Posted in Boise Market | Posted on 11-06-2014 | Written by Metrostudy News
- New home production levels are still strong compared to historical averages
- The market is heavily favoring the higher price points, as Annual Starts over $300k are up 37% YoY
- Median New Home Prices Continue to Trend Upward: Ada County Median Price is $285k, up 20% YoY and Canyon County Median is $180k up 12% YoY
November 2014: Metrostudy’s 3Q14 survey of the Boise / Treasure Valley housing market shows that while we have experienced some slowing in the past few quarters, new home production remains relatively strong when compared to the historical average. According to the survey, there were 823 new homes (both attached & detached) started during 3Q14, down 19% compared to 3Q13, and another 1% from last quarter. New home closings totaled 950 during the quarter, a 1% decrease from last year at this time, however increased 28% from last quarter, signaling that demand for homes remains strong.
Annual new home starts have decreased 9% compared to last year’s pace for a total of 3,045 and annual closings are down 3% to 3,092. Ada County started 578 new homes during 3Q14, which is down 22% compared to 3Q13, and another -4% from last quarter. Annual starts decreased -12% from last year to 2,231. There were 700 new home closings during 3Q14, down only -.4% compared to last year, however up 28% from last quarter. Canyon County started 231 new homes during 3Q14, which is down 11% compared to last year, however up +6% from last quarter. Closings during the second quarter decreased 6% compared to last year, however increased +27% from last quarter, for a total of 233. Annual new home starts decreased -1% over the pace last year to 787 and annual closings are up +12%, for a total of 769.
“As in other parts of the region, the new home market is now heavily weighted towards the move-up buyer, leaving the entry-level buyer at a disadvantage, due to the rapid increase in prices and tightening lending environment,” said Eric Allen, Director of Metrostudy’s Utah/Idaho Region. “Annual starts above $300,000 have increased 37% over last year, while the pace has decreased 25% for homes under $300,000 compared to the same time. Demand for homes in the market remains strong, and low inventory levels have contributed to the rapid increase in prices. The median price for a new home in Ada County is $285,3000, up 20% over last year and 4% from last quarter. The median price in Canyon County has increased 12% over last year to $180,300 and up another 2% from last quarter.”
As of September, there is a 5.6 month supply of new single family detached homes in the Treasure Valley market, which is unchanged from last year, but down from 6.0 months last quarter. Inventory for homes under construction declined -11% compared to last year at this time, and -5% from last quarter. Currently this is a 3.2 month supply, down from 3.6 months in 3Q13. Finished vacant home inventory has increased +15% from 3Q13, however decreased -11% from last quarter. Due to the increased absorption (closings), the supply of finished vacant homes dropped from 2.4 months to 2.1 months currently. There is also a 10.1 month supply of attached home inventory on the ground. Under construction inventory calculates to a 5.8 month supply, with an additional 5.8 month supply of finished vacant homes/units on the ground.
Inventory of vacant developed lots (VDL), for both attached and detached homes in Ada County has increased +17% over last year and +7% from last quarter, and translates to a 26.6 month supply. Vacant developed lot inventory in Canyon County is down -10% from last year. Based on the current pace of absorption, this is a 56.0 month supply, which is down from 61.2 months recorded in 3Q13. There have been 3,050 new lots delivered over the past year, compared to 1,504 in 3Q13. Despite the spike in deliveries, “good” lots are being absorbed quickly, and need to be replaced.
“Metrostudy expects demand to remain relatively steady for the next year, however there are some indicators that will continue to put pressure on the market, primarily those being lack of supply, higher prices and interest rates,” said Allen. “The market is experiencing a cooling off period compared to the rapid growth over the past three years, but is not cause for concern as long as jobs keep pace.”
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