Did you miss BRR’s 2016 Mid-Year Housing Summit? Did you attend and loved what you heard? Here’s a recap of the event, with links to the presentations…
Jenny Hemly, Business Attraction Specialist with Idaho Commerce, discussed economic development trends and opportunities happening across the state. She shared this quote from Gov. Butch Otter, describing why companies are choosing to invest in Idaho: “Capital follows confidence.” Check out Jenny’s presentation to see why business owners are optimistic about growing their companies in Idaho:
Jenny also shared the “18 Summers” video campaign from Visit Idaho, which is perfect to share with out-of-state clients to give them a glimpse of what our state has to offer.
Next up, Breanna Vanstrom, BRR’s Chief Executive Officer, gave a mid-year market stats update. Despite the fact that our median sales price is now just 2% lower than the peak in July 2006, there isn’t a concern of a real estate bubble. The key message: “Home prices are rising because of consumer demand vs. supply — not speculation.” Affordability is something the association is tracking, but based on their research, prices are still relatively affordable compared to area incomes. Read more in her presentation:
The Summit capped off with a panel discussion featuring Steve Cox, Branch Manager with Fairway Independent Mortgage Corporation, Kelli Fairless, Executive Director of Valley Regional Transit (VRT), Lars Hansen, President of Brighton Homes, and Breanna Vanstrom. Bob Van Allen, BRR Director and Designated Broker/CEO of Coldwell Banker Tomlinson Group, moderated the discussion, which focused on housing affordability and mortgage rates, transportation and community growth, new construction trends and development, and the changing needs of today’s home buyers and sellers.
- On making starter homes more affordable, Lars Hansen talked about the need for buyers to adjust their expectations on amenities and product types. Think laminate instead of granite counter tops, or townhomes instead of single-family with acreage. Builders could offer product at lower price points if these items are considered “nice-to-have” instead of “must-have.”
- In response to a question about how student loan debt is affecting buyers, Steve Cox said that lenders must now consider deferred payments as part of a mortgage application. Regarding mortgage rates, he said the low rates we’ve been at now feel like the new standard for young buyers. Because they don’t have historical perspective, any uptick in rates feels like a major shift.
- Steve also talked about how it’s often the down payment that’s holding buyers back. Since many people are paying as much if not more in rent each month as they would for a mortgage payment, it’s up to lenders and REALTORS® to educate potential home buyers about financing options or down payment programs from groups like Idaho Housing and Finance Association (IHFA) to help people get into homes.
- When asked which cities Boise could look to as models for growth, Lars mentioned Salt Lake City, UT, Provo, UT, and Tallahassee, FL — but because Boise is so unique, there isn’t a direct comparison to any town. Instead, developers and policy makers must take the best ideas from a variety of metro areas and adapt them for our market, making them better where possible. He said there are still plenty of opportunities for new development throughout Meridian and Nampa, and potentially towards Hidden Springs.
- Kelli Fairless discussed the “Communities in Motion 2040 2.0 Plan” from the Community Planning Association of Southwest Idaho (COMPASS), which outlines the ideal growth scenario for transportation throughout Ada and Canyon Counties. The main hurdle in getting the funds necessary to execute the plan, she said, is for residents to convince state and local politicians to allow local option taxes. Fairless said that VRT hears from many residents who are willing to pay for these improvements through a local option tax because they know it will benefit them individually, as well as the entire community, over the long run. Based on the expected population growth for our region — potentially reaching 850,000 by 2020, or over 1 million soon after — if transportation plans like this aren’t implemented soon, we could see commute times rise dramatically. For example, Fairless said that VRT estimates the commute between Star and Boise to eventually take over an hour, and maybe more than 75 minutes to drive between Caldwell and Boise.
- When asked how to better educate Millennials about the value of home ownership, Lars pointed out that it is not so much about “educating” as it is “understanding.” For many Millennials, they saw their parents and grandparents lose their homes and life savings during the Great Recession, so home ownership to them seems like a risky proposition. The goal for REALTORS® and lenders is to instill confidence and answer questions about the process, showing them how to purchase a home responsibly. Doing so, he says, will help Millennials feel more comfortable with the loans they’re taking on and the assets they’re building for themselves.
- Steve talked about an uptick in improvement loans for those that want to stay in their homes longer, but he also mentioned that there’s been a resurgence of reverse mortgages as a financing vehicle. One thing, he says, that needs to come back into the lending space, is private capital to reduce the dependence on FHA, Freddie Mac, and Ginnie Mae.
- Breanna Vanstrom spoke to the trend of people staying in their homes longer, and what that means for REALTORS®: “Your follow-up strategies must extend from 3-5 years to maybe 5-8 years, maybe even 10 years. Because of this, the number of transactions you may do with one client over your lifetime may be cut by a third or in half — but you cannot afford to drop out of contact. Referrals from these past clients will be more important than ever.”
Finally, we want to thank Carey Farmer, BRR’s 2016 President and Associate Broker with Group One Sotheby’s International Realty, for opening and closing the event, Coldwell Banker Tomlinson Group for sponsoring, and the National Association of REALTORS® for being a grant partner.
Have questions about topics discussed at the Summit, the content of the presentations, or suggestions for future events like this? Please email Breanna Vanstrom at breanna@boirealtors.com. Thank you!
