Home prices in the Boise area continue to soar even with an increase in homes for sale popping up this Spring. The past few months have shown that the real estate market in the Boise Metro Area remains red hot, as home prices have gone up over $100K from last year and all signs point towards home prices continuing to increase through summer. Here’s a brief overview of where real estate stands as of April 1st, 2021.
Ada County saw an increase in price of 28% over last year to a record median price of $469,000 for all homes. The city of Boise also saw home prices continue to rise with the median price at $460,000, a 30% increase from the year before. Canyon County had the largest increase in home prices with a 40% increase from a year ago leaving the current median price at just over $380,000.
Multiple offers continue to be the norm in most areas around town which contribute to bidding wars and ultimately higher prices. In the City of Boise during the month of March 395 homes were sold of which 48% sold over the asking price, 41% at the asking price, and only 11% under the asking price. Homes priced correctly (Fair Market Value) tended to stay on the market for 3-4 days depending on the area.
Although March brought us more homes for sale on the market compared to the Winter months, we still have a dire inventory shortage. Home inventory refers to a hypothetical scenario in which no new homes become available for sale. If this happened, and buyers could only choose from the houses that are already on the market, “months of inventory” is how many months it would take to buy up every house on the market. A balanced market is six months of inventory. Boise Metro Area is down to less than two weeks of inventory, hence the main reason pricing continues to rise, supply and demand.
Will the Local Housing Market Crash?
An interesting article recently on CNBC said that one of the most popular questions on Google lately is, “When will the housing market crash?” Experts chime in to say that unlike the housing bubble from ten years ago we are seeing a very different market here, one that may cool, but not crash. There are a few reasons not to expect a housing crash here in the Boise Area:
Supply and Demand. The difference between today and the housing bubble we saw back in the mid-2000s is the drastic lack of inventory. As mentioned earlier in this article we are down to less than two weeks of inventory in the area. Neighboring states continue to flock to Idaho for various reasons along with many locals in need of a different home to accommodate changing circumstances driving the demand for housing. It’s also important to mention one of the largest generations, Millennials are now at the age to buy their first-home adding more buyers to the every-growing pool.
Mortgage Rates. The mortgage interest rates remain very low historically allowing buyers to be able to afford more homes than ever before. Over the past couple months, we have seen a slight increase in rates, but still, a 3.5% interest rate allows many to afford to buy a home for the first time or afford more homes than they had in the past.
Reduced Risk of Foreclosure. Back in the mid-2000s many homeowners, unfortunately, were cashing out on their home’s equity or were locked into negative interest mortgage loans creating negative equity. This means many homeowners back then owed more than their house was worth. Today’s situation is just the opposite, as underwriting for a lender has become very strict, unlike the situation ten+ years ago. Now most homeowners can truly afford the homes they are purchasing.
We can expect the housing market to cool as mortgage rates continue to increase and buyers hit an affordability wall, meaning we can expect that home prices will peak and flatten, but not crash.
Buying a Home in a Seller’s Market
Be Realistic. In this market, it may be necessary to compromise on some of the ideal features you would like in a home. Can you overlook the old carpet, outdated features, and budget in slowing remodeling the home yourself to your own taste? Could you live with a two-car garage, over a three-car? Compromising can save thousands and more importantly get you in a house in one of the greatest cities in the US now.
Broaden your search area. Homes near the Greenbelt and downtown go for a premium, as do newly built homes or homes with a large property. Consider moving to neighborhoods that are less popular (now) with the knowledge that they may soon be a hot neighborhood to live in. Check out homes in Nampa and Caldwell as these are great alternatives to get more house for less money, just 20-30minutes from Boise.
Financing. It is imperative that you have your financing in place BEFORE starting the home buying process. A local lender, that understands this market and your options is the best place to start. Have earnest money set aside as well as closing costs before you start the process, so you know how much you can afford and put your best offer forward. If you are planning on using all cash to pay for a home have your proof of funds letter ready so this can be submitted with an offer, making your offer look reliable.
Put your best offer out there. Remember, turn-key homes, or competitively priced homes in desirable areas attract multiple buyers. To get your offer noticed, put together the best offer possible and remember most homes are selling at full-price or over asking price. “Good Deals” aren’t really happening right now. Put your best number and terms out there that you can comfortably live with. The right home always comes around so be patient that it may take a few tries before finding the right home, but have faith it’s out there.
Selling a Home in a Sellers Market
Despite how easy it may look to sell a home in this market there are certain factors that homeowners should consider before selling their home. The first factor is price. Having worked with many homeowners the past couple of years I notice that the common thought among many of them is to price high and see what the market brings. Unfortunately, that line of reasoning usually leads to homes sitting on the market, drastic price cuts, and disappointed sellers. Fair Market Value is the ideal place to price a home in this market. Too low and you will most likely get multiple offers, but they may not go as high as if you started at the right price range. Start too high and you scare away many buyers that may have potentially paid your desired price but were cautious not to start the process knowing that most homes sell over the asking price. How do you find what is the Fair Market Value for your home? Find a real estate agent with experience selling homes in your area and home type.
In Treasure Valley’s current housing market, we are seeing more than just price plays a role in the offer a homeowner chooses to accept. The terms of the offer can often be more appealing than the price itself. Over the past few months, more and more buyers are waiving their home inspection, or agreeing up front to purchase the home “as is”, meaning not asking for any repairs. Additionally, some buyers using financing to purchase may agree up front to make up any difference in price should an appraisal come in lower than the agreed-upon price. This along with other terms can make an offer more solid and secure in the eyes of the homeowner and may be worth more than just the final price.
Here is the median price breakdown for single-family existing & new homes in Ada and Canyon County for March 2021
Median Sold Price
Nampa: $372,000
Caldwell: $377,000
Middleton: $425,000
Median Sold Price
Boise $460,000
Meridian: $459,500
Eagle : $715,000
Star: $490,000
Kuna: $417,000
For more details on the market and trends in the Boise Metro Area please contact Boise Area Real Estate Expert, Jennifer Louis at (208) 509-9122 or jennlouis@welcometoboiseandbeyond.com
