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ADA COUNTY Presented by: Dave Yorgason, MBA, CLC Building - - PowerPoint PPT Presentation

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LOCAL HOUSING MARKET & ECONOMIC IMPACT REPORT ADA COUNTY Presented by: Dave Yorgason, MBA, CLC Building Contractors Association of Southwestern Idaho January 30, 2019 Boise, ID Introduction & Welcome Topics: 1. 2018 Local Housing

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Presented by: Dave Yorgason, MBA, CLC Building Contractors Association of Southwestern Idaho January 30, 2019 Boise, ID

LOCAL HOUSING MARKET & ECONOMIC IMPACT REPORT ADA COUNTY

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Introduction & Welcome

Topics:

  • 1. 2018 Local Housing Report & 2019 Forecast
  • 2. Economic Impact of Local Home Building
  • 3. Local Government Issues Addressed by BCA

and Savings

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Local Housing Report

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Webb Charts - A Subscription Service Jere Webb Publishing Data compiled from Intermountain MLS

5892 6098 6761 6726 7565 8991 12208 10370 6839 5154 5683 6172 6498 7115 8124 7963 9553 11048 11263 11559

2000 4000 6000 8000 10000 12000 14000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

A1 - Ada County Yearly Sales HISTORY

Total Single Family Home Sales

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Webb Charts - A Subscription Service Jere Webb Publishing Data compiled from Intermountain MLS

2210 2609 3125 4900 3815 1877 1366 1190 986 878 1433 1674 1552 1778 2596 2774 3279 4678 5265 5998 7349 6538 5131 3873 4493 5186 5620 5682 6450 6411 7775 8452 8489 8280 5892 6098 6761 6726 7565 8991 12208 10370 6839 5154 5683 6172 6498 7115 8124 7963 9553 11048 11263 11559

2000 4000 6000 8000 10000 12000 14000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

A1A - Ada County Yearly Sales HISTORY

New Construction Sales Existing Sales Total Single Family Home Sales

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Webb Charts - A Subscription Service Jere Webb Publishing Data compiled from Intermountain MLS

$242,450 $259,278 $251,200 $253,000 $261,103 $273,900 $270,459 $279,110 $275,000 $270,000 $269,650 $277,977 $279,900 $298,450 $306,546 $297,000 $305,000 $324,295 $316,500 $333,900 $318,600 $321,398 $324,250 $324,900 15% 22% 17% 17% 18% 20% 16% 19% 20% 15% 15% 18% 19% 18% 17% 17% 18% 17% 17% 17% 18%

0% 5% 10% 15% 20% 25% 30% 35% 40% $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec % Change Median Sales $

A10 - Ada County Monthly MEDIAN Sales Price

2017 Median Sales $ 2018 Median Sales $ Monthly Change % YtoY YtoD Cumulative Change % YtoY

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Webb Charts - A Subscription Service Jere Webb Publishing Data compiled from Intermountain MLS

$311,190 $340,000 $311,751 $320,768 $317,990 $345,000 $334,900 $353,825 $350,000 $354,900 $339,500 $356,299 $365,752 $362,000 $344,535 $375,546 $349,713 $392,526 $379,900 $388,235 $357,500 $376,000 $387,780 $403,272 18% 6% 17% 10% 14% 13% 6% 2% 6% 14% 13% 11% 11% 12% 11% 11% 11% 11% 10% 10% 11% 11%

0% 5% 10% 15% 20% 25% 30% 35% 40% $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec % Change Median Sales $

A11 - Ada County NEW CONSTRUCTION Monthly MEDIAN Sales Price

2017 Median Sales $ 2018 Median Sales $ Monthly Change % YtoY YtoD Cumulative Change % YtoY

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500 1000 1500 2000 2500 3000 3500 4000 4500 5000 2012 2013 2014 2015 2016 2017 2018

Ada County Permits

Single Family Permits Mulit-Family Permits

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200 400 600 800 1000 1200 1400 1600 1800 2000 2012 2013 2014 2015 2016 2017 2018

Single Family Permits

Boise Meridian Eagle Star Kuna Ada County Garden City

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200 400 600 800 1000 1200 1400 2012 2013 2014 2015 2016 2017 2018

Multi-Family Permits

Boise Meridian Eagle Star Kuna Ada County Garden City

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Webb Charts - A Subscription Service Jere Webb Publishing Data compiled from Intermountain MLS

4270 4424 4648 4882 4995 5077 5049 4878 4772 4573 4409 3948

1704 1759 1746 1904 2060 2118 2240 2189 2153 2015

1371 1406 1504 1705 1808 1967 1952 1937 2013 1897 1185 1178 1209 1279 1287 1463 1530 1659 1884 1817 1677 1506

1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

A16 - Ada County Residential INVENTORY

2008 2016 2017 2018

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Webb Charts - A Subscription Service Jere Webb Publishing Data compiled from Intermountain MLS

3005 3206 3405 3581 3770 3910 3920 3795 3706 3555 3430 3029 875 994 1034 1154 1274 1353 1495 1440 1378 1183 902 678 555 640 737 920 1052 1270 1228 1226 1199 1068 797 582

424 489 562 679 704 816 862 885 1005 889 700 503 300 800 1300 1800 2300 2800 3300 3800 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

A60 - Ada County RESALE INVENTORY

2008 2016 2017 2018

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Webb Charts - A Subscription Service Jere Webb Publishing Data compiled from Intermountain MLS

1265 1218 1243 1301 1225 1167 1129 1083 1066 1018 979 919

765 712 750 786 765 749 775 832 838 843

816 766 767 785 756 697 724 711 814 829 848 840 761 689 647 600 583 647 668 774 879 930 977 1003

500 600 700 800 900 1000 1100 1200 1300 1400 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

A59- Ada County NEW CONSTRUCTION INVENTORY

2008 2016 2017 2018

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R esale vs. New Construction Inventory

Ada County

2 0 1 7 / 2 0 1 8

200 400 600 800 1000 1200 424 489 562 679 704 816 862 885 1005 889 700 503 761 689 647 600 583 647 668 774 879 930 977 1003 Resale New Construction

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Webb Charts - A Subscription Service Jere Webb Publishing Data compiled from Intermountain MLS

3.8 4.2 3.5 3.0 2.8 2.6 2.4 2.6 2.9 2.8 2.8 2.5 2.7 3.3 2.5 2.2 2.1 1.9 2.0 2.1 2.1 2.1 2.0 1.8 2.0 2.6 2.2 2.0 1.9 1.8 1.7 1.7 1.8 1.9 1.8 1.6 1.5 1.9 1.6 1.5 1.2 1.2 1.3 1.5 1.8 1.9 1.8 1.9

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 2015 Jan Mar May Jul Sep Nov 2016 Jan Mar May Jul Sep Nov 2017 Jan Mar May Jul Sep Nov 2018 Jan Mar May Jul Sep Nov Months to Sell Present Inventory

A28 - Ada Odds Progression w 2 Month Rolling Sales Ave.

Ada Odds

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Webb Charts - A Subscription Service Jere Webb Publishing Data compiled from Intermountain MLS 1 1 3 2 3 4 9 1.4 1 2 2 2 3 7 1.6 1 2 3 4 5 6 7 8 9 10 $100-119,999 $120-159,999 $160-199,999 $200-249,999 $250-299,999 $300-399,999 $400-499,999 $500-699,999 $700-999,999 $1,000,000 + Total

Months to Sell Present Inventory

AC23 DECEMBER 2018 YTD SELLING ODDS

Ada YTD Odds Canyon YTD Odds

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Webb Charts - A Subscription Service Jere Webb Publishing Data compiled from Intermountain MLS

7.0 7.1 6.1 6.2 6.0 5.0 4.5 5.1 5.7 5.3 5.6 5.0 5.3 6.0 4.4 4.0 4.0 3.5 3.5 3.7 3.5 3.6 3.9 4.1 4.7 5.3 3.8 3.7 3.9 2.9 2.9 3.1 3.4 3.5 3.8 3.9 3.8 3.5 2.7 2.6 2.2 2.1 2.3 2.7 3.1 3.5 3.9 4.1

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 2015 Jan Mar May Jul Sep Nov 2016 Jan Mar May Jul Sep Nov 2017 Jan Mar May Jul Sep Nov 2018 Jan Mar May Jul Sep Nov Months to Sell Present Inventory

A30 - Ada Odds Progression New Construction w 2 Month Rolling Sales Ave.

Ada Odds

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Webb Charts - A Subscription Service Jere Webb Publishing Data compiled from Intermountain MLS

7.0 7.1 6.1 6.2 6.0 5.0 4.5 5.1 5.7 5.3 5.6 5.0 5.3 6.0 4.4 4.0 4.0 3.5 3.5 3.7 3.5 3.6 3.9 4.1 4.7 5.3 3.8 3.7 3.9 2.9 2.9 3.1 3.4 3.5 3.8 3.9 3.8 3.5 2.7 2.6 2.2 2.1 2.3 2.7 3.1 3.5 3.9 4.1

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 2015 Jan Mar May Jul Sep Nov 2016 Jan Mar May Jul Sep Nov 2017 Jan Mar May Jul Sep Nov 2018 Jan Mar May Jul Sep Nov Months to Sell Present Inventory

A30 - Ada Odds Progression New Construction w 2 Month Rolling Sales Ave.

Ada Odds

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Webb Charts - A Subscription Service Jere Webb Publishing Data compiled from Intermountain MLS 3 6 3 4 6 24 4 1 4 4 4 4 5 11 4 5 10 15 20 25 30 $120-159,999 $160-199,999 $200-249,999 $250-299,999 $300-399,999 $400-499,999 $500-699,999 $700-999,999 $1,000,000 + Total

Months to Sell Present Inventory

AC24 DECEMBER 2018 YTD SELLING ODDS New Construction

Ada YTD Odds Canyon YTD Odds

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Webb Charts - A Subscription Service Jere Webb Publishing Data compiled from Intermountain MLS

$268,770 $302,500 $301,770 $307,421 $306,741 $319,200 $309,283 $298,423 $285,987 $304,900 $288,666 $305,120 $313,748 $305,182 $282,500 $278,106 $297,150 $315,400 $285,927 $349,642 $328,308 $309,000 $334,164 $320,000 $286,125 $299,985 $296,000 $318,760 $316,450 $304,629 $314,900 $326,662 $317,325 $333,450 $311,837 $307,862 $311,190 $340,000 $311,751 $320,768 $317,990 $345,000 $334,900 $353,825 $350,000 $329,900 $339,500 $356,299 $365,752 $362,000 $344,535 $375,546 $349,713 $392,526 $379,900 $388,235 $357,500 $376,000 $387,780 $403,272

30% 29% 32% 30% 33% 32% 33%

0% 5% 10% 15% 20% 25% 30% 35% $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 % of Median Inc to buy Median priced home Single Month Median Sales $

A40 - Ada County NEW CONSTRUCTION AFFORDABILITY Index

Single Month Median Sales $ Affordability Index

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Webb Charts - A Subscription Service Jere Webb Publishing Data compiled from Intermountain MLS $100,000 $110,000 $120,000 $130,000 $140,000 $150,000 $160,000 $170,000 $180,000 $190,000 $200,000 $210,000 $220,000 $230,000 $240,000 $250,000 $260,000 $270,000 $280,000 $290,000

A57 - Ada County Market Correction - DECEMBER 2018

Yearly Existing Median Sales Price Equity Existing Median Sales Price 3.7% Appreciation Line - 2000 Base Year

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➢ Sales: UP (18+%) ➢ Price: UP (12%) ➢ Permits: UP (5.5%) ➢ Inventory: UP (19%) ➢ Distressed Inventory: VERY LOW ➢ Months Supply: FLAT (4.1) ➢ Affordability: DOWN

Local Housing Report

2018 New Construction Summary

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New Construction Forecast

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New Construction Forecast

✓ 2018 Prediction: More of the same (use caution)

✓Sales should be strong, but ✓Price gains not the same % increase as last year ✓“Later innings”

✓ 2018 Wild Cards:

✓ Inventories (Homes and Lots) … continue as a disciplined recovery? ✓ Interest Rates will rise …… how much? ✓ Inflation: Building Costs, Land & Lot Prices ✓ Labor shortages …. impacts inventory production and costs ✓ Commercial construction .... Will it is absorb more trades / labor? ✓ Government Regulations …. Local and National ✓ Trump Effect … Trade Wars, Tax Code, Gov’t Spending, Regulations, etc)

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New Construction Forecast

✓2019 Prediction:

✓ Strong Sales, and…. ✓ Price Resistance (Be Smart)

✓ Price gains not the same % increase as last year ✓ “Later innings”

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New Construction Forecast

✓ 2019 Prediction: Strong Sales and Price Resistance

✓ “Later innings”

✓ Wild Cards (KNOWN):

✓ Inventories (Homes and Lots) … continue as a disciplined recovery? ✓ Interest Rates will rise …… how much? ✓ Inflation: Building Costs, Land & Lot Prices ✓ Labor shortages …. impacts inventory production and costs ✓ Government Regulations - Local and National

✓ Wild Cards (BIG UNKNOWN):

✓ Trump Effect ??? – Trade Wars, Government Shutdowns, Trump vs. all

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More Trends & Impacts

✓ Millennials and Boomers will dominate market

✓ What do Millennials want? ✓ Boomers downsizing = Selling McMansions

✓ Price spread between New and Existing Homes

✓ Over 24% is better, but still concerning

✓ Fewer homes on the market is the new normal ✓ Price pressures in the most expensive markets ✓ Opposition to new housing will continue

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GUEST OPINIONS

Six ways to control Boise growth

  • now. First, stop the self-promotion.

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Recent quotes in the news….

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Recent quotes in the news….

Morgan Stanley CEO says ….. “it is ‘extremely negative’ if the government shutdown goes on much longer” “if it goes on for months of this year, it’s going to have an extremely damaging effect” on the economy.

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Recent quotes in the news….

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Recent quotes in the news….

–

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“ ” — Boise landed No. 8 on the list. “ ’ ” ’ ’ “ ’ ” ’ “ ’ ” “ ” “ ” ’ — ’

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R ealtor.com : B

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arket in 201 9

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NAHB Local Housing Economic Impact Study

for Ada County December 2018

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Phase II: The Construction Ripple Phase III: Ongoing Impacts

Phase I: Construction

Local Housing Economic Impact

Background

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Economic Direct Impact

2018 SF Residential Construction

Ada County 2018

# of SF Building Permits: 4,540 Median house price: $390,000 Permit/Impact fees: $13,500 Annual property taxes: $4,463

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’

Phase I: Direct and Indirect Impact of Construction Activity: Local Income Business Owners’ Income Local Wages and Salaries Local Taxes1 Local Jobs Supported $893,637,000 $303,294,100 $590,342,900 $77,297,500 12,894 ’

’

Economic Impact

2018 SF Residential Construction

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Economic Direct Impact

2018 SF Residential Construction

Total Taxes & Fees paid to local governments:

Total Permit & Impact Fees: $61,290,000 Property Taxes & Other Fees: $16,007,500

TOTAL $77,297,500

Note: Total Fees Paid = total permits x permit fees Property Taxes = ½ of total permits x home value x avg. levy

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Local Housing

Does Growth Pay For Itself?

“ ” expenses, capital investment, and interest on debt (Figure 3).

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Top Regulatory Issues Addressed by BCA in 2018

Top BCA issues in 2018

  • 1. State Building Codes

(Residential, Energy, etc.)

  • 2. ACHD Development Policies
  • 3. Meridian Building Dept.

(Plan Reviews, inspections)

  • 4. Builder Job Site Theft
  • Est. Savings / home

$7,000 $2,000 $750 $$$

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Current Local Regulatory Issues

  • 1. State Building Codes

2018 Residential, Energy, etc. ➢ Boise City uses different codes than other cities

  • 2. Legislative Issues:

➢ Contractor Registration vs. Licensing

  • 3. Positive Public Relations Outreach
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Top Regulatory Issues Estimated Savings in 2017 - 2018

$20,000 per home

... 10 homes = $200,000 ... 100 homes = $2,000,000

✓ For every $1,000 increase in home = 482 people priced

  • ut of the local housing market
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Dave Yorgason, MBA, CLC

Call: 208-850-1070 Email: dyorgason6@gmail.com

QUESTIONS?

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DATA SOURCES

LOCAL HOUSING REPORT – YEAR END 2018

  • Intermountain MLS, Webb Charts, National Association of Relators

NAHB LOCAL HOUSING ECONOMIC IMPACT – DEC. 2018

  • Building Costs & Sales Price: Local Builders, Developers & IMLS
  • Permits: Ada County and Cities
  • Local Gov’t Revenue (building permit, impact & connection fees,
  • prop. taxes, etc.): Ada County and City Building Depts & Ada

County Assessor

  • Local Government Costs (spending): U.S. Census Bureaus’ Census
  • f Governments (based on inputs from local agencies)
  • Economic Impacts: NAHB, U.S. Bureau of Economic Analysis,

U.S. Bureau of Labor Statistics & U.S. Census Bureaus’ Census of Governments (based on inputs from local agencies)

  • Jobs: Idaho Dept. of Labor & Idaho Dept. of Commerce