With the fundamentals falling firmly in place, the trend remains positive as the Treasure Valley market is expected to gain momentum through the second half of the year. This is according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.
As of the end of June, there have been approximately 9,100 new jobs created over the past twelve months within the Boise MSA. Based on the most recent numbers released from the Bureau of Labor Statistics (BLS), there are currently 275,200 people employed in the Treasure Valley market. The unemployment rate increased slightly in June to 6.2%, which is down from 7.3% recorded last year at this time, and well below the peak of 9.9% in January of 2011. “The local economy was experiencing stronger growth during 2012, and while job creation has slowed in some sectors this year, all but one remains positive,” said Eric Allen, Regional Director of Metrostudy’s Utah/Idaho Region.
According to Metrostudy’s quarterly survey of all new home projects in the Treasure Valley market, there were 1,061 new homes started (both attached and detached) during 2Q13. This is a +69% increase over 2Q12, and +45% above last quarter. “As we enter the “high start” season, and contend with low levels of new and resale home inventory, it is no surprise that production continues to ramp up,” said Allen. Builders have started 3,144 homes in the past twelve months, which is an increase of +66%, compared to the annual pace last year at this time. Year to date starts have already surpassed the first half of 2012 by 696 homes, or +63%. New home closings totaled 910 during the second quarter, which is +95% higher than 2Q12. Annual new home closings have increased +90% compared to last year at this time, for a total of 2,975. There were 759 new home closings during 2Q13, up +90% compared to last year at this time, and annual new home closings increased +75% from last year’s pace to 2,363.
As of June, the total new home inventory for detached homes totaled 1,341. While the total number of homes has increased +19%, the supply has dropped from a 9.4 month supply to 5.8 months. Under construction inventory is up +34% from last year and +15% from last quarter, however sits below equilibrium with a 3.6 month supply. Finished vacant inventory has decreased -1.7% from last year, however increased 41 homes from last quarter. Despite the slight increase from last quarter, the supply of finished vacant homes remains well below equilibrium at a 2.0 month supply. “Despite their efforts, builders are having a difficult time delivering finished homes to the market as their specs tend to get purchased during construction,” said Allen.
Inventory of vacant developed lots (VDL), for both attached and detached product in Ada County has declined for 11 consecutive quarters, which is a 23.7 month supply, down from 46.5 months at this time last year. Vacant developed lot inventory in Canyon County is down -9.6% from last year. Based on the current pace of absorption, this is a 69.8 month supply, which is down from 198.1 months recorded in 2Q12. “There have been 1,212 new lots delivered to the market over the past year, while builders have absorbed 3,144 in the same time-period. This signals that the oversupply of lots, particularly those in desirable areas is no longer a concern, with the focus now turned to delivering lots for future demand,” said Allen.
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