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Treasure Valley Real Estate: Covid-Competitive

TREASURE VALLEY REAL ESTATE:

COVID-COMPETITIVE

BY HEATHER HAMILTON-POST

With Covid-19 came a host of changes, from new restaurant rules to a drastically different approach to school to more Zoom meetings than we can count. As the economy showed signs of stress, many were left wondering what exactly would happen to the Treasure Valley real estate market, which had been extremely competitive in the months prior.

And, although Covid has certainly had an impact on our lives, the short answer is that the market is strong, the valley is growing, and the inventory is low.

“When we entered the pandemic, we were already in a status of really low inventory. Our market’s been pretty hot and active for the last four consistent years. Just to give you an idea, in February, the active listings in the Ada county area were just over 300 homes on the market. If you backtrack 12 months ago, we had over 900 homes on the market,” says 208 Market’s April Florczyk. “Entering into Covid, we had about a 45 day period where our phones slowed down while everybody took a break, wondering what was going to unfold from this pandemic. But if anything, people are now realizing how important it is to live in a home and have space,” she says. Florczyk adds that her clients consist of a lot of local folks buying bigger homes and people from out of state who want the Idaho quality of life. She calls it a perfect storm, and it’s easy to see why.

As Idahoans know, the Treasure Valley is a pretty great place, and visitors are quick to notice. Demetre Booker Jr., of ELEVATe Commercial, first visited in 2001 when he took a recruiting trip to Boise State University and liked the area. “Fast forward to 2018 and I was looking at areas to buy property and ending up finding a mobile home park in Nampa,” he says. Booker spent time exploring Boise and fell in love with both the quality of life and the price per square foot. He explains that Boise’s proximity to major cities, accessible airport, nice people, great weather, and lack of saturation make it an excellent place to invest. Clark Krause, Executive Director at Boise Valley Economic Partnership, confirms this--he says that last year was a record year when it came to bringing new companies into the Treasure Valley. He says that, when Covid hit, he’d have sworn things were going to slow down. “But that’s the opposite of what’s happened,” he says. Jobs once headquartered in San Francisco or Seattle have headed toward Idaho, and include industries like manufacturing, food and beverage, and logistics. And, while office jobs have stalled a bit, Krause says that others have more than made up for it. Where does this business happen? Often, in rentals located around the Treasure Valley. Scott Feighner, with Colliers International Idaho, recalls a relative shutdown in showing office space, which lasted from around March 12 until mid May. Many businesses were hesitant lease spaces with such uncertainty, although Feighner says that many soon figured out that they were “Covid-safe”--ecommerce, technology, and law firms, for example. Around June 1, things picked back up again. “In Salt Lake, they’re starting to see some pullbacks and shrinkage of office tenants. We haven’t seen that yet,” says Feighner, although he acknowledges that it may yet happen. And, in areas where tenants are struggling in Idaho and across the nation, Feighner says he’s seen people pull together to find solutions that are fair to both landlords and tenants. Commercial real estate is still active, though it has required investors like Booker to remain flexible. “It’s time for us to adapt as an industry,” he says, “and innovate and use outdoor space and be proactive about what’s on the horizon, providing technical assistance and helping tenants shift their business models.” Booker recently purchased a stripmall on Boise’s west bench because it reminded him of a San Diego neighborhood that has experienced renewed vibrancy. Although his initial goal was to launch a true gathering spot complete with coffee, culture, and food, Booker is now considering multifamily affordable housing. “We’re considering what will be the best use of the neighborhood,” he says, and he knows Boise is experiencing a shortage. Florczyk says that, if she had to say, she’d estimate that about 60 percent of her clients are relocating from out of state, although there is no shortage of local buyers. The fear is that, with such low inventory, potential sellers are hesitant to put their houses on the market, lest they be left homeless. “If you’re a buyer right now, you’re sometimes competing against eight to ten different buyers for one property, and there are a lot of cash buyers in our marketplace,” she says. She adds that new construction isn’t keeping pace either, since developers can’t build quickly enough--larger builders in the area are selling 100 homes a month right now on properties that aren’t even recorded yet. The solution, Florczyk says, is for cities to approve more high density housing, as Booker suggests. Florczyk emphasizes that first time home buyers aren’t without options though--trained agents have strategies to help everyone find their dream home. Krause notes that the Treasure Valley is rapidly growing (and has been for a while), but unlike 2010, people are building smart and banks are more cautious. Interest rates are low too, which means people are in a moving mindset. “People are stuck in their homes all day and realizing they’ve got to get out of the metro area and on a trail,” he says. “And people have the choice to work remotely now, so I think you’re going to see even more people looking at Boise. Hopefully our builders can keep up,” he says.

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