Boise - There is no doubt - according to various reports - that the state of national housing market is poor, but here in Idaho, things are much different. In the microcosm that is the Gem State, the housing economy is steadily growing, unemployment rates are low (2.7 percent versus the national average of 4.7 percent according to November 2007 statistics from the U.S. Department of Labor), the technology sector of the Idaho economy continues to grow and the U.S. Census Bureau noted an increase in Idaho's personal income - the sixth-highest in the nation. Despite the economic prosperity, there still exists the buyer's 'wait-and-see' mentality; who can blame them with all the negative local and national coverage? However, one must truly examine and weigh data against their local market. Jonathan Miller at Radar Logic (a New York- based real estate research firm) describes the predicament best in saying that, "...there is no 'national' housing market, resulting in significant confusion and frustration." This is a strong argument that rings true. In fact, Idaho has one of the strongest housing markets in the country amongst solid overall growth in the Rocky Mountain States.
With reports surfacing regarding foreclosures in Idaho at record highs, one can be hard-pressed to feel confident to purchase. It must be noted, however, that these record foreclosures are a result of sub-prime mortgages. The Idaho Statesman recently reported that industry watchers 'blame sub-prime mortgages made by lenders to consumers with shaky credit histories [as] the primary reason...' These interest-only adjustable rate mortgages (ARMs) typically begin with a low rate, allowing for a lower monthly payment; when the rate adjusts, consumers find their payments increasing significantly and their inability to pay these obligations can lead to foreclosure.
It is important to know the terms of conditions of a home loan to avoid these pitfalls; consumers must ask questions of their lender so they fully understand what they will be bound to. It is of consequence that many people are foreclosed upon, but this should not shake the consumer's confidence to buy a home. After all, the foreclosure crisis is based upon a homeowner's inability to fulfill their financial obligations and not the abundance of homes for sale. Furthermore, lenders have recently tightened their credit review process and continue thorough scrutinization of credit history and worthiness.
If we are still not convinced that Idaho's housing economy is strong, one must only take note of the September 2007 article in which Dennis Cauchon of USA Today wrote that 'in Idaho, the state with the nation's fastest-growing economy, homebuilding hasn't crashed as it has across much of the USA.' In a recent Idaho Statesman article, Willis Stone, President of the Idaho Association of Realtors, said that 'Idaho's low unemployment rate, ...low interest rates and a slowdown in building starts will boost home sales in 2008.' Both the USA Today and the Idaho Association of Realtors agree that Idaho's housing economy is strong against national numbers, which are on an increase. Walter Molony of the National Association of Realtors (NAR) presented some promising numbers in December. "Existing-home sales rose slightly in November, indicating stabilization in housing in the wake of mortgage disruptions earlier [in 2007]." Additionally, the NAR said total housing inventory declined 3.6 percent at the end of November.
Remember that unlike a car or a boat, a home is an investment - not an expense. The current market is working to your advantage; existing homes sales have seen considerable drops in listing prices, and new homebuilders are offering more incentives to buyers. As the NAR has said, the market is showing steady stabilization - the time to act is now. Waiting for that next great deal on a home, or passing an even better deal in the hopes for something better may just leave you on the sidelines in the upcoming spring season.
Source: Paid Advertisment in Idaho Statesman
January 18, 2008