How New Construction is Stabilizing or Devastating the Boise Housing Eco...





How New Construction is Stabilizing or Devastating the Boise Housing Economy


If you drive around the Boise area you definitely see a lot of building going on. A lot of home building can be GREAT and DEVASTATING for a local economy. Great because it feeds economies with jobs, and not just with construction jobs, think about all the materials that go into the home, the number of people and services that get involved with a new home, from building inspectors, realtors, bankers, insurance professionals, the list goes on.  


However, TOO MUCH new construction can be devastating to a local economy if it creates an oversupply of homes.


Watching the attached video you can see how new construction went out of control. From 2002 - 2006 the new construction market in the Boise area swelled up to account for over 30% of home sales (over 40% in 2006). This might be fine if a city is growing rapidly, but when it happens for many years in a row it eventually leads to an oversupply of homes and at that point it doesn’t matter how strong the local economy is. It’s Economics 101, oversupply leads to lower pricing. Once the housing market cools off then all those jobs and services fueling the economy begin to atrophy. We all remember what happened 10 years ago. It wasn’t a pretty picture.  


So the real question today is: Are we overbuilding the Boise market?


I answer this question in the video.


P.S. I focus on the Boise area market. The national and even regional housing markets are different stories. I’m watching the Boise market closely to see not if, but when the tide changes so I can alert my clients and friends. If you would like to subscribe to my newsletter GO HERE.


If you have questions about your home, about when to sell it or what you can do to maximize your sales price, contact me anytime at 208-340-8399 or mike@frontstreetbrokers.com.