People are always asking me what the market is doing in real estate and I keep saying “It Depends”. Anyone that gives a quick answer to such a broad question should be dismissed immediately.
The old proverb of “location, location, location” is still true. You can look at a snapshot of just the market in Eagle and draw a very different conclusion than if you looked in Kuna. Even the nine different MLS areas that make up “Boise” will provide drastically different answers. But since my blog is based on “Ada County” the following numbers are averages for the entire county. I would be glad to research specifics if you need them.
The quick good news is that every single market segment (homes, condos, mobile homes, etc.,) showed improvements over the first quarter! For example, we sold 388 more single family homes in the second quarter than in the first. Although these numbers are still below 2nd quarter 2007 numbers, it is nice to see the market shifting positive.
Of the 1,691 homes that sold in the second quarter of 2008, 27% of them were brand new homes. That is about the same ratio as it was in the 2nd quarter of 2007; however in 2006 that ratio grew to 39% of the homes sold were new since we were busy trying to cure the appetite of all the investors moving their money to Idaho.
According to the Construction Monitor, building permits have also increased in the past two consecutive quarters. This is the first time we have had back to back increases since 2005!
Keep in mind that effective today, there are still 5,682 active listings (not counting the 883 that have offers waiting to close). Even though that sounds like a lot of homes, even with all the negative publicity in the first half of the year, we still managed to close 2,972 houses so we currently have about a year of standing inventory at this rate. I don’t expect sales to be at the level they were in the second quarter of 2006, but using that absorption rate, we would only have five months of inventory!
That is the interesting thing about analyzing the numbers, if you know what you are doing, you can make it sound the way you want. Samuel Clements “Mark Twain” is one of my favorite authors and that was before I realized that he was the one that said “Figures don’t lie, but liars figure”! Look at the statistics including historical perspectives, not just a snapshot, before investing your money or deciding to sell.