Boise Home Prices Getting Stronger:
As the article below highlights, larger cities with higher inventory levels are seeing further price reductions, small markets like Boise, ID are enjoying price increases due to dwindling inventories.
U.S. Home Prices Fall, While Boise Surges
By Front Street Brokers
The Standard & Poor's/Case-Shiller home price index for the month of January recently showed home prices falling in most major metro cities. Down 3.8% year over year in their 20 City Index, and down almost 1% in January from the previous month.
As with any bad news this got a lot of press, in part because housing news in the first quarter of 2012 has been fairly positive and encouraging.
So what caused the price drop? With home sales increasing and inventory levels dropping across the US, why would we see further decline? I spent some time investigating the causes of these recent declines in home prices and this is what I discovered:
First, not all cities are down. Many larger metro cities did see some recent declines in home prices, but other, smaller metro areas like Boise, Idaho have seen a recent upturn in home prices. Boise's February home prices were up 11% higher than January's. One reason smaller markets are rebounding quicker is due to low levels of inventory of homes on the market in comparison to the numbers larger metro markets are showing.
Another reason many cities are experiencing a new dip in home prices is due to the price range in which people are buying. A lot of the recent increases in home sales have been in lower priced homes, especially with more investors trying to buy properties priced at the bottom of the market. Whereas typical home buyers tend to purchase in the summer months, investors tend to be very active in winter and therefore, home price statistics often dip in Jan-April. As market home prices are determined by an average of all homes sold in a month, this concentration of activity in the lower price ranges skews the median homes price stats down and gives the impression the market is getting worse.
Boise appears to be ahead of the curve on its recovery, primarily because it has burned through the majority of its foreclosure inventory in the lower price ranges. Other markets are not so lucky and will likely see further declines in 2012, while the bulk of buyers focuses on homes priced at the bottom of the market.
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2012 Boise Market Forecast: 7m41s
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