The Boise Idaho genuine estate market update for four-16-08

Article by Gavin King

The Boise Real estate market is still clicking along in certain facets. The higher and lower rungs of the market ladder are still the most predictable. Starter homes in Boise real estate are still the fastest moving price group with most “days on market” statistics staying under the 60 day mark. In Kuna during the slowest quarter of the slowest real estate market in a decade or so, there was a 50% absorption rate of total inventory in the starter home price and size range, which indicates a very active market. Despite this fact, many developers are still having a hard time getting financing, even for starter home projects.

It all seems pretty confusing, just like many other markets, but the Boise real estate market isn’t falling apart like the media tends to indicate. An important and fairly reliable indicator of this is the fact that several local developers have shifted their target markets in project they are investing in, removing their money from higher end projects and putting it into starter home projects that have higher density and faster lot turnover. Even now, homes that are priced below the median price value tend to sell faster than homes in the higher price ranges, no surprise there!

Even though lenders have raised the guidelines on borrowers, a measure that will not aid any recovery, the starter home niche has continually moved along. This is because the median income for average Boise real estate market patrons remains below the 50k dollar threshold and prevents many local buyers from acquiring homes that are more expensive. The key word to builders hoping to stay alive in this slow market is “cost prohibitive”. It is cost prohibitive to spec too large of homes and hope that a buyer will come along and like what you have built, in this economy.

Most builders, developers, and real estate agents will benefit by this now arriving, in not, long awaited trend in building smaller homes on smaller lots. The benefit will be manifest in that the market will be more stable, the home sales will be more frequent and home prices will appreciate SLOWLY, and not hyper-inflate due to increased demand and limited supply.

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