Regional Spotlight: Idaho Home Prices Rise despite Big Supply

RISMEDIA, June 25, 2007?(MCT)?Prices for Treasure Valley homes are still rising, despite an abundant inventory of unsold houses.

The median prices of homes in Ada and Canyon counties rose in May compared with the same month a year ago, according to the Intermountain Multiple Listing Service. Median prices were up 2.7 percent in Ada County, to $232,000, and up almost 1% in Canyon County, to $163,130.

Industry experts say sales numbers are approaching 2004 levels. That year is considered typical for sales of homes in the Valley. 2005 and the first half of 2006 represented a bubble, with fast-rising prices and a home-building boom.

According to the MLS, 1,028 Valley homes sold in May, off 7% from the 1,103 transactions in 2004.

Buyers had many more homes to choose from than usual: 7,470 homes, or 76% more than in May 2004.

“It’s not a bad market out there,” said Marc Lebowitz, executive officer of the Ada County Association of Realtors. “It’s just a different market. And the trend is the same all over the country.”

Existing homes in Ada County were on the market an average of 42 days, compared with 79 days for newly built ones, Lebowitz said. “That’s because the builder can’t sell for less than what it cost to build, but a reseller can change their price,” he said.

Shaun Tracy, an associate broker with Re/Max Capital City, attributes rising prices to the fact that more than half of the homes sold last month were fewer than 10 years old. They typically carry a higher price tag than similar homes 20 years old, he said.

But he cautioned that the market is not generating any momentum at a time of the year when sales have historically risen.

“The market is tepid right now,” Tracy said. “This year is going to be OK. But we’re certainly not going to be setting any records.”

Tracy said the market is also being held down by sellers reluctant to drop prices on their home to attract buyers.

“People will make every excuse in the world to keep from dropping their price,” he said. “That’s why momentum is flat.”

Lebowitz said May was a lean period for his membership. He said that with more than 4,000 members, having 720 closings in Ada County in May meant some Realtors “didn’t do a thing last month.”

But he said the market is not falling as much as returning to stability after two years of “gross instability” that produced the excess inventory now weighing down the market.

Distributed by McClatchy-Tribune Information Services.