Valley County home prices fall; frustrate builders

If there’s one place where a declining housing market might be good news, it’s Valley County.

Real estate prices in small towns like Donnelly and Cascade shot up when Tamarack Resort was built and the cities made the abrupt transition from speck-on-a-map status to resort community. Some restaurant owners have said they have a hard time hiring and keeping workers because they can’t afford to live in the area.

Home prices have dropped by about $20,000 to $30,000 in recent months, said Carol Amburgy, the broker and owner of Idaho Mountain Properties.

That’s still not enough to serve all the people who need affordable homes in the area, Amburgy said. An average family making $50,000 can afford roughly $174,000 for a home, she said. There are currently 13 listings in Donnelly, Cascade and McCall between $150,000 and $175,000.

“Most of those are old fixer-uppers not on a foundation or they’re old trailers,” she said.
Nine of them have one bedroom.
But the price drop frustrates developers like Karl Bonar, who is developing a 65-acre, 128-lot project in Cascade called River Woods. Homes in River Woods will range from $150,000 to $500,000, Bonar said, but the low end of the range is required by the city of Cascade.
Cascade requires developers to build 15 percent of their projects as affordable housing that serves people who make 100 percent of median income for the area, according to Michael David, executive director of Valley Adams Regional Housing Authority. That means 15 percent of the homes they build must be priced from $150,000 to $170,000.
Bonar said he knows of eight affordable units that are sitting on the market.
“Nobody wants them,” he said. “The builders are sitting there paying for them…. Qualified families aren’t taking them.”
Falling home prices have put some market-rate homes in the same price range as the affordable homes developers have to build to meet city code, Bonar said. But city codes require prices of homes built to meet affordable housing requirements cannot appreciate more than 3 percent per year. Families who could qualify for the affordable homes would rather buy market rate housing if they can because they can sell it for more money, Bonar said.
There is a little bit of competition between some free market homes and other homes built to satisfy the affordable housing requirement, but only on the upper end of the affordable housing scale, said David of VARHA.
Some homes priced up to $250,000 have dropped to $200,000 to $210,000, David said. But that doesn’t take care of most middle-income people, he said.
“You have to make $70,000 to afford a $210,000 home.”
When prices rebound, there should be plenty of demand for affordable homes, David said.
Moreover, middle-income families are hurting more than ever because the lending environment has tightened, he said. Thanks to stricter mortgage requirements and the overall housing market, many people are hesitating to buy real estate at any price.
VARHA is focusing its greatest attention on building affordable apartments. The housing authority, the city of McCall and Neighborhood Housing Services are working together to build a 100-apartment complex within the next two years, he said.
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