Idaho is one of five states that saw housing prices climb by more than 12 percent from the first quarter of 2012 to the first quarter of 2013.
In Idaho, home prices are up 15.1 percent over the first quarter of last year. But as the State Economic Monitor from the Tax Policy Institute points out, Idaho is among states that saw the sharpest decline in home prices during the recession.
John Starr is a Boise broker with Colliers International. He says in a normal market, 15 percent growth in housing prices would be cause for concern. He says 5 percent a year would signal a healthy market, but Idaho is still bouncing back from the boom and bust of the recession.
He says Idaho’s housing market was “massively overheated” during the peak years of 2006-2008. “We don’t want to go back [to those inflated home prices]“, says Starr.
Starr says the interesting number to watch is the peak-to-current figure. That’s home prices from the peak of the market, late 2006, to today. That’s where recovery is measured, he says. Since the fourth quarter of 2006, prices are down 38.8 percent, says Starr. “That number should get to zero, but it shouldn’t happen quickly.”
The Tax Policy Institute’s report also shows Idaho is above the national average when it comes to the average number of new home building permits. From May 2012 to May 2013, the number of permits issued is up 37.4 percent. The national average is 31.2 percent.
“Permits are the best indicator of actual growth,” says Starr. “The rubber band pulls, and gets snapped back – right now the rubber band is starting to pull.”
Starr says for the last 18 months, developers have been busy readying new residential subdivisions in Ada County. In neighboring Canyon County, Starr says most vacant house lots are still waiting to be developed.