Sale prices continued to shrink in 2010, but cheaper houses could help clear the inventory of unsold homes.
(Idaho Statesman) Ada County’s median home sale price fell to 2003 levels last year, and Canyon’s median price fell to levels not seen since at least 1997. But more buyers decided to take advantage of those lower prices, according to year-end real estate reports.
In the Treasure Valley, 8,819 homes received offers last year, a 12 percent increase over 2009 but still far below the mid-decade house-buying frenzy.
Median sale prices were down 7.1 percent in Ada County and 17 percent in Canyon County. Idaho was the only state in the nation where home prices fell by double digits for the 12 months ending in September, according to the latest analysis by CoreLogic, a Santa Ana, Calif., company that tracks housing data.
The good news? The housing glut continues to shrink. In Ada County, for example, homes on the market fell from about 2,900 to fewer than 2,000 from July to December, a trend that could produce a “modest” uptick in home values, said Mike Pennington.
“If demand stays strong, then home values will start creeping up again, because you’ll have people competing over these homes,” Pennington said.
Falling land prices were at least one factor that encouraged builders in Boise, Eagle, Nampa, Kuna and Star to request more single-family home permits in 2010 than in 2009. Some builders also rushed to get permits before stiffer 2011 energy-efficiency requirements took effect, and an $8,000 federal tax credit designed to jump-start the U.S. housing market encouraged sales earlier in the year.
Meridian, Kuna and Caldwell all finished the year below their 2009 numbers. And even the growth in places like Eagle and Boise is too small to declare that the housing market is turning upward, said Shaun Tracy, who tracks local building activity.
Eagle, for example, authorized 103 single-family permits in 2010 — 194 percent more than the previous year. But that’s less than 1 percent growth in a community of 20,000, Tracy noted.
That might explain why Eagle Public Works Director Michael Echeita is playing it safe and officially forecasting just 20 residential permits in 2011, same as he did in 2009 and 2010. “That way, if the market crashes again we’ll be OK,” Echeita said. “Most builders believe we’ve hit bottom. But they still think it could take years before we can feel comfortable.”
MERIDIAN
Meridian, once one of the hottest real estate markets in the country, issued 509 permits in 2010. That’s 19 percent fewer than the previous year.
Don Hubble, owner of Hubble Homes, said the decrease came despite the fact that land prices in Meridian have fallen from about $160,000 an acre at their peak to about $20,000 today. Cheap land didn’t benefit Hubble in 2010, either; his company’s sales were down 30 percent, he said.
In Nampa, where the number of permits was up 66 percent last year, building official Dennis Davis said the spike was partially attributable to prices for bare land that have fallen from $20,000 during the boom to about $5,000 an acre.
“Those kind of prices will get people off the fence who want to build the house of their dreams,” he said.
Hubble said one reason for an increase in permits in some cities was that builders wanted to get requests authorized before new International Building Code requirements mandating insulation in ceilings and higher glass standards took effect this year.
DISTRESSED SALES WEIGH DOWN MARKET
Even at bargain prices, agents say, Meridian builders are reluctant to put up a home in a community “awash” in distressed properties selling at bargain prices.
Of 736 active Meridian home listings on the Intermountain Multiple Listing Service earlier this week, 242 were short sales and 66 were bank-owned properties. Builders of new homes can’t compete with those properties on price, Tracy said.
Some agents worry that the weight of foreclosures and short sales is keeping prices depressed.
According to IMLS statistics, of 6,906 single-family homes listed on the industry group’s website this week, 1,655 were short sales and 865 were bank repossessions.
Pennington said a recovery in housing also could be affected by a “shadow inventory” of repossessed homes currently held by banks but not yet placed on the market.
True that.
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