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Boise Area Housing Market Overview
It's the slow part of the annual cycle, but the market is continuing to trend positively . . .if maybe moderating some from the rate of the immediately preceding years. (check out the updated charts and graphs on our website's Stats page):
VA Loan Limit Caps Removed
Veterans may be eligible to buy larger homes in pricier communities – still without a down payment – starting next year. Those taking out Veteran Affairs-backed mortgages will find caps removed on what they can spend in 2020.
The Blue Water Navy Veterans Act of 2019 removed the caps for the new year. But military members on active duty and veterans will still need to qualify for the mortgage, and verify they can afford the monthly payments.
VA loans have been capped at different amounts nationwide. Borrowers could take out more on a VA loan in a high-priced area like San Francisco, for example, than they could in Detroit, where home tend to cost less. If they exceeded the set limits in the city where they lived, they were required to put down 25% of the difference on the mortgage. If they stayed within the loan limits they could get a zero down VA loan.
Under the new rules, vets can get a loan amount in the amount they can qualify for and are not bound by city caps. Banks can still put in some restrictions to protect themselves against defaults. For example, some lenders may require higher credit scores or debt-to-income ratios in qualifying for the loans, realtor.com reports. The loans likely will only apply to a borrower’s primary residence.
The Market Outlook for Ada County Real Estate
(Single Family Homes)
Sales Year-to-Date: Ttl Sold 9506 $3,616,064,774
Sales YTD 2018: Ttl Sold 9618 $3,309,492,856
The typical Single Family property in Ada County is a 2105 square foot, 3.4 bedroom, 2.36 bath, 2.25 garage bays, house on a .21 acre lot. That includes new construction as well.
In 2010, 5896 Single Family residences were sold in Ada Count y – of which, 15% were new construction. For this year, through October, 9506 homes have been sold, and 30% of them have been new construction. Building is booming. Two main factors are fueling the new home market: 1 – Over time, listings to sell existing homes has not increased proportionately to the total number of homes sold, and 2 – The Boise area has become a very popular relocation destination.
Those waiting for the “correction” before they take action, will be disappointed. That’s not in the foreseeable future. As long as inventory is constrained, and demand continues, this market will be solid. The macro factors that combined to create the real estate “bubble” , and its ultimate collapse, are no longer in place. The confluence of policies put in place by disparate agencies, that combined to pervert the real estate market, was a consequence of a government too large for different agencies to know what others may be promulgating, and their unintended consequences when combined. Since then, new controls have been implemented.
The outlook for now indicates moderating housing prices. Prices will continue to increase, but at a slower rate. That may be a result of more new construction coming online to support supply. The charts and graphs on our website’s Stats page are updated monthly to capture the latest activity. The data presented includes the important metrics that indicate how the market may be changing.
National political / economic events of significance great enough to affect markets, including real estate, will be obvious to anyone paying attention. I look at each month’s loical real estate market results for the more subtle changes that could have an effect on our market. In the meantime, check in on our website’s Market Stats page to see what the local market is doing.
2018 National Migration Study
United Van Lines and U-Haul 2018 Customer Data
Among all who move, there are those who use moving companies, and those
who do it themselves. So, data from both companies provide broader
information about who is moving where, and why.
Valuing The Price Of A Home . . .
Dollars-Per-Square-Foot Only Goes So Far
When we do a comp for a house, we try to compare our subject house with others which: have sold recently; are similar in size (living area and lot); have a similar configuration (bedrooms, baths, garage bays); are close to the same age; and, are located a near as possible to the subject home (in the same sub/community is preferable).
Our first step in developing a value for a subject house is to find as many recent sales of comparable houses as exist. Initially, we go back three months. If there happen to be quite a few, we can reduce the time-frame to get more current market pricing. Five good comps are preferable.
With the comparables selected, we make two objective evaluations. In the first, we relate the average of the DPSF of the comps to the square feet of the subject house for a snapshot value. With the second, we adjust for all the differences the comps may have from the subject house. There could be more or fewer bedrooms, or baths, or garage bays . . .or square feet.
Relative to quare feet, as it varies in one way or another from the subject house, the value by Dollars-Per-Square-Foot becomes less accurate, as it does not scale in a linear fashion. Most of the time, the results confirm our intuition. However, we still will consider whatever subjective differences there may be between our subject house and the comps – condition, especially. Also, some may be in a less, or more, desirable sub/community. Lot sizes and siting could also be considered.
After all this, we discuss the results with our clients. Often, they have their own ideas as to where their house should be priced. Ultimately, an offer price is established. If the potential purchasers will be buying with a loan, there is always the possibility that the house will not appraise at the offered price, so the sellers must be advised to be prepared to renegotiate, or let the deal fall. When house is ready for the market, we list it.
If you would like us to do a Market Evaluation for your house, give us a call. We’ll gladly do one for you.