Want to buy a home in Idaho Falls? Good luck.
Affordable homes are scarce, and they’re gone in a snap, local real estate agents say.
Idaho Falls is experiencing a housing shortage, due to a number of factors, including eastern Idaho’s ever-increasing population and home builders who can’t keep up with the demand for new houses, according to two real estate agents who spoke with the Post Register.
“The biggest challenge that we’ve got is the absolute shortage of inventory in our market,” said Patrick Malone, a real estate agent with Century 21 High Desert. “It started last year, where we were seeing a tightening, and it’s just gotten progressively more challenging.”
There are fewer than 200 residential listings in Bonneville County, as of Tuesday afternoon, according to the Snake River MLS. That’s for a population of nearly 117,000.
And the toughest listings to find are for houses priced at $150,000 and below, Malone said.
A balanced housing market has about six months of inventory, Malone said, but Bonneville County currently has about a two-month inventory. In some neighborhoods, the inventory is as low as one month.
The average time a home spent on the market in April was 31 days, according to the Snake River MLS. Last April it was 39 days. In April 2009 it was 124 days.
And the current list-to-sell ratio is close to 100 percent, Malone said.
Idaho is the fastest growing state in the country. Its population grew 2.1 percent in 2018, according to the U.S. Census Bureau. At the same time, unemployment is 2.9 percent, and there aren’t enough skilled workers to fill jobs, a problem that’s contributing to the housing shortage, Malone said.
Companies don’t have the workers to build homes fast enough to meet the demand of the growing population.
“The builders are building everything they possibly can, but they’re exasperated by a shortage of labor,” Malone said.
For homebuyers, that means there are fewer houses on the market to choose from, and the ones that are for sale become more competitive to bid on.
“Because of the shortage, when properties are on the market they’re seeing multiple offers in the first day or two,” Malone said. “It’s very competitive.”
The market is especially challenging for first-time homebuyers. Housing prices are going up, partially due to the high demand and low inventory.
According to the Federal Housing Finance Agency’s House Price Calculator, an Idaho home that was purchased for $200,000 in 2008 was worth $267,481 in the fourth quarter of 2018, about a 3 percent average annual increase.
The median selling price in Bonneville County in April was $205,450. Last year, it was $190,000 and in 2017 it was $168,500.
At the same time, wages in Bonneville County have remained comparatively stagnant, so housing costs have eaten up an increasing share of income.
According to Bureau of Economic Analysis data, provided by the Idaho Department of Labor, the average per capita personal income in Bonneville County increased 5 percent between 2007 and 2017.
From 2008 to 2018, the value of an Idaho home increased 34 percent.
Jennifer McCulloch, president of the Greater Idaho Falls Association of Realtors, said the combination of rising housing costs and stagnant wages is making it more difficult to find an affordable home.
“My largest concern is these first-time homebuyers are in a situation where there’s just not a lot of affordable housing for them,” McCulloch said. “For a small family ... they’re certainly limited.”
McCulloch’s clients, these days, are less concerned about location and are focusing more on price, she said.
But it’s not just first-time buyers; current homeowners who want to move are having troubles as well.
“It’s not just the first-time homebuyers that are being affected by this,” Malone said. “It’s a ripple effect that’s felt across the market.”
A homeowner who wants to downsize, for example, is going to have trouble staying in the market. Selling the house might be simple enough, but finding a new house, without being homeless in between, is difficult.
Meanwhile, rental vacancies are under 1 percent, Malone said.
“They’re kind of stuck,” he said.
So what’s the best strategy to buying a house in this market?
Early planning and being prepared to move quickly are key, McCulloch said. Early planning means “making sure they have all their ducks in a row in terms of financing,” and working with a good Realtor, she said.
A little bit of luck would help, as well.
That’s how Michael Barber, 32, and Amanda Poitevin, 31, a married couple in Idaho Falls, found their new house.
Barber, a computer software company executive and small business owner, and Poitevin, a middle school teacher, were renters, looking to buy a bigger house — they plan to have children and want a garden and freedom to make improvements to a house they own.
After thinking about buying a house for six months, then hunting seriously for a couple of months — and getting outbid on two houses — a for sale sign appeared five doors down from their rental in a historic neighborhood, east of downtown Idaho Falls.
The couple made an offer before the house was even listed.
“Amanda called me and said, ‘The sign is up, I want to go look at the house,’” Barber said. “We drive past that house every day on the way home. They put the sign out that morning and Amanda looked at it that evening, and we made an offer the next morning. We kind of got lucky.”
Barber and Poitevin knew what kind of market they were buying in.
“(Our Realtor) always made it very clear that we had to move fast,” Barber said. “You had to get in and make a decision the day of.”
The new house is the right size and shape that can be lived in long term and support their future family, Barber said, and it was the right price.
Maybe scoring the right house wasn’t so much luck as it was preparedness: They were financially prepared and had the patience to wait for the right one to come up.
“I think we did well,” Barber said. “We had both the financial wherewithal to do what we needed to do when the house came up, the loan in place, and we had the ability to wait. In some situations, people don’t have that.”
“Be patient,” he added. “You have to have a lot of patience in this market.”
Both Malone and McCulloch said the Idaho Falls housing shortage isn’t going away soon.
“I think this inventory shortage is going be with us for the next 12 to 18 months,” Malone said. “Unless the economy does something interesting that tempers demand, I think this inventory shortage is going to be with us for the foreseeable future.”