STEVE INSKEEP, HOST:
The housing market is recovering in much of the country, not so much in Idaho. Home prices dropped by 46 percent in the Boise area during the financial crises. Forty-six percent. Today's business bottom line takes us to the home of a family that rode out the crash and are still waiting for better times. Here's Molly Messick of Boise State Public Radio.
MOLLY MESSICK, BYLINE: Charter Pointe is a sprawling master-planned subdivision in southwest Boise. County records show that in 2011, 90 percent of the houses that sold here were foreclosures or short sales.
On a recent visit, I saw block after block of traditional-looking homes. I drove with a list of addresses in hand. Six-five-four-seven Fairwind. I know this one went through some sort of foreclosure process. I'm just going to get out and take a look.
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MESSICK: I walked to the door of a two-story home with vinyl siding and a two-car garage. It doesn't look like anyone's living here now. Doorbell's broken.
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MESSICK: The house next door is also empty. A sign says it's for rent. Of the nine homes on this cul-de-sac, three are vacant.
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RYAN ARELLANO: Mom, is this clean?
TARA ARELLANO: Yep, that looks nice. OK, do the next one.
MESSICK: A few blocks away, I visit the Arellano family. That's Tara Arellano, washing dishes with her four-year-old son, Ryan. Their three kids are the main reason Tara and her husband, Scott, decided to move to this development in the first place.
SCOTT ARELLANO: We really had this vision of getting in at the grass roots level, the first houses on the block; other families similar to us with young, young kids that will grow up together and will just have this bond.
MESSICK: That was in early 2005. Tara still remembers their first visit.
T. ARELLANO: They had a brand new school being built and that was something I was really interested in, especially as we had two children at that time. They would be able to walk to school and I felt that it was going to be a really good sense of community.
MESSICK: For $188,000, they could get the smallest house on a street of big homes. They signed a traditional 30-year fixed-rate mortgage and moved in by the end of the year. They were filled with excitement and hope. Now, Scott feels something very different.
S. ARELLANO: As I come home from work, every single day, I think about it. I think about what a disappointment it's become.
MESSICK: Not long after they settled in, they noticed something. They say the neighborhood was pitched to them as a truly family-oriented place, full of owner-occupied homes. But it wasn't turning out to be that way. Instead, there were a lot of renters. Everything felt transient. There was a lot of turnover.
S. ARELLANO: I just have given up trying to keep track of who's who. It's sad because you don't want to live in a neighborhood like that. You want to know your neighbors.
MESSICK: He trails off. He watched as Charter Pointe became less a neighborhood of neighbors and more about investor-buyers looking to make money. In 2005, more than a third of the nearly 340 homes in this development were investor-owned. For the story of how that happened, I called...
SHAUN TRACY: Shaun Tracy, I am a ReMax real estate agent. Have been for 19 years.
MESSICK: Shaun Tracy started selling homes in Charter Pointe right around the time the Arellanos made their first visit. He says the prices were too good to pass up. Eventually, Tracy himself bought eight homes in the neighborhood.
TRACY: I knew how much I could rent these homes for. So I started telling investors about it.
MESSICK: He says the tipping point came not long after he sold two houses to a guy in San Diego.
TRACY: And then, suddenly, I started getting calls from people that were - now people from Florida were calling, Arizona. And they'd never even been to Boise, ever in their life.
MESSICK: In the end, some of the neighborhood's investors made money. Some lost homes to foreclosure after prices tanked. And then there are people like the Arellanos.
S. ARELLANO: We came in thinking conventionally. Like, we're going to actually live in our property. But I think so many people were thinking in terms of paper value.
MESSICK: Scott Arellano says perhaps he was naive. He and Tara had an idealized vision of what life in Charter Pointe would be like. Now, they're tied to an underwater mortgage. Yes, they could walk away. Yes, they could rent out their home as others have done. But they say neither feels like the right thing to do. They're sitting tight, even though they're long past hoping that Charter Pointe will become the neighborhood they wanted.
For NPR News, I'm Molly Messick in Boise.
INSKEEP: That story comes to us from State Impact, a collaboration between NPR and member stations examining how state issues and policies affects people's lives.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.