Funds Blog

The State Of The Boise Idaho Real Estate Market

As with almost all of the country, Boise real estate has suffered an amazing drop in activity and prices in recent years. The national real estate scene has been forecast to turn around as late as last spring, but continued troubles beset it and we are still waiting to see it improve dramatically. There is some good news on the horizon and it is reflected in the market numbers for area.

The most active strata in the Boise Idaho real estate market is the entry level home market. Home sales are higher than previous years and even months, after factoring in the typical winter lull. Buoyed by the introduction of the first time home buyer tax credit, many home owners were granted clemency is trying to sell their home without facing a loss. These tax breaks aimed at increasing home buyers rates of purchase were responsible for the latest rate of appreciation throughout the nation.

The next strata of home prices is the tier 2 homes which are between about two hundred and four hundred thousand dollars, and they do seem to be selling at very slow rates right now. Banks grant loans at much higher rates when they can obtain primary mortgage insurance, so now that appreciation is returning, PMI availability will speed up sales. The construction and purchase of new homes in this price range is slow with buyers tending to go after the more energy efficient homes to save money.

The jumbo loan market is reporting higher than expected defaults, so luxury housing in the Boise Idaho real estate market is not doing so great either. This increase in default or foreclosure will cause primary mortgage insurance rates to go up and begin to exclude many buyers consequently.

Land in the Boise Idaho real estate market, which includes developments, acreages and building lots, has been experiencing short increase in pace with more buyers procuring reo homes with land. It is no coincidence that building lot sales and new home sales are both low, because they have a definite correlation and a close dependency on each other. With a paucity of financing for real estate developments, the rate of sales of development property has been very slow.

Each cold season brings a big slow down to the real estate activity, but this winter I think many buyers will be out trying to wrap things up before the April cutoff for the federal tax incentives. Past that we may see a slow down over the course of this summer, especially if rates rise and markets do not improve.