Boise Real Estate Predictions (Nampa, Meridian: 2009, foreclosure, condominiums)

[zamboni]

Anchorless and Starida....the Treasure Valley job market is as tight as a drum...and thighter than you know what...with 20,000 college students and gradutes every 6 months wanting to stay here, competition is keen, unless you have that something extra special. (casting couch)

[micrguy]

Plus you have a lot of people that took a golden parachute, relocated here and are willing to be underemployed to live the Boise lifestyle. Couple of corporate type jobs that I applied for in Boise had me competing against former VP's of major companies willing to work for half of what they had been paid back east or in California. If you want to do sales, there are a lot of openings. I found a sales job in 3 weeks, a real sales job that does not involve selling cars, insurance or MLM.

[ktuskey]

Of what the media is reporting. Boise has one of the lowest unemployment rates in the country yet locals seems to says it's really tight. Which is it? Are most of the jobs flipping burger jobs or where are those stats derived from? Like one of the other posters said, it's a very confusing time.

[micrguy]

When I was looking for a job earlier this year I went to a professional placement service and this is what he told me about the Boise market when it comes to jobs. If the job pays less than $30,000 a year there is a huge demand for employees. Because Boise is the most remote big city in the US, not too many people want to uproot and move here to make $25,000 managing a store at the mall or a fast food restaurant.

If the job pays more than $50,000 then you start competing against the highly skilled and highly trained professional willing to work for less than what they made living in California or the east coast. The other thing that I found out is that most of the new professional level jobs or sales jobs that are in Boise are unadvertised or have not even been created yet. My employer was not looking to hire anyone, but when my resume found it's way to them they decided to create a position for me and brought me on board. My advice is to give your resume to everyone you meet and tell them to pass it on to people that they know. That's how I found my job, gave my resume to a friend and he passed it along to one of his vendors.

[boisefan88]

This thread is kind of an interesting read and fun to revisit.

I think of all the responses this one has come the closest to most accurate.

Originally Posted by Luke9686

I'm no realtor, but am an investor in Silicon Valley. Not from here, and moving in January. It sounds stupid, but my hobby is researching the real estate markets of other places.

I think we will continue to see the downswing through 2008 and into 2009. The market should be corrected by 2010 and start to see increases again. Remember, there are still MILLIONS of sub-prime loans that are due to adjust in the next 2 years. Most of those people haver "teaser" rates of 5% and below. They will adjust to the prime rate, which is near 7.75% now.

Do the math on that. If someone bought a home in 2003 for $190,000, with a rate of 5%, their payment would be $1020 per month. Now when that adjusts to the current rate, 7.75%, their payment will increase to $1361. OUCH. This is what is fueling the foreclosures.

Now on the flip side, the market in Boise is a little more stable than say Arizona, Vegas or Cali. They have just recently started to build intensly there. The Vegas, Phoenix, Sac markets have been FLOODED with builders, which why those areas are having HUGE reductions. That hasn't happened as bad in Boise. The building in Boise has pretty much stayed in sinc with demand. Other markets like Vegas had massive overbuilding, which is why they are offering huge discounts, and upgrades just to move the houses.

Also, Boise didn't see the huge price increases as other places. Sure your homes probably almost doubled, but they are still on par with the national average.

So add all these things up and you have a pretty safe investment. I think if you bought now, and didn't plan on moving within the next 5 years, you will make out.

Which brings me to another thing. It seems like the thing to do (especially in Cali) in the past few years was to buy a house, wait two years, sell it and by a bigger house. I myself think this is stupid. You should not buy your primary residence like you would an investment.

If it makes sense for your family to buy, I don't think you will lose if you stay put for 5 years.

[AlleyTD]

I agree with the above post and I am a Realtor ... who also just bought a new home last month.
However, we have stellar credit and we watched the market for a year while renting.
When we finally found "the house" we put 60% down and only took a 100K mortage at 5.75% FIXED.

We bought in a fairly upscale part of town.
Our mortgage is low and we aren't going anywhere until the kids are grown and gone.
Which won't be for another 15+years.

I am certain we made an excellent investment and it was not a short sale.
It is just a great house - that finally dropped to the right price for us - and then I was able to negotiate it a bit lower

If you are ready to buy ... your finances are in order ... and you don't plan on going anywhere ... there are some great deals here right now.
While it may not be a great time to buy a house to FLIP ...
I believe its a great time to buy a HOME - if you plan on staying put - and you do your homework.

I am a Realtor because I would have made other Realtors nuts!
I looked at over 320 homes in a year.
I am certain, beyond a shadow of a doubt, that I got a good home at a great price.

[pll]

Originally Posted by AlleyTD

I agree with the above post and I am a Realtor ... who also just bought a new home last month.
However, we have stellar credit and we watched the market for a year while renting.
When we finally found "the house" we put 60% down and only took a 100K mortage at 5.75% FIXED.

What would the same scenero be like in California. ($100-120 loan/15 year 5.75 fixed) What would the risks be investing in a home in a struggling real estate market? We may have to sell our home in Boise and move closer to our elderly parents. We would retire there as well. If it has the potential of being a disaster we would have to hold off and move at a different time.

[Big Larry]

I think Boise area homes are still overpriced by 15-30% or more. I still see plenty of $300,000+ homes for sale. How many of those mortgages were taken out with 10+% down and at only 2.5 times income. I would bet they are a minority. Boise doesn't have an economy to support those prices. As these higher priced homes continue to correct, they will put downward price pressure on the cheaper homes.

I don't think real estate prices will bottom until 2011 or beyond. Also, consider that after asset bubbles pop, prices usually overshoot to the downside. The wild card here is obviously the government and also the potential for inflation.

[Syringaloid]

Boise easily has the economy to support $300,000 + homes because there were many of those around before the market experienced the spike in prices 4 or 5 years ago. The median income also supports this.
I also think the market is bottoming out and will start moving forward again this year or next year, the values in my neighborhood are not much lower than they were 2 years ago. Most of my friends who are involved in real estate are seeing sales picking up. It is just the foreclosures we need to worry about.

[Big Larry]

A family income of $120,000 would reasonably support a mortgage of $300,000 (2.5 x income). I know plenty of college educated couples in Boise that don't make close to that much (less than $100,000 combined). Sure some do, but not enough to support the inventory of homes that are currently priced at or above those levels. Throw in that HP just announced disappointing earnings yesterday due to lagging sales in their printer division, an uncertain future for Micron, and many software/technology companies in the U.S. (a sector that Boise is notorious for) reporting atrocious earnings this quarter with very bleak future estimates, and I don't think we are at the bottom yet.

I would also add that much (more than people realize) of the prosperity of the U.S.A. during the last 25-30 years was due to debt expansion, (i.e. it was a facade). Our country's total debt (government, corporate, and personal) is 52.1 trillion. Our GDP is only 14.4 trillion. This is the largest imbalance in our recorded history. Something has to give, but sadly the politicians are trying all that they can to keep the bubble inflated. We'll see. Time will tell.