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Our Portland, OR paper had an article this morning stating that Southeast Idaho (Idaho Falls/Rexburg) has a 20 YEAR inventory of homes priced over $500K. Wow! We are planning on moving soon and were looking at homes half that price. Will the higher priced homes drop in price fast with this kind of glut?? any thoughts?
It's a hard call. From what I'm seeing and I'm not in the realty business, it looks to be a buyer's market. I know from some of these custom built homes, the builders are losing money as well as folks who planned on purchasing.
Depending on exatly what you're looking for, be it brand new or an existing home, there are plenty of homes available for under $300,000.
Keep in mind that homes are only going to drop so far. Lots of times people wait too long for the market to "bottom out" only to find out that they've missed their chance. A house priced at 500k is not likely going to drop down to 250k if that is what you are looking for. The lowest a seller is typically going to go is what they owe on the home and with a new home on the market there is no chance of built in equity that they can use as a cushion.
I'm not an expert in the Idaho Falls area so it would be unfair of me to comment on the status of that market. Just friendly advice to stay realistic with your expectations. There are deals out there, but there's a point when buyers can become too greedy. I'm just speaking in general terms, not in regards to anyone specifically. Wish I could offer more insight, but it's not in my area.
Keep in mind that homes are only going to drop so far. Lots of times people wait too long for the market to "bottom out" only to find out that they've missed their chance. A house priced at 500k is not likely going to drop down to 250k if that is what you are looking for. The lowest a seller is typically going to go is what they owe on the home and with a new home on the market there is no chance of built in equity that they can use as a cushion.
I'm not an expert in the Idaho Falls area so it would be unfair of me to comment on the status of that market. Just friendly advice to stay realistic with your expectations. There are deals out there, but there's a point when buyers can become too greedy. I'm just speaking in general terms, not in regards to anyone specifically. Wish I could offer more insight, but it's not in my area.
I think Torrie ads a lot of perspective here that is worth considering. As a licensed realt estate agent, which most of us are not, she understands the ebbs and flows better than many of us.
Sarah, I think one of the most disappointing factors of what you've repeated (and I do believe you), is an article was published locally in the Idaho Falls newspaper, "The Post Register," on Friday. It highlighted ONE BUILDER who built exclusively high end homes. It did not address many companies that also build higher end homes.
The headline, via various AP releases and local headlines, has been everything from "Idaho Falls sees a slow down in high end home growth sales," to "It will now take three months for high end homes to sale in Idaho Falls," to whatever you saw.
Personally, I would believe certain comments made more, in that article had another another journalist written them, compared to the reporter who did. If you want to know more, send me a PM.
One point I think I can point out here is the author named ONE CONTRACTOR ONLY as a builder who can't sell his high end homes as fast as he thought and his subsequent finacial/legal problems. If you want to know that contractor's name, please send me a PM. I'd be happy to send you that information. It should be noted that the reporter writing this story couldn't reach the contractor for his point of view.
What also should be noted is the story focused on a couple who had paid over $60K as a down payment to have their high end home built. They are relocating from CA. This was NOT a spec home.
Reliable sources have told me this contractor is doing his best, including recently selling his own high end home, to pay those he owes. Did he personally build too many high end homes that he didn't sell fast enough to keep everyone paid? Probably. Does that mean every contractor or developer is in the same condition? Not necessarily.
Have sales of high end homes slowed down in Idaho Falls? While not being a realtor, I believe I posted another article when I first heard about this (on another thread) and Torrie was kind enough to make sense of it as well. In that article, again, it said the "slowing" meant sales were taking 90 days instead of a quicker turn around.
To me the real questions are these:
1. Where are those who are buying high end homes moving from? If it is predominantly CA, AZ and NV, or other states where they are getting receiving large sums of $ for their current homes to invest in their new Idaho Falls area home, I don't think too much will change. This information is of limited value, unless those home buyers used this particular contractor.
Sarach, as you rightly state, if a housing market in another state or different area of ID slows down, those wishing to relocate to Idaho Falls/Ammon may have a longer wait until their own home sells.
I must clarify and say I don't know anything about the Rexburg market. I am clueless to know who the buyers of high end homes are in Rexburg.
Maybe a better question would be to contact a realtor who sales property in Island Park or Swan Valley where the price tag for often second homes is $750,000-$1,000,000+ and see how their real estate is moving.
2. Idaho Falls/Ammon real estate has been moving, similar to Boise and CdA's at a pace faster than most of the nation. Is this "slowing" and correction we're seeing just brining the Idaho Falls area more in line with the rest of the nation? I don't know the answer, it is just simply a question to ask.
3. How are people financing their homes? Did patterns of recent mortgage options catch up with some people so they are struggling to make their curreht payments?
4. Going back to something I said earlier, I'd look at how homes in the price range, of those selling their current property and ability to do so, who anticipated buying Idaho Falls high end homes.
I'm no real estate expert, just someone who knows a little more facts about the story.
While fully acknolwedging high end Idaho Falls/Ammonhomes aren't moving in a matter of weeks, rather months, I'd encourage all to get more facts.
Often we complain that the national media run with headlines and slant them. From my POV, I'd truly have to say this is a time that local AP headlines (whatever the publication) have been slanted to meet the individual publications agenda. This is the first time I've heard Rexburg included in this AP release and not Pocatello.
I'd encourage all who are confused to do just what Sarah has done: ask more and get the facts from those who know.
Sav: As Torrie said...it's hard to tell when the prices of homes will bottom out. But I rather find out that I bought a home when the prices are on the rebound than to find out I bought way too soon. I think a healthy does of patience is needed in this and any real estate market. Unless you are in a position where you absolutely need to buy a home then stay on the sidelines.
I'm sure many people who bought homes in 2004-2006 wished they had the guts to wait things out.
Sav: As Torrie said...it's hard to tell when the prices of homes will bottom out. But I rather find out that I bought a home when the prices are on the rebound than to find out I bought way too soon. I think a healthy does of patience is needed in this and any real estate market. Unless you are in a position where you absolutely need to buy a home then stay on the sidelines.
I'm sure many people who bought homes in 2004-2006 wished they had the guts to wait things out.
TopKinto and Torrie,
Just wondering what you both think (as well as others). Say a person MUST make a move for work, what would you both think of renting? I know many think that is just throwing $ away, but in waiting for a market to correct, in any city or state, what would you think?
Or, is it better to try to get a condo or something smaller than one might buy just to invest in real estate?
If someone must move, for whatever reason, and housing prices are shifting, what would be a couple of suggestions your would have? Would living a bit farther away from the "epicenter" of higher end homes potentially be a wise move?
Thanks for your thoughts. I'm looking forward to them!
Mtn States: I'm moving to Idaho at the end of this month. Both my wife and I agree that buying as soon as we get to Idaho is not a good idea. With everything I have read, we still have a 10%+ decrease in average home prices in Idaho coming in the next 6-12 months. So we will rent until this time next year.
I'm in no hurry to make a huge purchase that I might regret or might love. Renting makes sense for a family in my position. I'll be able to find the right house, neighborhood and hopefully the right price while I'm renting.
As far as throwing money away as a renter? If I can get a $200K house for $180K by just waiting 12 months I saved $8,000 assuming I rented a home for $1,000 a month. I believe what my daddy always told me..."A house is not financial investment. It's a lifestyle and emotional investment". Good old Dad was into estate investment during the 1980's and 1990's. He made a ton of money in the business but to this day his words ring loud and clear. Buy a house to make it a home and never, ever assume you will make a penny off the sale.
Just wondering what you both think (as well as others). Say a person MUST make a move for work, what would you both think of renting? I know many think that is just throwing $ away, but in waiting for a market to correct, in any city or state, what would you think?
Or, is it better to try to get a condo or something smaller than one might buy just to invest in real estate?
If someone must move, for whatever reason, and housing prices are shifting, what would be a couple of suggestions your would have? Would living a bit farther away from the "epicenter" of higher end homes potentially be a wise move?
Thanks for your thoughts. I'm looking forward to them!
MSR
I would say before someone decides on renting, talk with a real estate agent. Find out what the market is doing, in the location you are moving to, before you make that decision. Depending on where you're looking, the market could be right on the cusp of changing so it's important that the agent you're working with has a good idea of what the numbers are showing. Every market is different so don't get an impression by what the media is saying. Lots of times the statistics being posted are not an accurate description of the area you are moving to. Also it's important to know how to interpret statistics. Many times I've seen local statistics on the news that really don't give the right perspective as to what the market is doing. If I wasn't an agent I would be very confused on what I was being told.
So, say you have to sell your house where you're at and you know the market is down(We're talking about the current market today). Keep in mind the area you're moving to is most likely going to be down(check with your agent to verify that). If that's the case most likely it's going to be a wash. What you loose in the sale of your home, you will also be able gain a good deal on the purchase of you're new home.
Moving can be quite stressful, especially if you have a family, so if you don't have time to come and visit the area before you move, renting is not a bad idea. It gives you time to get a feel and explore different neighborhoods to see which one fits you're family. Depending on what the market is doing at the time, you might not want to get into a lease situation. I can tell you in Boise, the market here has pretty much bottomed out. For someone who might be considering this area, and wants to get in while the prices are low, I would say do it now or by early next year. The market is looking to make a change for Spring of 08. I think you will see the prices holding firm and going up. Demand for homes will increase and I can tell you from looking at statistics that the supply has been steadly decreasing over the past three to four months. Builders are not building like they were so new construction will be harder to find. Keep in mind it takes 120 days to put up a home so as demand increases the supply is not going to be there. It very well could turn into a seller's market.
So you can see why it's so important to understand the market and know what's going on. You don't want to sit on the fence much longer here or the deals will be gone. For anyone who's interested I do have a graph that show's this for the Boise market that I could share. Just send me a direct message with your email and I can forward it on to you.
Everyone's situation is different and you have to do what works for your family. Just be aware of what the market is doing so you can make the smartest choices. The thing that concerns me the most is the media has a tendancy to focus on the gloom which doesn't always give the most accurate information. So someone who reads the news frequently and follows the market faithfully might think they have all the information they need to make a decision. Well I can tell you that might be a wrong assumption. Let me give you an example. Last night on the news , it reported that home prices in Ada County were down 7% compared to last year at this time. But if you pull stats in MLS you wil see that prices have increased in Ada County since January of 07 by 8%. So even though both pieces of information can be right, it can be very confusing to someone who doesn't study the market and doesn't know how to interpret the information. With any profession there are things that you just won't know or won't even think to ask because it never occured to you. Which is why it's so important to work with a professional because they will be able to interpret a lot of the mis-information that gets put out there.
To answer your other question, I don't think I would buy something just for the sake of buying over renting unless you plan to stay in it for a while. You could end up paying closing fees twice around and unless property values appreciate quite rapidly(most likely they won't) it's not worth it.
Long winded answer to your question. I hope this helps.
I'm a Realtor in Idaho Falls and you are correct that the market is currently saturated with homes over $400,000. As far as prices dropping, they have been cutting them, but not by 50% and I don't foresee anything even close to that ever happening. The problem for the sellers is not a slow market, we actually sold more homes this year than last. The problem is that overly optimistic builders jumped on a booming real estate market and overbuilt. Part of their optimism came from the large numbers of Californians selling their homes and moving to the area, bringing in higher end buyers. Now that California's real estate market is what it is, we're not seeing near the numbers moving here as before. Now is definitely a very good time to buy. If you're looking for a home between $250-$300,000, there's quite a few to choose from in that range as well.
"I would say before someone decides on renting, talk with a real estate agent. Find out what the market is doing, in the location you are moving to, before you make that decision. Depending on where you're looking, the market could be right on the cusp of changing so it's important that the agent you're working with has a good idea of what the numbers are showing. "
No offense intended to anyone, but as a former agent myself I would definitely say RENT before you buy, but avoid a long term lease. I would also advise speaking with SEVERAL agents from DIFFERENT brokerages, as well as doing YOUR OWN RESEARCH. If your new location is good enough to buy in, it should be good enough still in 3 or 6 months. REALTORS ARE NOT CLAIRVOYANT AND SHOULD NOT MAKE STATEMENTS ASSURING YOU OF ANY FUTURE VALUE.
I live in an area where people who got caught up in buying before prices went up are now stuck with their losses. For a long time. And up until the bitter end, increasingly desperate agents, some of whom maybe believed their SALES ORIENTED REASONING, were readily convincing buyers to buy quickly. DON'T DO IT!
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I Would Certainly Gather More Information
What if one HAS TO MOVE Within a Given Timeframe?
