After several years, the housing bust may have stabilized in the Wood River Valley, with foreclosure rates substantially decreasing and prices increasing in certain areas of the local housing market.
“We’re starting to see a stabilization of prices,” said Jed Gray, president of the Sun Valley Board of Realtors. “I believe we’ve reached a bottom and are slowly climbing out.”
Gray said prices in certain segments of the housing market are beginning to rise, including the high-end condominium market in Ketchum and Sun Valley. He said a home in Lake Creek recently sold for the highest price ever for a single-family home in Blaine County.
“That kind of situation can happen now,” Gray said, though he declined to disclose the selling price of the Lake Creek home.
Gray said people are still coming into his office looking for a recession deal, but that those deals are “shallower” than a year ago.
“The discount is less,” he said. “We’re even seeing multiple offers in Hailey and Bellevue over the asking prices.”
That could be a simple supply-and-demand phenomenon. Gray said 2007 and 2008 saw a housing glut in the valley, with 2,200 homes for sale, compared to about 1,100 before the housing bust. He said the inventory is at about 1,350 today.
“We’re absorbing inventory,” he said.
Gray said the positive local trend follows a national trend that could mark a steady turnaround in the housing market. Yet Gray said the Wood River Valley usually lags behind national housing market trends because homes sales here, especially in the mid- to high-end segment, are “what people want, not necessarily what they need,” and therefore based more on discretion than necessity.
RealtyTrac, a leading consolidator of national foreclosure statistics, reported 180,817 new foreclosures in the U.S. in November, down from 186,455 in October, a decrease of about 3 percent. The website reported 75,067 sales of foreclosed homes in October, up from 73,357 sales in September, an increase of 2.3 percent.
These statistics could point to a decrease in the so-called “shadow inventory” of bank-owned properties in the U.S. that will eventually come onto the market. RealtyTrac reported this week that 124 bank-owned properties exist in Blaine County.
Gray said the local shadow inventory is larger this time of year because local real estate agents typically do more sales in summer, especially of single-family homes.
“Historically, condos have sold better in the winter,” he said.
Local real estate agent Debra Hall has specialized in short sales over the past few years, negotiating directly with lenders to get distressed sellers out from under mortgages before foreclosures occur. She said the process has become easier over the past year.
“Lenders are pushing for short sales, rather than foreclosures, because there is less liability for the banks when the actual owners are involved,” she said. “Banks are beginning to bundle and sell properties to investment pools. I’ve had calls from three such investment companies in California. Investors are perfect buyers for short sales. You can plunk down $100,000 on a property and get $700 month return [if it is rented]. That’s better than you’re going to get anywhere else.”
Hall said the multiple listing service this week reported 339 active listings for single-family homes. Of those, 35 are poised for short sales and 22 are bank-owned foreclosure sales.
Hall said 359 single-family homes sold in Blaine County in 2012. She said 162 were “distressed sales; 60 sold as short sales, an average rate of five per month, and 101 sold during foreclosure sales.
“Sales for anything under $200,000 are improving,” she said. “In September and October, everything was snatched up. There were only 17 listings in Hailey, with 14 under contract. A year ago there would have been three under contract.”
Historically low interest rates have provided good incentives for first-time home buyers to purchase, and a strong refinance market for those who qualify.
“People who could not afford prices at 2005 levels, if they have a steady job, it’s a good time to buy,” Gray said. “Prices are up to 50 percent down from 2005.”
If national trends continue, such home purchases could prove to be good investments.
Lender Processing Services, a compiler of housing sales data, reported that the average home price rose from $196,000 in January 2012 to $206,000 in October.
Tony Evans: email@example.com