Vermilyea's Real Estate Blog

Is It Time To Invest in Boise Real Estate?

The Boise real estate market continues to pick up steam as real estate investors nation wide take advantage of the great opportunities the Boise real estate market currently offering up.

Boise Idaho ranks number 3 on activerain’s February 2012 survey of the hottest real estate markets in the nation. Activerain’s survey targets those that are actively involved in the real estate industry on all levels; thus having their fingers on the pulse of the market. Real estate professionals are best qualified to see shifts in their local markets, months before the media at large takes notice.

The January 2012 Boise real estate statistics also point towards a much stronger market. Single family home pending sales have increased by over 20 percent as compared to January 2011. Pending sales tend to be a leading economic indicator and a strong forecast of future performance. As of February 2012, pending sales show no signs of receding and have already exceeded expectations.

The force behind the emerging Boise real estate market recovery is mostly due to the allure of the Idaho lifystyle to those that are relocating, as well as a relatively stable economy and diverse mix of industries that are well represented in the Treasure Valley. During the last economic boom that ended in 2007/2008, people were relocating in droves to the beautiful Treasure Valley (Ada and Canyon counties). Once the economy stalled, relocations slowed to a trickle when the housing crisis significantly created immobility issues throughout the nation. Some of those same national mobility issues remain, but no longer are they at the same level so we are starting to see the beginnings of another migration to the Gem State.

Another driving force behind the Boise real estate recovery are investors themselves. Savvy investors are attracted to the Boise real estate market because the Boise rental market has become red hot as the demand for rental units increases while the supply of rental inventory units decrease. Boise real estate investors are finding that even in the slow winter months they can still attract tenants, even after adjusting rents upward so they are reflective of current market value.

The most acute Boise real estate market dynamic is the downward spiral of available single family housing inventory that began in June 2011 and has continued unabated into 2012. Inventory levels have been reduced to below “normal” market levels and have continued to remain low. Low inventory levels, coupled with increased sales during the slowest selling season portend robust spring and summer sales. Expect to see more multiple offer scenarios play out beyond the REO inventory if inventory remains low during the warm weather seasons.

The Boise real estate market still has a large supply of underwater mortgages so expect to see bank owned homes hit the market but at a reduced rate, and the competition will remain fierce for the cream of the REO crop. As of late 2011, distress sales still represented about half of all single family home sales. The national mortgage relief settlement will likely increase the number of short sales on the market as compared to REO inventory which seems to have already peaked. Under this settlement, lenders will likely be more financially motivated to encourage distressed borrowers to pursue short sales so they can avoid the escalating cost of foreclosure.