Wednesday, October 1, 2014

Real estate market drops once more

Distressed sales no longer an investment opportunity

Express Staff Writer

Some real estate experts in the Wood River Valley think many buyers are looking for newly built housing units. Photo by Roland Lane

The real estate market in the Wood River Valley failed to perform this summer as many thought it might, after several years of recession. Yet some sales of new high-end homes in Sun Valley, and a decrease in the number of distressed sales in the south valley, give those in the business reasons for hope.
    “The market is not very good compared to last year,” said Robin Christensen, president of the Sun Valley Board of Realtors. “They said interest rates would go up and they did not. Last year, the [Beaver Creek] fire stopped our momentum. The good news is that the cost per square foot is up, and the total dollar volume is up in some market areas. There is confidence in the second-home market, and that bodes well for the future.”
    Nathan Fierman, chair of the Sun Valley Board of Realtors statistics committee, said that from Jan. 1 through the end of August, the total number of homes sold decreased by 26 percent.
    “What dragged unit sales down was the south valley,” said Fierman. “This is primarily due to the reduction in bank-owned and short sales. Prices also went up there, which reduced the number of buyers.  Also, lending got tighter for this group of buyers and many people have left the area.”
    According to Fierman’s data, 82 housing units were sold in Hailey this year, compared to 133 in 2013. The median sales price increased from $181,250 to $243,000, probably due to the disappearance of distressed sellers. Bellevue saw a reduction in homes sold, from 45 last year to 21 in 2014, with a decrease in the median sales price from $250,000 to $176,950.
    “Hailey and Bellevue have suffered the greatest declines since last year,” said Fierman. “Some of that is due to a lack of inventory, but most of that is because there are less distressed properties.”
    Christensen said investors bought many of the distressed homes after the recession struck, and are waiting for the market to improve.
    “We know who we represent, whether they are first-time homebuyers, those living in their homes or second-home buyers,” she said. “We know that investors were picking up distressed properties and renting them out, maybe selling them in five years. That is a lot of what was happening in Woodside subdivision. Once the investors stopped coming into our market, we knew the market was improving.”
    The mid-valley market fared better, with 32 homes sold this year, compared to 33 last year. The median sales price increased from $614,000 to $1.06 million.
    The resort areas of Sun Valley, Ketchum, Warm Springs and Elkhorn saw a drop in sales, from 167 last year to 145 in 2014, and a slight increase in median sales price, from $488,750 to $537,500.
    Fierman’s statistics include the sales in 2013 and 2014 of Sun Valley’s new White Clouds development.  Beginning in 2012 to this year, 12 townhomes were sold there, totaling $23 million.
    “They also have five units under contract in Diamondback, their next phase,” Fierman said. “Clearly, new is important to buyers. In the resort area, a lot of our inventory is older. This has affected sales, particularly condos and townhomes. It seems that people want new.”
    Fierman said he is hopeful that new construction will remedy the situation. Christensen is, too.
    “We used to have confidence as realtors that this year would be better than last year, but it was not,” Christensen said. “I get paid to be optimistic and pride myself on being optimistic for the future. Finishing off the year we could see very different numbers.”

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