Pocket neighborhoods provide an affordable alternative to rising home costs
Looking for a new Treasure Valley house priced under $200,000? They’re an endangered species. Commercial builders have stopped building them in Boise, Meridian and Eagle. Amid rising values and tight inventories, the best opportunities lie in Nampa or Caldwell.
But even there the market is tight. A list of available new homes one day in early April showed only one available in that price range, a three-bedroom, two-bath house with 1,541 square feet under construction at 805 Eastman Lane in Caldwell and listed for $200,000.
There were 31 pending sales of new homes where the asking price was less than $200,000. All but nine were in Caldwell. Nearly all were for homes snapped up while the homes were (and in some cases still are) under construction.
The disappearance of $200,000 homes has several causes, says Corey Barton, owner of CBH Homes, which builds more than 1,000 homes a year.
“Land has become very expensive,” Barton says, with values in Boise increasing by more than 50 percent in the past five years.
“It takes longer and it’s harder to get approvals, so that adds to the cost to have a lot developed. Unfortunately — and we’re constantly looking for value for our home buyers — we’ve had some cost increases [in materials and labor] that we’ve had to add to the price of a home.”
Few used homes offered for sale
After the Great Recession of 2008, homes in the Treasure Valley were undervalued, Barton says. Values have increased over the past few years with the improving economy, and he says house prices now more accurately reflect what they’re worth.
Short supply and strongdemand have also pushed home prices higher. Homeowners are still staying in their homes longer than they did before the recession, so fewer used homes come on the market.
In February, the housing inventory in Ada County was big enough to last just 1.8 months at the current pace of sales. In Canyon County, it was 2.1 months. Agents say a balanced market, where neither buyers nor sellers are favored, typically has four to six months of supply.
In March, the median price of an Ada County house — including new homes and used ones — topped $300,000 in Ada County for the first time. In Canyon County, it topped $200,000. Both prices were record highs. The medians for new houses were $346,000 in Ada and $245,000 in Canyon.
The local population has continued to grow, increasing the pressure for housing. Boise’s population now surpasses 225,000. Ada County has more than 460,000 people and Canyon County has 220,000. A housing study by the city of Boise city predicted the city will need 1,000 new housing units per year over the next decade.
‘The profit isn’t in the small homes’
“There’s a huge demand that we feel will continue,” says Thomas Coleman Jr., president of Coleman Homes of Meridian. “That’s something that’s kind of a national trend right now. There’s just an under-supply of homes. ... We’re keeping up with it as best we can.”
Coleman Homes builds houses in Meridian, Kuna, Eagle, Nampa and Middleton. Last year it sold 350 homes. Coleman expects to sell slightly more this year.
Most of its homes are presold and built to the buyer’s specifications. The average home sells in the mid-$300,000 range, but the company offers homes for first-time buyers starting at about $225,000.
“It’s hard to offer a house for around $200,000,” he says. “We are still doing that, but it’s definitely more frequent in markets where the land is less expensive, like Canyon County or Kuna.”
Cindy Woyak, owner of Boise-based Woyak and Company Realty, says few builders can still make money selling homes for less than $200,000.
“Builders don’t want to build entry-level homes,” she says. “We’re running out. The profit isn’t in the small homes. It’s in the mid- to upper ranges.”
Homes under $200k bought before they’re built
Besides the Caldwell home under construction on Eastman Lane, the only new properties listed for $200,000 or less on one early April day were two townhouses under construction in Nampa. They were listed for less than $190,000.
Among the already snapped-up homes in Caldwell, several are on Voyage Avenue north of Franklin Road and on Concourse Avenue, one block east. They’re being built by Hayden Homes, a Redmond, Oregon, builder. Their listing prices were between $155,110 and $194,075. All have three bedrooms and two bathrooms, with between 1,148 and 1,574 square feet.
Hayden also has several homes under construction on Dynasty Way, off of Indiana Avenue in Caldwell.
Used market prospects not much better
You can try the used-home market. Your chances are better there, but not much.
A few used homes, condominiums and townhouses in Boise have been listed recently for less than $200,000. They tend to sell quickly, even if they have problems.
If you can handle prices up to a quarter-million dollars, your choices begin to expand, especially in Canyon County.
Eighty-one homes were listed on the multiple-listing service serving Ada and Canyon counties one early April day for between $209,846 and $249,336. Most were in Nampa and Caldwell.
Last year, many first-time buyers in the Treasure Valley were paying $180,000, says Tamara Rowe, an agent with Silvercreek Realty Group in Boise. This year, it’s much higher.
“Anything under $200,000 is gold,” Rowe says. “You have people fighting over them. Anything under $300,000 is an easy sell.”
Woyak, the real-estate broker, says she has clients looking for small homes in Boise without success as they get squeezed by rising rents.
“They’re going to be perpetual renters, because they have nowhere to go,” she says.
NeighborWorks, others still have some low-cost options
A few new but small and nontraditional houses have been popping up in and near Boise for less than $200,000.
A company called IndieDwell is converting steel shipping containers to homes; it plans to sell two-bedroom, one-bath, 640-square-foot houses for $65,000 excluding installation costs.
Factory-built homes are an option too; one first-time Boise developer installed four, 600-to-700-square-foot modular houses on a lot in Boise last year for $145,000 to $165,000 each.
One Boise nonprofit is building for the affordable-housing market, though its efforts are too small to solve the problem, and the houses it offers are small.
NeighborWorks Boise has completed a pocket neighborhood on Adams Street in Garden City and is beginning work nearby on a second one at 301 E. 40th St. Two two-bedroom homes there, each with 678 square feet, are listed for $184,000 each. They are part of the 15-unit 40th Street Cottages.
The price is more than $270 per square foot. Zillow lists the Boise median for all homes at $168 per square foot as of Feb. 28.
Three other homes under construction there sold last month, about a week after they were listed for sale. Foundations have been laid for all of those.Theywill be finished and ready for families to move in later this year.
NeighborWorks Boise is part of a congressionally chartered corporation that receives federal funding. It also obtains private grants, such as a $205,000 gift from Wells Fargo bank for the 40th Street Cottages. Wells Fargo has a program that helps rebuild and improve local neighborhoods and increase access to affordable homes.
NeighborWorks Boise previously built a pocket neighborhood in Boise’s Vista Avenue neighborhood.
South Boise project to help housing crunch
Some big builders still plan to keep serving first-time homebuyers — just not those who can afford only the lower prices of the recent past.
CBH, for example, expects to begin work this year on Syringa Valleysouthwest of the Boise Airport. The development eventually will include 2,000 homes, schools, a Boise city park and a commercial corridor.
The first homes are expected to be ready next spring.
Barton says the homes will be priced somewhere in the $200,000s. Construction will take several years.
“We expect to be out there for a decade,” he says.