Tags: foreclosures

Foreclosure Ground Zero? Boise

By    |   Wednesday, 28 Oct 2009 09:38 AM

Boise, Idaho is a quiet part of the country that less than a quarter million people call home. But when it comes to housing trends, it may be leading the way for the rest of the United States.

The number of homes in foreclosure in Boise jumped more than 80 percent over the past year, according to RealtyTrac. That puts Boise among the top 20 cities in the country for foreclosure activity.

The city seemed to escape the worst of the housing bubble. Home prices had increased gradually over time but were affordably priced with a median value near $230,000 at the peak. The median family income is about $50,000, which meant housing was still affordable in Boise.

Now the median price of a home is near $170,000, after having fallen nearly 25 percent over the past year. And in a sign that sales activity is still slowing, every month this year, Zillow.com shows that more than a third of the homes listed for sale have seen a price reduction. On average, the listing price has been cut by more than 7 percent a month.

Economists have been warning that stubbornly high unemployment rates will be a problem for the housing market, but that is not the case in Boise. Unemployment is only at 7.5 percent, well below the national average.

The real problem may be that too many homes are available right now. Idaho saw a building boom just like many other areas in the country. State figures show that the number of houses increased 13.5 percent from 2004 to 2008 while the population increased by only 9 percent.

Oversupply won’t be fixed by tax credits or relaxed credit standards. That means it won’t be easy to solve this problem in Boise or anywhere in the country, and prices may need to continue falling until demand catches up to supply.

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Boise, Idaho is a quiet part of the country that less than a quarter million people call home. But when it comes to housing trends, it may be leading the way for the rest of the United States.The number of homes in foreclosure in Boise jumped more than 80 percent over the...
foreclosures
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2009-38-28
Wednesday, 28 Oct 2009 09:38 AM
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