The real estate market is becoming quite a controversial topic these days. Depending on who you talk to, we are either in a strong market, or the bottom is about to fall out. So who is right? While median home prices are creeping closer to our peak, 2006 prices (off by just 3.1% in Ada County according to Boise Regional Realtors), everyone involved seems more willing to toe the line this time around. Lower inventory, and stricter mortgage guidelines are just a couple of ways that the industry is attempting to safeguard itself. While many feel that we can't sustain these high prices; the real estate and mortgage industries have added in more "checks and balances" along the way to avoid repeating history.
The saying "fool me once shame on you, fool me twice shame on me" seems to ring true for mortgage lenders these days. The lending industry not only raised debt to income ratio qualifications and increased documentation requirements, but they have also implemented high priced mortgage insurance to their high risk loans. While the high premiums for mortgage insurance may hinder young home buyer's purchasing power, it is yet another form of protection for all parties. While these stipulations may seem unfair to the innocent first time home buyer- mistakes have consequences, fair or not.
Another stark difference in our current market vs. pre-bubble burst, is that even with the large amount of new development in the Treasure Valley, we are still, comparatively, very low on inventory. Boise Regional Realtors reported that we are 63.9% lower on inventory than we were in July of 2007. Large supply of inventory, lenient lending guidelines, and record high prices led to the perfect storm of thousands of distressed properties in the Treasure Valley for several years. While our relatively low inventory is creating a challenging market for buyer's, it is a form of protection (intentional or not) against market saturation.
However, this isn't a full proof plan. If we continue to build at a rapid pace, in a few years we could put ourselves back in a dangerous position. With reports of 395 new residential units going in downtown Boise over the next several years, and new neighborhoods popping up every day, we could experience a deja vu if we are not careful.
For now, Boise seems to be experiencing growth that is sustainable for at least the foreseeable future and with interest rates still relatively low- there is a unique spot in the market for both buyers and sellers to get a piece of the pie.
Here is a snap shot from the Boise Regional Realtors on what is currently going on in the Ada County real estate market.
The Rachel Glick Group is committed to making our client's real estate dreams come true. It is our goal to make the process of buying and selling a home as simple and stress-free as possible. It isn't about selling real estate, it is about helping our client's accomplish their goals by listening to what matters most, providing accurate market information, and always asking the question, "What is important to YOU?".
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