Posted in Boise Market | Posted on 03-02-2015 | Written by Metrostudy News
- New Home Starts in the Boise market for 2014 are down 15% from 2013
- Lack of lot inventory in Ada County is holding back production for the region as a whole.
- We expect loosened lending requirements in 2015 that could provide a new surge of activity in the housing market
March 2015: Metrostudy’s 4Q14 survey of new home production in the Boise/Treasure Valley region shows that the market has experienced a steady decrease for the past 12 months, but appears to be stabilizing. There were 636 new home starts – both attached and detached – in 4Q14, down 10% from 4Q13, and down 21% from 3Q14. Annual new home starts for all of 2014 totaled 2,951, which is a 16% decrease compared to 2013, however is up 21% compared to 2012. New home closings totaled 679 during the fourth quarter, which is 14% below 4Q13, and down 28% from last quarter. Annual closings for 2014 decreased 11% from last year, but are up 37% over 2012.
Ada County started 451 new homes during 4Q14, which is down 12% compared to 4Q13, and another 20% from last quarter. Annual starts for 2014 decreased 17% compared to last year, for a total of 2,146. There were 470 new home closings during 4Q14, down 19% compared to last year, 32% from last quarter. Closings for 2014 were down 15% from last year to 2,176. Canyon County started 183 new homes during the fourth quarter, which is down 3% compared to 4Q13, and down 21% from last quarter [PLEASE REVIEW THAT NUMBER – down 216%??]. Closings during the fourth quarter increased 3% compared to last year, however decreased 10% from last quarter, for a total of 208. Annual new home starts for 2014 decreased 11% from 2013 to 783 and annual closings dropped 1%, for a total of 771.
“The decrease in new home production has primarily occurred in Ada County,” said Eric Allen, Director of Metrostudy’s Utah/Idaho region. “Part of this retraction is due to the lack of lot inventory. Rising home prices have also played a key role in the decrease, and as a result, many new homebuyers are being pushed into Canyon County, where they can find more homes available in the lower price ranges. Mortgage qualifications have been a challenge for the past few years; however Fannie Mae and Freddie Mac have indicated that lending requirements may be loosening throughout the year, which could provide a new surge in the housing market.”
Annual Starts by Price Range
Home price increases do appear to be slowing, which will also have a positive impact on the housing market. The median price for a new home in Ada County is $292,500, which is up 19% over last year and 3% above last quarter. The median price in Canyon County has increased 8% over last year to $182,300 and is 1% higher than last quarter.
As of December, there is a 5.6 month supply of new single family detached home inventory in the Boise/Treasure Valley market, which is up from 5.0 months recorded at this time last year, and is considered to be below equilibrium (6-9 months). Under construction inventory increased 7% over last year at this time, however decreased 2% from last quarter, which is to be expected. Finished vacant inventory is down 12% from last year and another 8% from last quarter. This represents a 2.0 month supply, which is unchanged from this time last year, and considered to be within equilibrium. There are currently 107 attached homes/units in inventory, which is a 9.7 month supply.
Inventory of vacant developed lots (VDL) in Ada County has increased for the past 3 quarters to 5,352. This is 17% above 4Q13 and up 8% from last quarter. Based on the current pace of absorption this is a 29.9 month supply, up from 21.1 months last year. There were 2,925 lots deliver to the county in 2014, which is 62% more that 2013. Vacant developed lot inventory in Canyon County is down 4% from last year to 3,740. Based on the current pace of absorption, this is a 57.3 month supply, which is up from 53.3 months at this time last year. There have been 611 new lots delivered over the past year, which is 58% more than 2013.
“With new home production scaling back, as we get closer to spring it will be imperative to monitor inventory levels of both finished vacant homes and vacant developed lots,” said Allen. “With a healthy economy, along with the expectations of loosening mortgage qualifications and slower price increases, the Boise/Treasure Valley market should experience a stable market throughout 2015.”
For information contact
Metrostudy is the leading provider of primary and secondary market information to the housing and related industries nationwide. Metrostudy provides research, data, analytics and consulting services to help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day. For more information, visit www.metrostudy.com
About Hanley Wood
Hanley Wood is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; high-profile executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.