Idaho's housing crisis: A little supply and a lot of demand

[00:00:00]I don't have to tell you this because you probably already know, but I will anyway. We are in a housing crisis. The average family in Idaho cannot afford the average home and things are getting worse. Justin Gorr has been digging into the many aspects of housing. Justin, we know a lot of the factors into this crisis.

[00:00:20]>> Yeah.

[00:00:21]>> Um but there's one really big thing that's dragging the market down. Do you know what it is?

[00:00:25]>> I do know what it is and I'm going to tease ahead to it. I'll tell you in a second. But first, let's look at the current state of things in Idaho. Maybe the market improved overnight.

[00:00:34]I'm being told no. Here's Redfin's latest numbers. The median sales price is sitting at nearly half a million dollars in Idaho. By the way, it's about 200 grand more than the average Idaho family can afford.

[00:00:48]Homes are still selling though, almost 3,000 in May, which is up 20% over last year. Also, homes are on the market for just 49 days and that is going down. Bottom line, demand is still high for homes in Idaho. Almost 15% of homes are selling above list price. That is up. Less than 20% of homes are having to drop their prices. That is down. And almost every home on average is selling for list price on average. So, what's driving all these higher priced homes to sell so quickly?

[00:01:18]Well, the same thing that drives up the price of anything. A lack of supply.

[00:01:24]Number of homes for sale is down more than 12%. The number of newly listed homes is down almost 5% and the number of months of supply is down a full month year over year. And that right there, the supply hunter, is the key to all of this, according to Chuck Crockatt with the Idaho Housing and Finance Association. Supply is the major thing dragging the market into unaffordable territory.

[00:01:49]>> Until we see more supply, we're going to experience this uh, kind of uh, stagnation that we've seen.

[00:01:59]>> So, why aren't we seeing more supply?

[00:02:01]For those of you that have been around a bit, you might know. Back in '08, the housing bubble burst here in the Treasure Valley. Home building stopped. So, home building companies were left holding the bag on properties they were never going to sell. Their workers couldn't work, so they moved away, and many of those companies went out of business. The ones that did survive, well, they're making sure they never overbuild again.

[00:02:27]>> I do know that builders, when they start to see inventory pushing that three or four month mark, they will stop building cuz they don't want to be sitting on vacant land or partially built homes if they're not continually turning over. And so, I I I agree with you 100%. I think the ones that lived through that '08, '09, '10 crisis, they've learned their lesson and they don't want to get overextended. Uh, and so, I I do think that's a challenge.

[00:02:53]That's, you know, part of the reason that that we haven't seen as much building as we need because they're a little bit more reserved in how they look at the market and they're they're almost looking at it month by month and looking at those inventory numbers to make sure that the demand is there to buy those houses.

[00:03:10]>> So, supply is not meeting demand and it's not likely to in the near future to bring down those prices.

[00:03:16]So, what can I tell you if you're thinking that you're never going to achieve the American dream of buying a home? Well, Chuck says you may actually be closer than you think. You may also be as far away as you think, but he recommends meeting with a lender to talk real numbers, understanding your budget, taking a home buyer education course, and finding some down payment assistant programs out there. They may help.

[00:03:38]>> I was going to say those classes would be huge. First-time home buyers, that helps a little bit. So, yeah, that's a big barrier is the down payment. So, how much >> Yes.

[00:03:46]>> Typically, if you don't have these programs in place, I should say, what do you need?

[00:03:51]>> Well, in order to avoid paying mortgage insurance, you need 20% which on the median Idaho homes would be almost 100 grand in in cash. Most folks do not have that lying around. If you do, I want to be your friend. But again, there are programs out there where you can buy a home with as little as like 500 bucks down.

[00:04:10]>> Well, >> However, then the monthly payment is is higher.

[00:04:15]>> Right.

[00:04:16]>> And then you got to figure out if you can afford that.

[00:04:18]>> 500 bucks down though, I didn't realize you could go that low.

[00:04:21]>> Yeah. But again, it's it's more to pay every month. Yeah, yeah.

[00:04:25]>> the whole works.

[00:04:27]I learned something new today. All right, Justin. Thank you.