Idaho #2 in National Home Price Gain

By
Real Estate Broker/Owner with Front Street Brokers
The swift decrease in foreclosures and shadow inventory across the nation are helping push home prices up after a half decade of persistent declines, and the balance of non-distressed sales vs distressed sales has improved to levels unseen since 2008 (nearly 5 years ago). The states with the sharpest declines of market foreclosures are also experiencing the strongest gains in home prices. Arizona and Idaho currently lead the nation in year over year home price increases. Both have experienced double digit gains from 2011. Taking a close look at the Boise, Idaho real estate market, one can see the grip of foreclosures is no longer dominating the sales of homes. In 2011, approximately half of all homes sold for the year were distressed sales. For 2012 the percentage of total sales that are distressed is now one quarter of all sales. Comparing the first 2 quarters of 2011 with the first 2 quarters of 2012, the Boise market saw a 41% decrease in the supply of distressed inventory, and a 42% decrease in the total number of distressed sales, which has had no small impact on area home prices. Boise metro home prices are up over 20% year to date. The fear of further setbacks in housing is greatly subdued since all the leading indicators that threaten home prices are diminishing. The rate of new delinquent and severely delinquent mortgages has been dropping steadily according to new data from CoreLogic. Even the chief economist for CoreLogic, Mark Fleming said, "Home prices are responding positively to reductions in both visible and shadow inventory over the past year. This trend is a bright spot because the decline in shadow inventory translates to fewer distressed sales, which helps sustain price appreciation." To see any further decreases in home prices the market would get many early warning signs, such as a swelling of new foreclosures on the market. Home sales don't have to increase for home prices to go up, which is good since we are still experiencing a sluggish economy. The low supply of homes and reduced pressure from foreclosures will allow the market to absorb the current supply of foreclosures and even seasonal slow downs. 2012 should prove to be the tipping point for housing, as the majority of housing markets begin their slow assent to modest appreciation patterns. And Boise, Idaho's market should continue to be one leading the charge.
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**Mike Turner is the Founder and CEO of Front Street Brokers, Host of the Boise Real Estate Radio Show, and Editor of the Boise Real Estate Newspaper.  Mike specializes in Luxury Home Sales in Idaho, and is widely known for his comprehensive knowledge of local market trends and opportunities.

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