Over 10,000 homes sold in Ada and Canyon County in 2007. While the 2007 Ada County residential market was off by 30.5% in units closed from 2006 and Canyon County was off by 39.9%, average prices for both counties held fairly steady. (Off 0.5% in Ada County and off 1.1% in Canyon County.) A six-month supply of housing is generally regarded to represent a balanced market. Based on the pace of residential closings over the past year, the local market is tipped slightly towards buyers, with 7.7 months of supply in Ada County and 8.7 months in Canyon County. The dollar volume of residential closings in 2007 was higher than in 2004.
Idaho’s economy remains among the best in the nation despite slower growth since spring. While job creation was strong, it fell about 11,000 short of the 28,000 new jobs created in 2006. Unemployment benefit claims also ended a four-year decline last February and have been running above previous-year levels since.
Construction employment, which has been a major source of economic growth the past three years, was flat during 2007, and manufacturing, which expanded in 2005 and 2006, lost jobs to the layoffs at Micron Technology and other businesses. But Idaho’s comparatively low operating costs, skilled labor force and quality life style continue to attract both business operators and workers, which is expected to keep the economy performing ahead of the nation.
Idaho Commerce and Labor News Release: 12/27/2007
Sellers – We wish we could say your troubles are behind you, but we’re not quite there yet. Once the number of homes on the market fall another 10% and the pace of sales picks up by 10%, the market will be in balance. Until then, price your home low enough to look like a good deal, then take advantage of a good deal on the other end when you buy. Stage your property to sell, not to live in. If your property is priced right, staged attractively and marketed aggressively, it will sell in this market. With any luck, this spring should be a little more fun.
Buyers – The following is reprinted from a February 2008 article by Dan Kadlec in TIME magazine. "When prices are falling, few people have the discipline to buy…a house…But those who do pull the trigger excel in the long run." The article went on to say: "It's time to get serious - before an inevitable rise in interest rates wipes out your advantage." "The thing that will make home prices stop falling is the very same thing that will push interest rates higher. So anything you gain by a further drop in prices might be offset by rising financing costs." Says Jim Svinth, chief economist at mortgage firm Lending Tree.
As we write this, the Federal Reserve stands ready to cut the Fed Funds rate for the third time in just six weeks. Clearly, the credit market jitters have gotten the Fed's attention. The emergency cut by the Fed at the end of January caught the markets off guard and spurred the drop in 30 year and 15 year rates to their four-year lows. Over the 4 weeks following the emergency cut, 30 and 15 year rates have risen sharply, but with the Fed continuing to be outspoken about their willingness to continue cutting rates as needed, it looks certain that the rate outlook will be very favorable into the spring and fall sales market. And contrary to some reports, financing is readily available with excellent terms, including low down payments for credit worthy borrowers.
