Metrostudy’s 2Q14 survey of the Treasure Valley market showed that activity and prices in the region are increasing even as the supply of new homes coming to market at the lower price points is dropping. There were 837 new homes (both attached & detached) started during the second quarter of 2014, down 21% from 2Q13, however increased 22% from last quarter. New home closings totaled 739 during the quarter, and decreased 18% from last year at this time however increased 19% from last quarter. New home starts for the first half of 2014 are down 14% compared to the first half of 2013. Annual new home starts have been increasing between 40-70% since 2Q12, however have begun to level off. Annual starts have increased 4% compared to last year’s pace for a total of 3,239 and annual closings are up 5% to 3,102.
Ada County started 605 new homes during 2Q14, which is down -27% compared to 2Q13, however increased 14% from last quarter. Annual starts increased 1% from last year to 2,403. There were 548 new home closings during 2Q14, down -27% compared to last year, however up 17% from last quarter. Canyon County started 223 new homes during 2Q14, which is down -.4% compared to last year, however up 52% from last quarter. Closings during the second quarter increased 29% over last year, and 22% from last quarter, for a total of 185. Annual new home starts increased 12% over the pace last year to 819 and annual closings are up 31%, for a total of 789.
“Affordability concerns and escalating prices continue to limit options for first time buyers, as fewer consumers can qualify for higher priced homes,” said Eric Allen, Director of Metrostudy’s Utah/Idaho region. “The median price for a new home in Ada County is $275,000, up 20% over last year and 8.5% above last quarter. The median price in Canyon County has increased 18% over last year to $177,600 and up 2% from last quarter. Less product is being produced at the lower price points and this will continue to squeeze lower income buyers.”
As of June, there is a six month supply of new single family detached homes in the Treasure Valley market, up from 5.8 months recorded at this time last year, and from 5.3 months last quarter. Inventory for homes under construction declined 1% compared to last year at this time, and is nearly unchanged from last quarter. This total translates to a 3.3 month supply, down from 3.6 months in 2Q13. There are 594 finished vacant homes on the ground, a 29% increase from 2Q13. Despite the increase, the supply remains healthy at 2.4 months, up from 2.0 months in 2Q13. So far, closings have kept pace with the market, resulting in a healthy level of finished vacant homes, however it will be imperative to monitor as we push into the second half of the year.
There is a 12.9 month supply attached homes on the ground. Of this, under construction inventory represents a 7.0 month supply, along with a 5.5 month supply of finished vacant units. Ada County currently has a 6.2 month supply of new detached inventory on the ground, up from 5.3 months last quarter. Currently there is a 2.4 month supply of finished and vacant homes on the ground, which, and a 3.5 month supply of under construction inventory. Canyon County has a 5.5 month supply of new home inventory. Under construction inventory sits at 2.9 months, and finished vacant inventory represents a 2.4 month supply.
Inventory of vacant developed lots (VDL), for both attached and detached homes in Ada Count is down -.2% from last year, and -4% from last quarter. Lot supply now sits at 22.9 months, down from 23.1 at this time last year. Vacant developed lot inventory in Canyon County is down -14% from last year. Based on the current pace of absorption, there is a 52.9 month supply, which is down from 69.2 months recorded in 2Q13. There have been 2,618 new lots delivered over the past year, while builders have absorbed 3,239, for a net decrease of -621 lots.
The Boise/Treasure Valley housing market has enjoyed a strong recovery and rapid growth over the past couple years, which is partly due to the growing economy. While the housing market may not be expanding at the same pace as last year, momentum is expected to continue. The fundamentals of the economy remain strong, which will help keep housing moving forward.