News

Actions

First time buyers strain under competition

Posted at 5:33 PM, May 03, 2016
and last updated 2016-05-03 19:33:10-04

The housing market in the Treasure Valley is recovering well since the 2009 recession however, high demand on entry-level homes is putting a strain on young buyers looking to get started.

29 year old Lance Green is your stereotypical first time home buyer. He has a stable job and is looking to invest, but it's been a struggle.

"I've been looking for a home now for over a year," he said.

Lance is looking in the most competitive sector of the real estate market -- homes under $160,000. He's seen several homes scooped out from underneath him.

"If I'm not on it that day, a lot of the houses are already gone or they’re in pending and then I don't get a shot at them."

Boise Regional Realtors’ board president Carey Farmer says homes in that price range are going very quickly. From her view, there’s a general scrum for cheaper houses.

"In the under $200,000 category, we're basically under a 2 month supply," she said.

A balanced market has a supply anywhere from 4-6 moths. It illustrates just how quickly starter homes are getting bought.

Two major factors contribute to the situation.

First, there is low supply. There are plenty of entry-level homes in Ada County, but they aren't going on the market. New construction homes in the county come with an average price tag of $300,000.

The other side is demand. That’s on the rise from a deluge of out of state residents.

"Outside of Boise, I think people are realizing what a great place this is to live and we have an influx of people that this lifestyle," said Farmer.

The result for people like Lance is often a bidding war. There, he says the advantage goes to buyers willing to lay down more cash.

"Because of the location in Boise and the demand, prices are up right now," he said.

With houses hitting the market and getting sold within the day Farmer says a prepared buyer has the edge.

"That just makes it more important to find a lender, to do all of your due diligence and make sure you are ready to go when you do find that home and can move quickly and make an offer," she said.

There is some hope for buyers looking in Canyon County. Competition there is still strong, but average home prices are roughly $80,000 cheaper.