot about reelection.

Another Perspective on the Market Turn-Around . . .

Dani Grigg with IBR wrote a blog which I wanted to pass along.  It discusses alternate perspectives which are interesting:

If you walk down any given street in the U.S., odds are that one in every four homes you pass is worth less than what the owner owes on his or her mortgage.

In Idaho it’s almost as bad, with one in five homes under water, according to data from First American Core Logic, a real estate information company based in California.

I don’t know the numbers for the whole state, but median home prices in Ada County have been falling pretty steadily since mid-2006. This autumn they were down 37 percent since the peak in July 2006.

It’s a dangerous situation for homeowners who have to sell.

And it’s a headache for real estate agents, who have to deal with the long process and scanty payback of getting a bank to accept an offer that is less than what the owner owes.

I talked to a real estate agent this week who thinks the market doesn’t have to be this way.

If the community’s homebuyers would agree to stop approaching home sales with an eye to hack the price down to a fraction of its original size (I know another agent who calls this “raping” the seller), values would stop falling. Nearby homes would be able to be listed at prices more in tune with what the owner owes and with what the house is worth, according to some.

And he said others have a role to play as well: sellers should try to keep homes off the market, appraisers should give a property credit for every dollar of its worth, banks should start prices higher, and brokers and agents should stop accepting low-ball offers.

He talked about a home in Meridian that was purchased for $300,000 a few years ago, but is now listed at $190,000. He said he knows the listing agent would accept an offer as low as $170,000.

If we want to see an end to the real estate carnage and short-sale fever, that’s got to stop, he said.

I can’t speak for sellers, appraisers, banks or agents, but I think I can speak for buyers. I’m one of them.

It’s short-sighted of me, but getting the market back on track is the least of my worries.

I am thinking about purchasing my first home in time to qualify for the $8,000 tax credit, but my price cap is low. If I can find a house in my price range that is in a safe neighborhood, I’m going to take it. If that house really shouldn’t be in my price range – I’m OK with that. I’m leaving it up to the banks and the sellers’ agents to look out for everyone else’s interests. That’s their job, not mine. My future children will grow up in a neighborhood where they are safe, and that’s my top priority.

I think most buyers have a similar perspective.

And I hope that doesn’t make us “rapists” – hopefully we can just be labeled as we see ourselves: Lucky.

Actively Working Homebuilders Fall 79% in Ada County

A good read from IBR:

Since 2005, the active Ada County homebuilding industry has shrunk to a fraction of its former size.

In 2005, 770 builders pulled permits to build new homes in Ada County. In 2009, just 160 have done the same – a 79 percent drop. And only 60 of those builders this year have built more than one home.

These numbers come from Construction Monitor.

BuildIdaho.com founder Trey Langford said just building a home or two in a year is not enough to make a company workable.

“I say you have to build at least four homes this year to be considered a viable company, and only 37 made that number,” he said.

The ones that are surviving are the ones with strong marketing strategies, Langford said.

“I think the market has bottomed out,” he said. “I think the people who are left are business savvy, they have business plans, they understand what the customers want and they’re marketing themselves to meet those people.”

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