NID crazy nutso RE prices continue (Boise, Coeur d'Alene: for sale, real estate, house prices)

[elousv]

We bought our house for $100/sq.ft. 3 years ago. Zillow now has it at $163/sq.ft., Kootenai county has it at $145/sq.ft. Real world example: We noticed a for sale sign last week in our hood. A few days later DW comes home and says there are a bunch of cars there, like it was an open house. Today she tells me one of her friend's daughter was looking at it and it already sold. Now get this, the asking price was $226/sq.ft., it is now posted as pending at a whopping $273/sq.ft., $575,000. I noticed it had 3000 views in 5 days on the site. This is regular neighborhood with 27 year old houses that need a lot of upgrades. My house has extensive upgrades inside and out and a sizable shop so extrapolating those kind of numbers/sq., we would be looking at just over a MIL.

[oldafretired]

Yeah, the big problem with this craziness is the property tax. I'm sure Kootenai County is just raring to happily raise the rates big time. If you aren't planning to sell (and I'm definitely not) it's very bad news.

[banjomike]

There's always 2 sides to a real estate boom.
Folks like elousv, who have no plans to sell their home, will always get nicked but the rising property taxes, but there's always someone else like my next door neighbor.

He bought the house next door in 2006 or 2007 at a time when home prices hadn't changed much for a long time and sales were stable and predictable.

Everything was fine for him and his family until 2 years ago, when a long bout of ill health changed everything. He was off his job for months at a time when he was coming close to retirement, and once he was able to return to work, he had trouble doing it that he never had before.

He never said much to me about it, so I don't know any details, but he decided to retire early late last year, and wasn't all that happy with that decision. He just sold his house, and only a few days ago, finished moving out. He's not leaving this area, I'm sure, as his extended family has been here a very long time, and all his grown kids are still here.

I won't ever know why, but I'm pretty sure he simply took advantage of the price spike here and solved some financial problems. Newly retired, that was a beneficial thing for him to do.
Since most of that money will go into a new home for him and his family, it was beneficial for someone else too. It was good for the city, as the money is staying here and moving around.

The new owner of the house next door will be paying higher property taxes on it than he paid, but he will be paying higher taxes on his new place too.

Since the city has one more new citizen, the property taxes won't be rising for any of us as much as they would if the newbie had not decided to move to Idaho.

Property taxes are ones a taxpayer can see. If the city is using them well, and all the city services are being well met, it's money well spent for all. If not, then taxpayers can change that easier at the city level than at any other in the next election.

If a city is growing soundly, new folks who just moved in are finding new jobs that were created by the growth. Growth means life may cost a bit more for everyone, but when its well managed, the costs to each resident are smaller than the benefits they get from the growth.

Its only when the growth gets out of hand or wasn't adequately planned for that causes trouble.

But I've seen stagnation, where a city quits growing and slowly begins to die cause much more trouble than growth.When more folks leave than come, things like property taxes can really get bad.

[nm9stheham]

Just keep an eye on the taxes. I would not be surprised if they rose none or slightly. Folks often don't understand that the municipality collects what is needed to run the city/county budget, and taxes get determined by that, not by property values. How it will actually play out depends on things not related to property values.

The property tax collections is just the total property valuation times the rate. If all the house values doubled one year to the next, and the city needed to collect the same amount as last year, then the tax rate would drop in half and the total tax would remain the same. Your individual home assessment only serves to adjust your tax contribution relative to everyone else's.

In Idaho, sale prices of homes do not have to be revealed to the gov't. So even if the market house sale price was way high for one house, the assessed value may not change at all relative to the neighboring houses. BTW, property has to be re-assessed each year in ID, by state statute. Additionally, municipalities will sometimes adjust residential property tax rates and commercial property tax rates relative to each other to each other.

If you property taxes go up, then it not because of changes in property values but more needs for money for gov't programs, gov't building and other construction, maintenance, schools, salaries and benefits of employees, mandated federal or state programs, and so forth.

And as BJM, notes, the worst is when a locale stagnates economically. The local municipal budget does not go down, and may increase to pay for increased welfare and so forth, and commercial tax revenues fall. That is the double-whammy, taxwise, that you don't want to see. Places like Portland and NYC are going to have some real financial problems in the future if things continue as they are. NY state is already stepping in to take control of the growing NYC financial deficits (like they have done in the past.)

[elousv]

Our tax bill went up $1254 from 2018-19 and dropped $496 this year.

[2011KTM530]

I have a buddy that sold out and left Idaho. He said Californians bought his place for a crazy price compared to what he bought it for just 10 years ago. He moved to the upper Midwest where prices are cheaper and he’s now debt free.

[pnwguy2]

While the economy may suffer in the next year or so, housing prices are almost immune to the downturn. While some coming from more expensive areas are contributing to higher prices in places like NID, the other major factor that is mostly not talked about is the major transition to working at home, prodded by the pandemic. I believe this is a true factor in the rise of housing prices.

[nm9stheham]

Here is an interesting map..... press the 'Map' button of you see a graph. Hover your mouse on each state and see the average statewide house price in each state compared to the 1980 price, expressed in % of the 1980 price. ID is now about mid-pack overall on average.

But the graph associated with this page shows that ID has indeed increased very suddenly in the last 7-8 years.

https://fred.stlouisfed.org/series/IDSTHPI


By comparison, MT had a steeper price increase in the time from around 1990 to the start of the recession than ID. So ID is catching up, in a way.

https://fred.stlouisfed.org/series/MTSTHPI

[volosong]

In today's Coeur d'Alene Press:

Titled, "Home values rising like crazy in southern Idaho, too"
Sub titled, "Boise home prices growing faster than any other top-100 U.S. metro area"

By John Sowell, The Idaho Statesman

Basically, house prices rising faster in Boise than anywhere else in the nation, in big cities. 16.4% this past year. Also led the nation last year with a 11.1% increase. No, it's not your imagination. One realtor expects it to keep going up in the Spring.

[banjomike]

Originally Posted by nm9stheham

Here is an interesting map..... press the 'Map' button of you see a graph. Hover your mouse on each state and see the average statewide house price in each state compared to the 1980 price, expressed in % of the 1980 price. ID is now about mid-pack overall on average.

But the graph associated with this page shows that ID has indeed increased very suddenly in the last 7-8 years.

https://fred.stlouisfed.org/series/IDSTHPI


By comparison, MT had a steeper price increase in the time from around 1990 to the start of the recession than ID. So ID is catching up, in a way.

https://fred.stlouisfed.org/series/MTSTHPI

The map sure was interesting!
I purchased a home in 1979, and another in 1990. That period was one when the prices were low and nearly flat, with very little increase from one decade to the next.

I purchased my present home in 2003. Part of a near-decade of flattened prices that had risen, beginning 1980, and then had leveled out after a couple of recessions.

That was my last purchase, and it came just before the prices began to escalate again, going upward into 2006 and then nose-diving in 2008.y

Somehow, I managed miss all the booms and busts that happened in Idaho for the past half-century. Every time I bought a house just happened to be in a period when the prices and market was temporarily stagnant.

It's making me feel very superstitious! This is the kind of stuff that makes me thing God is trying to talk to me, but I can never figure out what his message is.