Rising Boise home values give credit to talk of a new housing boom in the near future!
The rapid rise in Boise home values over the past few months supports Chris Isidore's recent article in CNN Money about a new housing boom that could be in the nation's near future. In fact, the article suggests that recent forecasting puts home values back to peak levels as early as 2015. Based on the increase I've seen in Boise home values within the past few months, I would agree with these statistics.
Here are 3 reasons why I think Boise home values will continue to rise and give way to another housing boom in our area:
- A flood of buyers are about to enter the market: When Boise home values crashed, several people lost their homes to foreclosure. Others avoided foreclosure, but had to wade through the short sale process to get out from under their mortgage. A past foreclosure usually disqualifies people from obtaining a home loan for a minimum of three years. For those who go the short sale route, that time period is reduced to a minimum of two years. In 2010, 515 short sale properties were sold and 1052 foreclosures, these distressed sales comprised 41% of the sales that year. In 2011, there were 671 short sales and 1052 foreclosures, totaling 44% of the sales for the year. Since those sales took place, the owners of those homes have likely been renting, waiting until they can once again obtain financing and pursue home ownership. For many of those people, their waiting period is coming to an end and the years 2013 and 2014 will mark a large number of buyers reentering the market.
- Inventory remains low and likely won't be able to keep up with demand: Inventory of Boise homes was down below 900 properties in May and June of this year. Although it has risen slightly in the past couple of months, it remains about 25% below last year's numbers. Although Boise home values are increasing, many people remain underwater on their mortgages and will have to wait until prices jump even higher before they are able to sell. Other owners who could sell now are sitting on the fence, motivated by those higher prices that market indicators say are just around the corner. In short, the current lack of urgency or ability to sell will perpetuate the low inventory problem until buyer demand drives up Boise home values enough to encourage or enable people to sell. I can practically see the bubble inflating as I write!
- Boise continues to be a hot market for out of state investors and an attractive city for relocation: One of the contributors to the last boom in Boise home values was the amount of out of state buyers bringing money to the Boise area. To these buyers, Boise home values were relatively low in comparison to other cities The willingness and ability of these buyers to pay top dollar for Boise properties definitely played a part in rapid price inflation. As Boise's growing reputation of being a great city to live, work, and play entices people to relocate to the area and as Boise home values continue to make our market a hot commodity for out of state investment, the demand for homes in Boise will continue to expand, pushing prices up until inventory can keep up with demand.
So, what do rising Boise home values and a possible future housing boom mean for you?
Well, if you are thinking about buying, get off the fence and buy! Evidence shows that Boise home values are only going up from here. Get in while prices are still relatively down. Beat the rush to the market and take advantage of those record low interest rates! If you are thinking about selling, there are a few factors to consider. You will likely get a higher price for your home if you wait to sell. However, if you are selling to upsize, remember that the prices on the properties you will be looking to buy will also be higher if you wait. Thus, now may still be the time to make your move. You may not get as much out of the sale of your current home, but as Boise home values rise, you stand to realize a greater gain in your new, higher-valued property. If possible, you may also want to consider buying now why prices are still relatively low and renting out your current home. After a year or two, when Boise home values have increased, sell the rental and take advantage of the higher prices.
If you'd like to discuss more about your specific situation and how rising Boise home values may effect your next real estate move, give me a call at 208-861-5639 or send me an email. I would love the opportunity to sit down with you and talk more about the real estate decisions that might be best for you and your family.