BOISE-TREASURE VALLEY HOUSING 4Q18: Despite Affordability Concerns, 2018 Ends Strong – Production Booms in Attached Housing
- Quarterly new home starts are up 7% YoY; Quarterly closings are up 9% from 4Q17 levels
- Annual New Home Starts are up 14% from 2017 – Annual closings are up 19% in the same period.
- Annual starts during 2018 for Attached homes increased 69% compared to 2017 to 318, while closings decreased 16% to 183
- While the market share for new homes under $300,000 remains relatively high at 32%, it has decreased significantly compared to 2017 when 53% of all new home starts were under $300,000.
Since 2012, new home starts in the Boise/Treasure Valley market have increased an average of 25% year over year. The new home market continues to expand and is expected to remain stable through 2019. According to Metrostudy’s 4Q18 quarterly lot by lot survey of every subdivision, there were 1,361 new home starts during the quarter, up 7% from 4Q17, however down 14% from 3Q18. New home closings during the 4th quarter totaled 1,254, which is 9% above 4Q17 and 22% below last quarter. This decrease is a normal seasonal change and should not come as a surprise to the industry.
Annual new home starts for the market totaled 5,884, a 14% increase compared to 2017 and annual closings increased 19% for a total of 5,534. Annual starts for Detached homes totaled 5,566 during 2018, a 12% increase compared to last year, and new home closings increased 20% to 5,351. Annual starts during 2018 for Attached (for sale) homes increased 69% compared to 2017 to 318, while closings decreased 16% to 183. Ada County started 4,323 new homes during 2018, a 17% increase over 2017 and closings for the year totaled 3,989, an 18% increase. Annual starts in Canyon County increased 9% to 1,542, and closings were up 21% for a total of 1,526.
“Affordability continues to be high on the list of concerns for the local housing market,” said Eric Allen, Regional Director of Metrostudy’s Utah / Idaho market. “The Boise/Treasure Valley market continues to experience rapid growth in the housing market and local economy. While we may be faced with some headwinds on a national or global level during the next year, the market is expected to remain steady. Plan for a little more volatility over the next 12-18 months, however we don’t expect any major fallout.”
While the market share for new homes under $300,000 remains relatively high at 32%, it has decreased significantly compared to 2017 when 53% of all new home starts were under $300,000. Demand remains high in this lower price segment; therefore, builders will need to find ways to produce this product in order to keep up the current starts pace. However, with increased city regulation, material prices and labor costs, this will be a difficult task. The median price for a new home in Ada County is currently $361,800, which is 7% higher than 2017 and 1% above last quarter. The median price for a new home in Canyon County has increased 13% compared to 2017 and up 3% from last quarter to $246,800.
Total new home inventory in the Boise/Treasure Valley market has increased 13% compared to this time last year, however remains well within equilibrium at 6.7 months, or 3,068 homes (equilibrium is measured at 6-9 months). New home inventory in Ada County has increased 16% compared to last year to 2,394 and is a 7.2 month supply. Of this, 1,692 homes are currently under construction, which is a 5.1 month supply, down from 5.6 in 4Q17. Finished Vacant inventory has increased 60% since last year to 640, however the supply is well below equilibrium at 1.9 months, up from 1.4 in 4Q17. New home inventory in Canyon County has increased 3% since last year to 669 and is a 5.3 month supply. Under construction inventory decreased 1% from 4Q17 and down 4% from last quarter to 460. This is currently a 3.6 months supply, down from 4.4 months in 4Q17. Finished vacant inventory grew 15% over the past year to 203 homes, however the month supply remains very low at 1.6.
Annual lot deliveries in the Boise/Treasure Valley market throughout 2018 increased 29% above 2017 to 6,381, the largest number of lots since 2006. Despite the large increase, vacant developed lot inventory remains below equilibrium at 14.0 months (equilibrium is measured at 18-24 months). There are currently 6,863 vacant lots on the ground which is up 8% from this time last year.
For information contact:
Eric Allen – 801-571-7700 x424
About Metrostudy: Metrostudy is the leading provider of primary and secondary market information to the housing and related industries nationwide. Metrostudy provides research, data, analytics and consulting services to help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day. For more information, visit www.metrostudy.com
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