The Pros & Cons of Online Real Estate

The Pros & Cons of Online Real Estate

Only a few decades ago, many would have struggled to imagine a world where real estate and the internet are so intertwined. Back in the pre-internet age, buyers and sellers alike were limited to adverts in local newspapers or advertorial posters in real estate offices.  Today, the internet has created a much more efficient process to not only find a property but to sell one as well. However, as the online presence has grown so have the various options to buy and sell real estate.  Here is a look at the pros and cons of using online real estate services available in Boise compared to traditional services.

iBuyers

This is a real estate company that uses technology to buy and resell the property.  iBuyers have gained popularity as they can eliminate some of the hassles of selling a home on the market, and offer a guaranteed sale since no mortgage is involved.  However, what a seller may make up for in convenience often comes with a higher price tag.  An example of iBuyers would be Zillow, Opendoor, and Offerpad, however not all iBuyers are present in Idaho.  In 2021 Opendoor arrived in the Boise market.  The fees are similar to that of a real estate agent, and often higher, however, the process is handled completely online, without a physical agent.  iBuyers claim to buy at “market value” but since the homes are not listed on the MLS they don’t bring multiple offers, and typically sell substantially lower than homes sold on the MLS.

It makes sense to use this service if the timing is more important than the sale price.  For example, a homeowner may have bought another home in another area and needs to quickly sell their present home to use those funds for the new purchase.  A quick sale, with no chance of the sale falling through, is essential and outweighs selling on the market to try and get the best price.  An iBuyer can offer this to most homeowners, as they inspect the home upfront and offer the price, paid in cash, with no contingencies giving the seller peace of mind.  In Idaho’s hot real estate market, the majority of Real Estate Agents can also offer this service, especially if they already work with investors or cash buyers.

Flat Fee Real Estate Services

These companies charge sellers a set fee, and will typically offer some real estate services. For sellers that want to handle the sale themselves, this allows them to sell on their own and list their homes on the MLS.  However, a newer model that arrived in Idaho in 2021, Homie, claims to offer “full service” real estate services for a flat fee.  They charge $2500 fee, plus 2-3% of the sales price.  The services include a listing on MLS but with no in-person support.  Homie agents typically have less than one year of experience & work in a call center-type environment handling 10+ listings at a time.  It’s not the “full service” that most traditional real estate agents provide.

Homie posts billboards around town such as, “Save thousands”, however, is that truly the case?  In 2021, according to the IMLS in Ada County, 61% of the homes listed by Homie sold under the list price & took an avg 19 days to sell, 8 days longer than homes sold w/a traditional real estate agents.  Homie’s listings sold an avg of 6% less than comparable homes.  So, the “thousands saved” in real estate fees instead went to the buyers, not the sellers.  Take an example:  Homie listed a Boise home in June for $650K. With their model, the savings to the seller in fees were around $20K, however, the home ended up selling for $600K or $50K less than the list price while other comparable homes in the subdivision sold for substantially more. Any savings in fees was lost in the sales price & the seller in this case lost $30K+ compared to their neighbors’ homes sold utilizing traditional real estate services.  Incorrectly pricing the home, or not knowing the home’s true value is costing sellers “thousands”.

The most common Homie complaint is that the company overpromises and underdelivers. Homie advertises that sellers receive the same service as a traditional real estate agent, but Homie agents handle so many listings at once that they don’t have the time needed to dedicate to each transaction like a traditional agent would.

Reviews are quite mixed when it comes to Homie’s Services.  One of the common complaints is that Homie offers poor communication and the Seller ends up doing the work on their own, while still paying Homie’s flat fee.

“Working with Homie was a nightmare! We had to do everything…we had to keep up on our own deadlines and ask her to do things an agent would be doing anyways.” – Nicole R., Google Review

“We used Homie to sell our Condo.  The Agent/Team didn’t like phone calls.  Email was the only way to get things done…he never followed through on anything he was asked to do or even checking in with us…We would’ve been better off FSBO, since essentielly that’s how it worked out for us…” – B. Peterson, Google Review

The bottom line is that homeowners using these types of services need/want to sell their homes, but are looking to save on real estate fees.  Using Homie or flat fee services is really not much different from a For Sale By Owner approach, but in most cases doesn’t save the homeowner as much as they anticipated.  A homeowner is better off finding an experienced real estate professional in their area and pricing the home competitively to maximize the home’s value.  Additionally, most real estate agents will negotiate their fee if they are assisting the homeowner purchase a home as well.

Cash Buyer Flyers – As Is

Most likely you have received one of these flyers in the mail.  These buyers look online for homes that typically sell quickly.  They send out a mass mailing to all neighbors offering to buy the home for cash, as-is & close quickly.  The buyer typically buys sight unseen, and already has a price in mind, below market value to account for repairs & updating before reselling the home.  Most of these types of buyers offer anywhere from 10-20% under market value, but they do not charge a commission.  It is important to beware of scammers and make and be sure to know the true market value of your home before engaging with this type of buyer on your own.

In a Seller’s Market, like the one we currently have in the Treasure Valley, these offers are not as advantageous to the seller as it would be to list the home on the MLS or real estate market.  In slower markets or buyer’s markets, these offers may make more sense and should be kept for consideration when ready to sell.

Boise Real Estate Professional If you have questions about your home’s value and how much you could net with the sale of your home please contact me for a free home value evaluation. Jennifer Louis, Real Estate Professional for the Boise Metro Area. (208) 509-9122 or jennlouis@welcometoboiseandbeyond.com

Boise Realtor, Jennifer Louis talks to CBSN about Affordability

Boise Realtor, Jennifer Louis talks to CBSN about Affordability

For several years Boise has made headlines when it came to its laid-back lifestyle, affordability, and housing market, however, recently the headlines have a different tone. Several market studies and news sources, including CBS News, named Boise The least affordable housing market. Boise Realtor, Jennifer Louis, and her clients were interviewed about affordability and Boise’s housing market for this story in December 2021.  Watch the full CBSN Report here or click below.

Does it make sense to buy or sell in 2022?

If Boise is considered unaffordable, what does this mean if you are buying or selling? Since September 2021 we’ve started to see the impact of fast-rising home prices on the overall market.  As Fall approached many Buyers have hesitated to enter the market, in hopes home prices will go down in the Spring.  Potential sellers have also put the brakes on selling, after watching homes for sale sit longer than expected on the market, and often accepting offers lower than the asking price.  In Fall and Winter real estate traditionally slows down in Boise, but not for the past few years.  Home prices continued to increase even though the coldest months.  So, is the recent holding pattern seasonal or something else?

A little of both.  We have definitely seen the market slow down compared to last year, most likely due to the drastic increase in home prices we saw in 2021.  Ada County saw a 30% increase and Canyon had a 31% increase.  This has led to an affordability wall.  Meaning, for many first-time homebuyers or buyers unable to afford or qualify for loans at the median price, the chance to own a home has become challenging, if not impossible.

Yet, compared to many neighboring markets homes in the Boise area are still considered “affordable”.  The entire Treasure Valley continues to face record low inventory when it comes to homes for sale, and there is no end in sight.  Even if there are fewer buyers in the buying pool, prices here are expected to continue to increase.  Click here to access your own portal to the MLS and find out in real time what homes are selling for in the Boise area. 

Estimates are showing a 7-12% increase in home prices in 2022 in Ada County.

For buyers, this is a great time to get in while interest rates are still low.  With lower rates, and an increase in home prices, buyers can get in now and start building instant equity on their home.  Find out if you qualify to purchase a home is the first place to start. For Sellers, this is also a fantastic time.  Sellers can either cash out on their equity in this hot market and move up into a larger home, or one that better suits their family, keeping their monthly payment about the same.

A realist approach is key.

The key for both buyers and sellers is to be realistic about the market before buying a home or selling the one they are in.  For buyers, there are some fantastic home loan options out there for first-time home buyers and coupled with a low rate, buyers may be able to afford more home than they thought.  Buyers also may want to broaden their search criteria, consider other cities in the Treasure Valley that may be more affordable, and have all their ducks in a row before starting the home buying process.  This means being pre-approved by a reputable local lender, and truly understanding how much house you can afford.  Having a downpayment set aside, and mentally preparing to react quickly when the right home comes about.

Sellers also need to take this time for a reality check.  Although it is a Sellers Market, the signs are there that 2022 won’t be as dramatic as previous years.  With a median price of $534,000 in Ada County buyers are wary of throwing in an offer, so homes may sit longer than before.  We may start seeing fewer bidding wars, and fewer cash offers.  The first step is finding out how much your home is worth.  Set up a free consultation to find out.

Regardless, Boise is still a great city and place to live so real estate will continue to be bought and sold here, but perhaps at a slower pace than the past several years.

It’s key to hire the right real estate professional that knows, and understands the market you’re buying or selling in.  Contact Treasure Valley Real Estate Expert, Jennifer Louis for a free consultation.

 

 

 

More homes sell below list price, what’s next? – November 2021 Boise Market Trends

More homes sell below list price, what’s next? – November 2021 Boise Market Trends

October was another exciting month in Treasure Valley real estate, instead of the majority of homes selling over asking price, more Boise homes were selling below list price, leaving many to wonder if this trend is seasonal or an indication that the local real estate market has peaked.

Let’s Look At The Data

To some extent the decrease in inventory and pricing should not come as a surprise as this is a common trend during Fall and Winter in the area, however, in 2019 and 2020 we saw home prices continue to go up even during the seasonal slowdown.  Observing the past couple years of unusual trends, many home sellers anticipated the same would happen in 2021 and priced their homes accordingly.  Yet, this year as the Fall approached home prices suddenly started to become less affordable to many of the buyers, hence the affordability wall that is facing many buyers today.

In Ada County in October, 980 single-family homes were sold, and just over half sold for under asking price, The homes that sold under asking price averaged an original list price of $608,000 or 14% over the current median home price.  These homes ended up dropping their prices, or accepting offers around an average of 7% lower than their asking price.

The homes that sold over the asking price averaged a list price of $593,000 and sold 4% over the original list price.

When analyzing the two categories,  homes with an asking price of over $600,000 in many cases sat much longer on the market and either reduced their price or accepted a lower than asking price on their home. On the other hand, the homes selling at the median price of $533,950 or lower, especially turnkey and in desirable neighborhoods many received multiple offers and a sales prices over the asking price.  Here are the charts comparing sales price in October compared to two months earlier.

Ada County 2021 market stats

What to Expect Moving Forward

Does this mean this downward price trend will continue?  Most likely not.  Yes, home prices aren’t rising exponentially as we’ve seen earlier this year and over the past several years, but we are still in a major home inventory supply shortage.  Even with the increase in home prices, there are still substantially more buyers looking to purchase a home, than there are homes to buy.

We can expect with the current demand for housing still being high and inventory still low that home prices will slowly continue to rise in 2022.  However, there are more homeowners now that are frightened we’ve reached the peak of the market and will most likely be listing their homes in Spring and Summer 2022 which will increase the inventory and keep prices from shooting up like the past few years.

Home prices will increase in 2022, but nowhere near like we’ve seen in past years.

How much inventory does Boise Metro Have?

Another factor impacting Boise homes selling below list price is the increase in inventory.  In October 2021 we had 1,145 homes for sale compared to 448 the year before.  At present we have about a 1.4 month supply of inventory, which is substantially better than past years, but still lags behind where we need to be for a balanced market.  A better way to explain this is that for a balanced market, one that favors the buyers and sellers equally we would need roughly 4,600 homes on the market.  With our current inventory, it is clear we are not there yet, however, the increase in inventory recently has played a role in impacting how much pricing has flattened lately.

Boise Metro Area had 1,145 homes for sale in October.  It needs roughly 4,600 homes on the market to be considered a balanced market.

Here’s a chart from the Boise Regional Realtors demonstrating the market statistics compared to 2020.

Is it a good time to buy a home in Boise?

2022 should be a very interesting year for Buyers as we can expect more homes to enter the market in Spring and Summer.  If the mortgage interest rates stay low as they have been and with more inventory, buyers will have an increased opportunity of finding a home in the Boise area.  However, don’t expect home prices to come down, but to gradually push upwards.  This is great news if buying, meaning that Buyers can still start building equity from the moment they purchase a home here in the Treasure Valley.  But Buyers should be aware that searching for homes at the median sales price or lower there will most likely be competition.  Buyers will need to carefully assess how to make their offers stand out against other offers.  Hiring a real estate agent that understands the market and the areas of interest is imperative to getting their offer accepted.

When should I sell my home?

We are still in a seller’s market making it an excellent time to cash out that equity while the market is still hot and buyers are still looking for their next home.  Sellers should expect that their home may sit longer on the market than in previous years and that buyers paying top dollar are less likely to buy a home “as is”, meaning they will want the home in top shape before purchasing.  Pricing the home correctly is imperative to attract multiple buyers and get the best offer.  Hire a real estate agent that knows your market, not a call center budget real estate firm to help you get your home ready to stand out against the competition and get you the best price and terms for your most important asset.

Here’s the snapshot of Median Home prices as of October 2021

Median Sold Price

Nampa: 329 home sales $425,000

Middleton: 40 home sales $462,000

Caldwell: 156 home sales $388,000

Median Sold Price

Boise: 492 home sales – $488,880

Meridian: 270 home sales  $511,000

Kuna: 109 home sales –  $448,000

Eagle: 95 home sales –   $851,500

Star: 63 home sales –       $563,000

 

If you are considering buying or selling a home in the Boise Metro Area please contact  Real Estate Expert, Jennifer Louis at (208) 509-9122 or jennlouis@welcometoboiseandbeyond.com

Boise Home Prices Dip – October 2021 Market Trends

Boise Home Prices Dip – October 2021 Market Trends

Boise area home prices have recently dipped in many neighborhoods, and homes are sitting longer on the market than we’ve seen in the past year.  Do these changes point towards a new real estate market in the Treasure Valley or is there another explanation?  Let’s examine the recent facts and trends.

Why so many price drops?

Historically in residential real estate in the Treasure Valley during Fall, we see home prices start to go down until Spring.  In 2020 we didn’t have the same seasonality change from previous years so the recent seasonal dip we are experiencing may have caught many off guard.  Additionally, towards the end of this Summer, many of the larger builders released a lot of their homes, dropping prices and offering promos which increased the overall inventory of homes for sale in the Valley.  This was a major contributor to the price drops we saw.  For example in Ada County in January-July 60% of the single-family homes sold over asking price and only 16% under the list price.  Compare that to August and September where 35% of homes sold over the asking price and 37% sold below the list price.  That’s a big shift.  The same happened in Canyon County. From Jan-July only 19% of home sales sold below asking price and that jumped to 31% in Aug-Sept.  Below is the chart showing how much homes dipped over the past two months compared with earlier in the year to give you a clear idea.

Ada County 2021 market stats

Another factor is the affordability wall that the Boise Metro Area has hit.  Ada County’s median home price last month was over $530,000 and Canyon County hit a record $422,000 in September.  Homes priced above the median price are seeing the most price drops and sitting longer than other homes in the same area.

For most first-time homebuyers the dramatic increase in prices in 2020-2021 has priced them out of the market.  What this means is with fewer buyers, and more inventory we have seen a slight drop in home prices and an increase in the time homes stay on the market before selling.

Ada County homes in Aug-Sept spent  an avg 14 Days on Market compared to 11 in January-July.

Canyon County homes in Aug-Sept spent an avg 13 DOM compared to 9 from Jan-July of this year.

How much inventory does Boise Metro Have?

It’s important to note that even with the increase in inventory we saw in the past few months, we are still nowhere near where we need to be in order to be considered a balanced market (six months of inventory).  In fact, we only have about six weeks of inventory available in both Ada and Canyon County.  This is nearly a month increase from a year ago at this time, but still far from what is needed comparing to the demand.  To explain it differently, in September we had 1,249 homes available for sale, in order for it to be balanced, we would need to have nearly triple that number available.  Check out the stats produced by Boise Regional Realtors giving a 2020/2021 comparison in the inventory shift we’re witnessing.

What can we expect in 2022?

Supply and demand will continue to spur the price increases in the Valley.  We can expect that home prices will remain relatively flat until Spring of 2022 and then as more buyers enter the market we will start to see prices increase.  By how much?  A lot of that depends on how many buyers there are.  However as we stated earlier we have hit a price wall for many first-time home buyers, and if mortgage interest rates were to increase we can expect fewer buyers in the mix next year compared to the past year. Fewer buyers mean higher supply and although home prices will continue to increase, we can expect less dramatic increases than we’ve seen the past few years.  With that said homes may stay on the market longer than we are used to.  Instead of 7 Days on Market, we may see that number double.  This also may mean fewer bidding wars taking a bit more of the selling power away from Sellers that they have come accustomed to.

Is it a good time to buy a home in Boise?

Buyers, this is an excellent time to invest in real estate in the area.  As this article showed Boise home prices have dipped and led to a bit more inventory to choose from compared to the past.  This along with low-interest rates means buyers are able to get into a home with a bit more ease than we’ve previously seen.  The facts and trends area all showing that home values will continue to increase due to supply and demand which means investing now will equal quick equity in a home.

When should I sell my home?

We are still very much in a seller’s market and homes prepped, staged, and priced correctly are still selling relatively quickly and for record pricing.  It’s imperative to hire the right real estate agent to sell your home.  You may be tempted to use a budget real estate service, or someone you know, but in Southern Idaho’s unusual, fast-paced real estate market hiring an expert who knows, understands your home and area is key to getting you the best price and terms on your sale.

 

Here’s the snapshot of Median Home prices as of September 2021

Median Sold Price

Nampa: $417,000

Middleton: $475,000

Caldwell: $400,000

Median Sold Price

Boise: $546,000

Meridian: $545,000

Kuna: $436,000

Eagle: $765,000

Star: $543,000

 

If you are considering buying or selling a home in the Boise Metro Area please contact  Real Estate Expert, Jennifer Louis at (208) 509-9122 or jennlouis@welcometoboiseandbeyond.com

Boise Home Prices Hit an Affordability Wall – July 2021 Market Trends

Boise Home Prices Hit an Affordability Wall – July 2021 Market Trends

Home prices have continued to increase breaking records in both Ada and Canyon County all Spring and Summer.  More and more first-time home buyers are finding themselves priced out of the market as home prices hit an affordability wall.  Should we expect the market to continue to soar as we move into the second half of 2021?  Let’s look at the past few month’s statistics and the current trends to get a realistic idea of where the real estate market is heading through the rest of this year.

Low Inventory Continues to Drive Up Prices

The historic low inventory across the Treasure Valley is the driver in the drastic price increases in homes the past few months and we are still nowhere near seeing it level out.  To better understand the situation homes that take 30 days or longer to sell would be considered a Buyers Market, homes under 30 days a Sellers Market.  Here across the Treasure Valley, we have seen for several years homes selling in record time, typically less than seven days.

Ada County YTD – 77% of homes have sold in 7 days or less and only 9% took 30 days or more to sell.

Canyon County YTD –  74% of homes sold in 7 days or less with only 8% selling in 30 days or longer.

We’re not just in a Seller’s Market, we’re in a WHITE HOT SELLERS MARKET.  If we compare the Days on Market with last year we can see just how much things have changed.  2020 was known as a very hot market, but the numbers show that in Ada County 55% of homes sold in 7 days or less, and 26% took over 30 days to go pending.  That means homes are selling even 20% quicker this year than last year.

Will Boise Metro Home Prices Eventually Cool?

If we look at the homes on the MLS or market today (7/15/21), especially in Ada County, we are starting to see homes sit a few days longer than the past several months.  This could be contributed to the builders releasing more spec homes with longer closing times than existing homes, but it also could point to the fact we are nearing an affordability wall.  Meaning the median price of homes is becoming less affordable for the majority of buyers actively looking to purchase a home.

The median price for a single-family home in Ada County in June hit the mouth dropping $525,000 median price and $424,000 in Canyon County.

This pricing, along with a fast-paced market has made buying a home inaccessible to many who may otherwise have been home shopping.  Even with record low interest rates many home buyers are finding homes at these prices to no longer be affordable.

Yet, there is some light at the end of the home buying tunnel according to National Association of Realtors NAR Chief Economist, Lawrence Yun,

“Supply is expected to improve, which will give buyers more options and help tamp down record-high asking prices for existing homes.”

As we see an increase in inventory, and less home buyers on the market due to affordability we should start to see the dramatic increase in prices taper off.

What to Expect Today on the Market

It’s important to note, however, that homes priced in the fair market value range or below still have a tendency to sell for over the asking price.   As homes enter the market, multiple buyers are attempting to purchase the home, creating a competition to come up with the best offer.  What the best offer depends on the seller and what they are looking for, but generally price, financing, and days to close along with other terms to make the offer more appealing and are what will make one offer stand out from the others. Here’s a snapshot of home prices so far this year:

 

 

 

Ada County 2021 market stats

The charts demonstrate that the vast majority of homes this year have sold at the asking price and above.  Very few homes are selling under the asking price.  It will be interesting to watch as sellers attempt to increase prices if we will see these same statistics in the coming months.  Most likely we will see the prices start to flatten or level out, but only time will tell. Another interesting fact is that 22% of the homes sold in Ada County YTD sold with cash, a slight increase over last year, but still the majority of homes are selling with financing from a lender.  With interest rates still at historic low rates, and home prices going up many have opted to get a loan rather than use all their cash on a home purchase.   In Canyon County just over 18% of homes were purchased with cash and the remaining 82% with a financing from a lender.

There’s Never Been a Better Time to Sell.

With the median sales price breaking records and buyers from out of state continuing to move to the area during the summer months the market remains hot.  Yet, the statistics and data above show a possible cooling in the market in the coming months, meaning that sellers shouldn’t expect prices to continue to go up and sell as quickly as we’ve seen the past year.  One main clue is looking at new construction.  Builders are starting to release their inventory and we’re starting to see price drops in many of the spec homes coming on to the market.

68% of spec homes actively for sale have dropped their price as of 7/15/21.

New construction is a great indicator of the market and the increase of inventory they are putting out on the market along with the price reductions point towards a cooling of home prices across the board..  Homeowners who have been considering selling would be wise to start getting their homes prepared to sell now to maximize the sales value and have a chance at getting multiple offers.

Here is the median price breakdown for single-family existing & new homes in Ada and Canyon County for June 2021

Median Sold Price

Nampa: $415,000

Middleton: $430,000

Caldwell: $404,000

Median Sold Price

Boise $500,000

Meridian: $455,500

Eagle : $849,000

Star:  $532,000

Kuna: $455,000

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
May 2021 – Boise Metro Market Update

May 2021 – Boise Metro Market Update

This Spring homes slowly trickle onto the market as more and more arrive from out of state looking to invest in a home or relocate to the area.  Needless to say, home prices continue to increase throughout the Treasure Valley.  What can we expect for the real estate trends in Boise through Summer in regards to home prices and inventory?  Let’s look at last month’s market statistics and the trends to see what lies ahead.

Recent data is showing that over 20% of homes being purchased in the Treasure Valley are owned by someone other than the primary homeowner.  According to BoiseDev.com, “The combination of record-low interest rates, a nationwide housing shortage and a renewed interest in single-family homes outside of major metro areas due to the COVID-19 pandemic is fueling a new wave of investor capital in American real estate.” This along with those relocating to the area from out of state is what is driving the prices in the local real estate market.  With such high demand and no end in sight, we can expect prices to increase through Summer potentially up to 30% by the end of 2021 compared with last year.

Ada County Median Price $481,208 – April 2021 – 28.5% Increase Year Over Year

Canyon County Median Price $399,856 – April 2021 – 46.5% Increase Year Over Year

With the Boise Metro area continuing as one of the nation’s top competitive markets does that mean all locals are excluded from purchasing a home?  Well, that depends.  For first-time homebuyers, it has never been a better time to secure a mortgage at record low-interest rates. These rates allow buyers to afford more house than they could two years ago, however with out being able to cash out on equity from a home many first-time buyers struggle to put together attractive offers that compete against cash or large down payments, adding a sense of security to the Seller when choosing a buyer.  We are also seeing more local homeowners start to tap into the equity they have built over the past several years and downsize or move to more affordable areas within the Treasure Valley.  Rather than refinancing some homeowners are selling their homes and reinvesting in a different type of property or going out further from Boise to get more house for the same price.

There has also been a myth that the majority of homes being purchased by out-of-state buyers are with cash, and the stats show that is not the case.  In fact in Ada County in April only 22% of the homes sold were from cash offers, which means nearly 80% of the homes sold were secured with either a VA, FHA, or Conventional loan.  In Canyon County, it was the same with 18% of the homes sold all cash and over 80% via financing.

Another misconception is that ALL homes are selling over the asking price and the data is showing that simply is not true.  We are seeing multiple offers and homes selling substantially over the asking price typically when homes are competitively priced.  In Boise and Meridian homes at the median price point of around $450K and under tend to have multiple offers, as do “fixer-uppers” priced at fair market value.  We are seeing multiple offers and over asking offers on homes above $450K in Ada County, but these are typically homes in sought-after neighborhoods or areas or have large lots or newly remodeled homes.  Analyzing the data means we can expect a competitive market in hot neighborhoods and areas at the median price or below.

What About New Housing?

With the increase of demand for housing and more and more turning to new construction, we’ve seen some big changes in not only new construction pricing but also the process to secure a new home.  With the increase in the cost of materials to build new homes, builders are changing the way they market and sell their properties.  Recent data shows the national price of lumber and wood products increased by 28.8% since 2020, and by 30.5% since 2019. These costs are being passed along to homebuyers, and due to the uncertainty in the availability and price of materials, some builders are holding back available inventory until they are closer to delivery so they can price the property based on the actual build cost.

In the past you could secure a new home under construction with a build time of anywhere from 6-12months, now most builders are waiting to release their homes until closer to completion and asking for higher prices.  To secure a home now by a builder a purchaser may need to put down a hefty deposit and get on a waiting list that can take anywhere from 3-6 months. 

Once a property becomes available it’s another 12-18months for construction.  For those moving to the area and needing to get into a home, waiting nearly 2 years for a home is not an option. 

Another thing to look out for when purchase a new home is their price escalation clauses included in the purchase and sales agreement.   A price escalation clause is a provision included in a purchase agreement as a way for builders to recover some of all of the cost increases over the course of the home build and can be adjusted between the builder and purchaser while under contract.

With the changes mentioned above, we are seeing increases in price across new construction, however since some prospective sellers are also holding back existing homes from the market,  either because of  COVID-19, but also so they can find their next home before listing their current one this has made new homes less expensive on average, than existing homes for the past several months.  According to Boise Regional Realtors, “these unprecedented trends of new homes selling for less than existing homes, the willingness of buyers to pay over list price, and the record fast market times illustrate the incredible demand we’ve been experiencing, driven by low rates and insufficient supply.”

How to Successfully Purchase In These Market Conditions

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 Boise 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.  South Boise, West Boise has great neighborhoods and often with more affordable homes than more popular neighborhoods.  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.  Many homeowners rely on online real estate websites and the home that sold down the street to price their own home.  These are great places to start, but with Idaho being a non-disclosure state, Zillow’s Zestimates and other online websites are typically dramatically off on price.  And unless you know what your neighbor sold his house for and how it actually compares to your home in the eyes of an appraiser you might be using the wrong information to price your home either too high or too low.

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 April 2021

Median Sold Price

Canyon County: $399,856
Nampa: $385,817
Middleton: $441,000

Caldwell:  $370,000

Median Sold Price

Boise $458,000
Meridian: $455,500
Eagle : $737,000
Star:  $485,000
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