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Ada County Values Improve as Distress Sales Decrease
In 2007 when the real estate bubble came to an end, values declined. In most areas and for most types of building types, the decline wasn't drastic. It was a slow decline. However, once the distress sales (REOs and Short Sales) began to dominate the market values declined more sharply. Different segments peaked at different times. For example, Ada County 4 plexes peaked in January of 2010 when 100% of the sales were from distress sales. On average, we ended up with 89% of all Ada County 4 Plex sales being a distress sale. This obviously affected values. In 2011 we saw that average drop to 59%. Today, we're under 20%. This, along with low inventories has improved values. I believe that we will continue to see these the number of distress sales continue to decline back to a normal amount and things should settle down.
The single family market is certainly a different market. I don't track the data for single family homes to the level of 4 plexes, but the numbers are also improving in most areas. Price point is more of an issue with single family homes. Homes over $400K are still suffering. Certainly the best buys for your dollar are those higher-end homes. It’s amazing, you look at a home for $200,000 and you likely will find a 2,000 square foot home in nice condition but still a basic home. Triple that price and you find a 4,500 square foot home sitting within a prestigious neighborhood on a view lot, and upgrades fit for a king, but on the market for many months with very little activity. In contrast, homes under $140,000 are really moving fast. From where I am sitting, things are improving.
Tony A. Drost
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