Tuesday, July 1, 2014

Local Market Monitor offers lackluster forecast for Idaho Falls

A section from the May 31, 2014, report by Local Market Monitor.
Idaho Falls home prices are forecast to increase by 1 percent over the next 12 months, according to a report by Local Market Monitor, a company in Cary, N.C., that keeps track of fundamentals in 300 markets across the United States.

Over the next three years, prices are anticipated to go up 7 percent, said the company's latest report, dated May 31.

"Economic growth has been erratic since the recession. Growth was poor in the past year, with jobs weak in government, healthcare and the big retail sector. Expect erratic growth the next few years," the report said.

At the county level, the forecast was not any more robust. Bonneville County home prices were pegged to rise 0.7 percent in the coming year, 2.3 percent the next year and 4.2 percent the next. In Jefferson County, the forecast was for 1 percent growth, rising to 2.6 percent then 4.4 percent.
Nationally, prices are forecast to increase by 7.7 percent.

"There was a modest housing boom and bust, but home prices have been flat in recent years," the report said. "Rents are very low. Population growth has been average. Job growth and low unemployment will increase housing demand, but mainly for rentals. Expect a weak housing market the next few years. ... The market is currently underpriced, -12 percent relative to income."

At the heart of any healthy economy is job growth. "Jobs in the market have grown by 0.4 percent," the Local Market Monitor report said. "This compares to a national increase of 1.7 percent."
Population in the market grew 0.9 percent, compared to 0.7 percent for the United States. In 2012, population migration was -0.1 percent.

The report forecast rents in the Idaho Falls market to increase 11 percent over the next three years, to an average of $837 a month.

Total housing permits in April this year were down 9 percent from last year, and single family permits were down 14 percent.