Idaho leads the West in cash home sales
Idaho is a haven for cash home buyers.
Idaho had the sixth-highest rate of cash home sales in the nation in January and the highest among the Western states, according to real estate data provider CoreLogic.
CoreLogic measured cash sales in Idaho at 46 percent of all home sales for January, trailing Florida at 56.3 percent, Alabama (54.7 percent), New York (48.2 percent), Indiana (47.4 percent) and Missouri (47 percent). The nationwide cash sale average started the year at 38.9 percent.
Idaho has been one of CoreLogic’s top 10 states in cash homes sales since November 2013 – frequently in the top 5 – and a top 15 state since April 2009. Idaho had the highest cash share among western states in 11 of the past 14 months, typically no lower than second or third in the West in the others, according to CoreLogic.
Local real estate leaders use different data and their conclusions often do not match up precisely with those of national real estate data aggregators like CoreLogic. That is the case with the cash sales numbers. Leaders at the Idaho Association of Realtors said cash sales probably make up about 30 percent of statewide home buying.
“We have seen a lot of cash buyers,” said Tracy Kasper, IAR’s president-elect and co-owner of Silverhawk Realty, based in Caldwell. “Starting in 2011, we’ve been seeing cash come into the market. Once they saw we were at the bottom (with home prices), we did see a lot of cash buyers.”
Cash buyers in Idaho essentially come in three flavors: retirees; people able to sell higher-priced homes elsewhere; and investors, said Tiffanie Mai-Ganske, IAR’s president and an agent at RE/MAX Country Real Estate in Pocatello.
Mai-Ganske said Idaho appeals to retirees because its housing is more affordable than that in much of the country. She added retirees like its quality of life, outdoor recreation and access to university classes.
Forbes magazine in 2014 placed Boise on its list of the top 25 best cities to retire, out of 400 cities. Forbes noted Boise’s bicycle-friendly environment, its walkability and its volunteering opportunities.
“They sell a 1,200- or 1,400-square-foot house for half a million in California,“ Mai-Ganske said. “In my market in Pocatello, that will get you 3,000 square feet, a three-car garage and a quarter acre.”
The retirees aren’t necessarily 65 or 70 years old.
“A lot are early retirees taking whatever retirement they have and living comfortably in Idaho, stretching their money two or three times farther than in other places,” Kasper said.
After the housing price collapse around 2007, home prices plummeted so that many homeowners in places like California couldn’t afford to sell their homes because they were worth less than what was owed on the property. But that has started to turn around, Mai-Ganske said.
“The gridlock has released,” Mai-Ganske said.
Californians, especially, have started streaming into Idaho with stacks of cash to buy homes.
And Idaho also sees plenty of investor buyers, which Mai-Ganske and Kasper said was good news for the housing markets.
“When investors are willing to re-enter the market, it’s a responsible increase in property values,” Mai-Ganske said. “We are not pricing people out of the market.”
Kasper added: “I think they are prudent buyers. They are not overpaying. They are not underpaying. It’s just a good mix of buyers not overwhelmed by one or the other.”
The Idaho Housing and Finance Association, a financial institution and affordable housing service provider, has a similar take on this wave of cash sales.
“Investors are much more careful in what they are doing ,” IHFA President Gerald Hunter said. “I think the market has changed a lot. Investors are more on the distressed (home) side or where they can get a bargain.”
Source: Idaho Business Review Teya Vitu