The news is out that home prices in the Boise Metro Area rose by 18% in 2020, yet some of the trends were quite surprising. Let’s dive in and analyze the sales from last year to give us a realistic idea of what we can expect in 2021.
Low Inventory
Unfortunately, this is one trend that will continue through this year and possibly longer. According to the 2019 Census Bureau, the Boise Metro area is growing in population by roughly 1,700 people per month. That’s about 20,000 moving to the area annually and these stats are still be to updated.
Due to the COVID-19 situation and the mass exodus of individuals and families escaping large cities in search of small to mid-size cities, such as Boise we can expect the number of those moving here is actually substantially more. To put it in perspective in 2021 we can estimate that around 2,000 people are expected to move to the Valley monthly and as it stands today the Boise Metro area only has only about 120 homes active for sale. That’s a dramatic decrease from a year ago when the housing inventory was still extremely low. Obviously, 120 homes are nowhere near enough housing for those moving to the area, not to mention those already living here looking for a home to purchase. On the positive side there are projections that those who held off selling in 2020 may be ready to sell this year should the COVID-19 numbers start to dissipate.
Home Prices
While it’s true that home prices did rise substantially in 2020 it’s interesting to note that not all homes faced a bidding war, and actually the majority of homes sold at full price or under asking price in both Ada and Canyon Counties in 2020. Take a look at this chart to compare sales throughout the area:
These statistics demonstrate that only 20% of existing homes sold CASH and 80% sold with financing from a lender or other type of financing. Of all the homes that sold in Ada County 64% sold under the asking price or at full price (within $100). This is good news for buyers in that it clearly shows there are still opportunities to purchase a home without having to fear losing out on an offer due to a cash offer or a bidding war. This chart also gives sellers a realistic view not to expect all offers will be over the asking price and cash especially with prices projected to continue to rise over the next year.
Canyon County remains the most affordable area to purchase a home in the Valley and most likely will remain this way in 2021. In Ada County, the most popular areas and the highest increase in home prices were found in Meridian where home prices rose by nearly 16% from 2019. The Boise Bench saw a 19% increase from the previous year with the median price in 2020 at $322,000 and we shouldn’t ignore one of the newest sought-after areas, West Boise that held its own compared to the competing areas for rapidly increasing pricing. The median price for a home in West Boise in 2020 topped at $329,000 a 15% increase over 2019.
New vs Existing Homes
With the ever-growing need for housing, buyers are seeking refuge in newly constructed or soon to be under construction homes. Yet the supply of new homes has fallen drastically behind the demand for several years. A shortage of materials, labor, and building lots will mean many months and years of inadequate supply. Here’s a look at the new construction vs resale homes that sold in 2020:
Low Mortgage Rates May Rise
One of the factors fueling the demand for housing this past year was the historically low-interest rates, but experts are all saying we will slowly see those rates rise in 2021. In 2020 rates hit a historic low of 2.71% and some are saying that’s as low as we’ll ever see it go. Will the projected increase in rates impact the market in the Boise Metro area? Well, yes and no. As we read earlier in this article the majority of those purchasing homes in the area need financing to do so. The difference of just 1% could make an affordable home out of reach for many buyers. The good news is that according to Lawrence Yun, Chief Economist of the Association of realtors mortgage rates will remain stable in 2021, with the potential for a slight increase from the all-time low of 2.71% we saw in 2020 for 30-year, fixed-rate mortgages. “In 2021, I think rates will be similar or modestly higher, maybe 3%,” he says. “So mortgage rates will continue to be historically favorable.”
With a slight rise in rates, it may push some buyers out of the market, but with the high demand, it will most likely not make a difference in home pricing. For buyers however these rates will most likely not last longer than 2021 making it a good time to start the loan process and get locked into a low rate while they still can.
As a reminder, now is the time for those considering buying or selling a home to get their affairs in order. For buyers that means having their financing in place, making a backup plan for temporary housing, should it take longer than expected to purchase a home, and have a clear idea of exactly what home they are looking for before starting to shop.
Homeowners looking to sell should prepare that their home could sell quickly once on the market. Packing now before going on the market can save sellers a lot of time and stress once their home goes pending. Don’t wait until the last minute to hire a real estate agent. If you are considering selling in the next six months now is the time to schedule the listing consultation. This free consultation will provide you with the steps needed to prepare your home before it goes on the market.
If you would like to know more about the current real estate market in Ada or Canyon Counties please contact [email protected] for more details. Sign up for this blog to stay up to date on real estate trends for the area, visit local neighborhoods, take a home virtual tour, home buying and selling tips, and more.
Jennifer Louis is the owner and operator of Welcome to Boise and Beyond, a full-service real estate company dedicated to those relocating to the area and locals looking to sell their home, and maximize value. Jennifer writes and produces with her team weekly updates on the real estate industry in Boise and the surrounding Treasure Valley. Her blog contains insights into some of Boise’s best local businesses, places to visit, and neighborhoods to discover. If you’d like to schedule a free consultation please call: (208) 509-9122 or via email.
We’ve all heard about the low inventory of homes for sale and the sad stories of home buyers being outbid on a home by a cash buyer or an over asking price offer. Then there’s the story of finding the perfect house online, but it’s gone before anyone has the chance to see it. While those stories are true it’s not the whole picture. Let’s compare the myths with actual facts of buying a home in Boise in this market.
Myth: Only Cash Offers Are Being Accepted.
We have indeed seen an increase in all-cash offers over the past year mostly due to the influx of out of state buyers cashing out on their homes in higher priced markets, however, it may be surprising to note however that the majority of homes being sold are being sold to those who are financing through a lender.
There were 1094 existing, single-family home sales from October-December 2020 in Boise, and out of those only 238 were cash sales. This means that nearly 80% of homes that were purchased last quarter came from home buyers that needed financing. This is good news for the majority of buyers out there requiring traditional financing to purchase their next home.
However, even with a strong financing offer, it’s important to understand why a cash offer could be appealing to the home seller and how to make your offer stand out if competing against one.
CASH:A cash sale reduces risk. With a cash offer, there is no chance of the loan not going through.
FINANCING:Offer a personal letter with your offer reassuring the seller of your employmentand the certainty of your loan. Also, put down a strong earnest money deposit (over 1% of the price) showing you are willing to put some skin in the game.
CASH:A lender-required appraisal is not needed. In this market, an appraiser may not have enough sold homes to use to compare and may appraise the home value under the agreed upon price. This can risk the loan and possibly force the seller to have to reduce the price to get the home sold.
FINANCING: Waive the difference in price should the appraisal come in lower than the sales price. The lender will only loan up to what the appraisal came in at, so the buyer should have funds set aside for any difference or have other options worked out with the lender to ensure financing if this happens. This will put the seller’s minds at ease that the home will sell at the agreed-upon price and on time even with a low appraisal.
CASH:Quick closing time. The other reason cash is so appealing is that with no loan approval process a home can close very quickly, even under a week.
FINANCING:Choose a local Idaho lender that can close quickly if needed. Make sure to get as much paperwork into your lender as possible to get your loan process started before you put an offer on a home. One of the biggest hangups for lenders is waiting for the buyers to submit needed paperwork required by loan underwriters.
Myth: All Homes Sell Over Price.
Although home prices have continued to rise in Boise over the past several years, you may be surprised that the majority of homes for sale are not selling for over the asking price. If we look at the 1,094 existing, single-family home sales in Q4 of 2020 we see that over 600 of those homes sold at full or under asking price. Although price is important it isn’t the only factor. Here’s how to make your offer stand out if you are only able to offer full-price:
Know what the seller wants. Are there any other terms, other than price, that could make your offer stand out? This is why hiring the right real estate agent is so important when buying a home in this market. A good agent will have done their homework and know what the seller is looking for in an offer. Sellers may appreciate renting back the home, a quick close, or maybe a longer closing period. There are many different terms, besides price that can make one offer more appealing over another.
Myth: Buyers Are Waiving Inspections.
The inspection contingency allows the buyer to conduct a more in-depth inspection of the house, typically by hiring a licensed home inspector to discover if there are any costly repairs or areas for concern on the home. The fact is in the past six months we are seeing an increase in buyers waiving their inspection, but it’s not the majority. Should a buyer waive the inspection to make their offer stand out?
Although this can be a way to get an offer accepted, it can open a buyer up to a lot of risks should there be major repairs or damaged items on the home that were not disclosed or known about by the seller. Most real estate agents will not recommend their clients waive this important protection, but there are some exceptions. For example, if the buyer is or has a friend/family member with the knowledge to inspect the home before putting an offer in. If the buyer feels comfortable with the assessment then waiving the inspection, if there are multiple offers, could be a good bargaining tool. Another option is to hire an inspector to quickly inspect the home for any major items before writing an offer. This can be more of a challenge as inspectors are typically booked out by several days and the cost can range from $150-$300+ for an inspector.
Either way, it’s important to decide how you will handle the inspection contingency before putting an offer on a home. This is something you and your real estate agent should discuss in-depth before starting the home buying process.
Myth: Homes Sell In One Day.
While some homes sell the first day on the market, the majority of homes stick around long enough for most serious buyers to get a look. The median days on market for existing, single-family homes in Boise during Q4 of 2020 was four days. Four days is still not a lot of time, but it gives most home buyers a chance to take a good look at the home.
In this market, it’s essential for buyers to be proactive in their search and have time set aside to look at homes as they come on the market. The majority of homes go for sale Wednesday through Friday in this area. To ensure an in-person visit make sure to talk with your employer about having the flexibility to go see a home last-minute when it hits the market. Try to visit the home during the day, rather than waiting till the end of the day when it’s harder to see the home due to light or risking not having enough time to get an offer in should there be other offers on the table. If you are coming from out of state plan on taking 4-5 days up to two weeks to visit homes as they come available and make sure your agent has alerts set up to be notified as homes hit the market that meets your criteria.
It’s important to remember that every seller and buyer are unique and there are many methods of getting an offer accepted when there are multiple offers. Buying a home in the Boise area can be a challenge, but geared with the facts, preparation and a real estate agent that has proven experience in this market can make all the difference.
Set up a free buyers consultation to learn how you can successfully navigate the challenges of buying a home in Boise and the surrounding area.
Jennifer Louis, Boise Real Estate Expert Phone: (208) 509-9122 [email protected]
Winter is a time that buyers and sellers tend to put off buying and selling real estate until the holiday season is over and the warmer weather appears. However, this year it seems only the sellers took a few months off, while buyers frantically try and snap up anything as soon as it hits the market.
Once again it comes down to inventory. We’ve continued to see a surge in buyers in the area for the past year and with fewer and fewer homes for sale creating a major supply/demand issue and hence driving up prices. What does this mean for buyers and sellers? Let’s examine the facts and trends and find out.
The above comparison shows just how dire the inventory situation is in both existing homes and new construction for sale this time of year. As we approach the new year we should start to see inventory increase, but most likely not to a healthy level of (six months of inventory) like we would like to see in a balanced market (or 5,000 homes for sale more or less). This means we will continue to see an increase in home prices into 2021 and most likely through Summer, perhaps Fall.
Here’s a look at the Market Trends for all of Ada and Canyon Counties for existing homes over the past year. (Some of the numbers may slightly vary to the chart above due to the fact that manufactured homes were not counted above.)
Courtesy of KW Realty Boise Market Trends.
Should I sell now, or wait for Spring?
The question I hear the most from both buyers and sellers is, “Should I buy or sell now or wait for Spring?” The quick answer is, now. If you are considering selling and looking to maximize your home price, now is the time. With such low inventory selling a home, even in the midst of winter will make your home even more appealing as buyers are scrambling to find something.
For example, when I list a home I check to see what other comparable homes are on the market that same week to see how we compare. In November and December there were times that in Boise there were only 1-2 homes that were for sale that a prospective buyer with the same criteria and price range as my listing could consider. This means the home I’m listing will most likely sell quickly and for asking price, if not over.
For buyers, it can be a bit more complicated due to the low inventory and high demand, but statistically there are less people moving into the area in the middle of winter, so you have less buyer competition and more opportunity. Also, once you buy in a market that is going up then you can start building equity a lot quicker. With this said, buyers should be prepared that the right home can take time to find and have temporary housing lined up or a place to stay while shopping for their next home.
What can we expect in 2021?
With the pandemic still in full swing we can expect it to continue to influence the real estate market until the curve is flattened or disappears. With warmer weather and a decline in COVID numbers we may start to see more homes go on the market in both Ada and Canyon Counties which will help stabilize the market. However, Realtor.com, Forbes and list of others have put Boise on top 5 list of markets that will continue to grow in 2021.
The growth will come from neighboring states seeking refuge in Idaho’s more “affordable” housing market and natural setting. After months of lock downs, quarantining, and working and schooling from home many are looking for a home that offers more bang for their buck and often Idaho fills that need.
Realtor.com estimates a 9.1% growth in 2021 over this years’ 18% growth we’ve already witnessed. Home prices will continue to rise through the Spring and most likely through the Summer. Days on market may fluctuate as more homes become available to buy.
As a reminder, now is the time for those considering buying or selling a home to get their affairs in order. For buyers that means having their financing in place, making a backup plan for temporary housing, should it take longer than expected to purchase a home, and have a clear idea of exactly what home they are looking for before starting to shop. Home owners looking to sell should prepare that their home could sell quickly once on the market. Packing now before going on the market can save sellers a lot of time and stress once their home goes pending.
If you would like to know more specific details about the current real estate market in Ada or Canyon Counties please contact [email protected] for more details. Click here to stay up to date on real estate trends for the area, visit local neighborhoods, take a home virtual tour, home buying and selling tips and more.
Jennifer Louis is the owner and operator of Welcome to Boise and Beyond, a full-service real estate company dedicated to those relocating to the area and locals looking to sell their home, and maximize value. Jennifer writes and produces with her team weekly updates on the real estate industry in Boise and the surrounding Treasure Valley. Her blog contains insights into some of Boise’s best local businesses, places to visit and neighborhoods to discover. If you’d like to schedule a free consultation please call: (208) 509-9122 or via email.
Do you have the feeling it’s time to move, but then you keep asking yourself, Am I ready to sell my house? Times are strange. Where will I go next? And then there are all those memories packed inside those four walls, not to mention, it’s the most valuable possession you own.
Reflecting on if you’re ready to sell is important since selling at the wrong time can cause trouble for years to come. So how do you know if it’s the right time to take the leap and sell? Here are 5 tell-tale signs you are ready to sell:
1. You Have Equity In Your Home
From a financial point of view, you are in a good position to sell your home when you have built equity. During the housing crisis back in 2008 millions of homeowners ended up with negative equity, meaning they owed more on their homes than they were worth.
Selling when you have negative equity is not the ideal situation. That’s called a short sale. Breaking even on your home sale is better, but it’s not the best scenario. If you’re in either situation, don’t sell unless you have to avoid bankruptcy or foreclosure.
For the last several years, home values in Boise and the entire Treasure Valley have increased rapidly meaning most homeowners are building equity. Their homes are now worth more than they owe on them, and that trend will persist as they pay down their mortgages and home values continue to increase.
So how to figure out how much equity you have in your home? It’s less complicated than it seems to get a general idea. Here’s how you do the math:
On your latest mortgage statement locate your current mortgage balance. Next, you need to find out your home’s value on the current market. You can use online valuation sites, but since Idaho is a non-disclosure state those prices are not accurate but can give you a rough estimate. Ideally, if you’re considering selling you should ask an experienced real estate agent in Boise or the surrounding area to provide you a Comparative Market Analysis or CMA. Boise real estate agents will typically do this for you at no charge.
Now with those two numbers, simply subtract your mortgage balance from your home’s estimated market value. The number you come up with will provide you a good idea of how much equity you have.
Example:
$379,000 Current Home Value
– $225,295 Mortgage Balance
=$153,705 Equity
A good rule of thumb to know if you have enough equity is that you have enough to pay off your current mortgage with enough left over to provide a 20% down payment on your next home. But if your sale can also cover your closing costs, moving expenses, and even larger down payment—that’s even better. Another advantage to a 20% or more down payment on a home will eliminate having to pay private mortgage insurance or PMI which will save you hundreds, if not thousands of dollars a year.
2. You Can Afford a Home to Meet Your Current Needs
Probably the main reason you are considering selling is based on how well your home meets your everyday needs. Perhaps it could be that with the recent changes in 2020 you now will be working from home indefinitely and the kitchen counter isn’t the ideal work area. Maybe you could use another bedroom (or more) for your growing family. Or maybe the situation has changed and your kids have all moved out and you’re ready to downsize. It’s freeing to sell large home, pay cash for a smaller one, and invest the rest for your retirement.
Whatever the reason for the change, make sure your mortgage fits your budget. A good recommendation is to keep your monthly payment to 25% or less of your take-home pay on a 15-year fixed-rate mortgage.
3. You Can Cover The Costs To Move Out of Pocket
It can be easy to get carried away by the excitement of your next home that you forget to account for the cost of moving out of your current one. Hiring professional movers? Save up cash to cover the cost of packing up and hauling your stuff away.
You should also invest a little to make sure your current home is in tip-top shape to bring in top dollar. Focus your home improvement on paint, curb appeal, plus kitchen and bath upgrades. If you have the cash and your roof or HVAC are nearing the end of their lives get them replaced as this will give confidence to the new buyers and bring in a higher price.
Remember whatever you put into your home you make back and usually double when you sell. That means if you invest $10K into getting your home in shape you can expect a minimum of $20K more in return when you sell. If you are on more of a budget, a little bit of fresh paint and elbow grease can go a long way into making a great impression—and getting your home sold fast!
4. You’re Emotionally Ready To Sell Your Home
The finances are one thing, but selling your home is an emotional issue too. Ask yourself the following questions before you put the “For Sale” sign out front:
Are you ready to put in the work, pack your house to get it ready for potential buyers?
Are you prepared to be able to leave your homes so it can be shown to buyers?
Are you ready for honest negotiations over what buyers are willing to pay for your home or may want to be fixed on your home before they agree to buy?
Are you ready to move out and leave the place where your family has made memories?
Finally, have you looked at what is out there on the market for your next home, and are you ready to start the home hunting process?
You must be ready both financially and emotionally before you sell. It’s also good to note that in Boise’s hot real estate market buying a home can be a challenge and more expensive than what you are used to. Being realistic and not expecting to sell high and buy low is important, but rather understand you are selling to better accommodate the next chapter in your life.
Having a local real estate agent in Boise or the surrounding area guide you decipher if this is the right time financially and emotionally is a great step if you are still on the fence about selling.
5. You Know What’s Going On In Your Local Real Estate Market
You’ve been following the real estate facts and trends for the past couple of years and realize that real estate in Boise, Idaho continues to increase in value. Although we can’t predict 100% how the housing market will perform in 2021 we can estimate based on the past year that home prices will continue to rise as we move into the next year.
Supply and demand is the reason we can reasonably expect the market to stay hot as we venture into 2021. Boise is at just a two week supply of homes for sale and Ada and Canyon Counties, in general, are not too far from that number. With buyers moving here from all over the country to escape big-city life and get a taste of the great lifestyle and more affordable living in Southern Idaho it appears the demand will continue to grow.
In other words, if you are selling a house there is no better time financially as it is definitely in the seller’s favor to sell. Buying can be more challenging, but as prices continue to increase that means buying sooner than later could mean starting to build equity quickly.
So, are you ready to sell? Maybe you didn’t meet all the five signs and need to reevaluate later. Regardless, if you have questions and want more information about the local real estate market and if it makes sense to sell please contact top real estate agent for Boise, Idaho, and the surrounding area, Jennifer Louis at (208) 509-9122 or [email protected] for a free consultation, with no obligation.
Buying or selling a home is one of the most important events in many people’s lives yet, when choosing a real estate agent to represent them in this important process many people choose to go with a friend or relative, and in some cases, that’s not always the smartest move. Hiring an agent with a better knowledge of your area and a solid record of success selling homes similar to yours can save buyers and sellers a lot of headaches, money, and time. Here are a few tips on how to hire the best real agent for your needs:
Do Your Research. Note who has been selling a lot of homes in your neighborhood either via their yard signs, social media pages, or regular mailings to your home. Then find out if they have an open house and drop in and see how they interact with buyers. Are they knowledgeable about the home they are selling? Are they interacting with buyers? Ask them about the neighborhood and home and other recent sales in the area. If you find a name you like, find out if they work on a team or individually and who you would work with throughout the process.
Ask Questions. Both buyers and sellers should ask agents about the homes they’ve sold in the area recently and what they know about recent sales in the neighborhood.
Ask each agent how many transactions they’ve closed over the past 12 months. Their answer should be about one per month or more. And it’s best if most of those houses were in your price range and a good majority in your area. Sellers should have them compare the asking price and selling price and the time it took to sell the home. How did negotiations go during the inspection period, etc.? Buyers should find out how successful they’ve been helping buyers get their offer accepted in a multiple offer situation.
How will agents market your home when selling? How do they attract buyers outside of MLS (Multiple Listing Service)? Look at the quality of the photography or virtual tours used to illustrate their listings and how detailed the listing information is. Ask to see examples of photography, ads, virtual tours of homes they sold in your area. Will they do an open house and will they be present for it?
Will agents help you stage your home before listing it? Good ones will critique your home, pointing out where or what you need to clean, declutter, repair, and update. Then they or someone they hire will “window-dress” your home for maximum appeal to prospective buyers.
Understand the Contract.Buyer and Seller Representation Agreements in Idaho are rather self-explanatory, but make sure your agent explains certain key dates and facts about the agreement before you sign such as:
Exclusive Right To Sell and Broker Fees. Typically the seller pays the broker fees to both the listing agent and the buyer’s agent. The common (and usually the best) listing arrangement is to give the agent “exclusive right to sell” your home. That means if another agent brings in a buyer, your agent will split the commission with the other agent. This arrangement gets your home the most attention from other agents.
Commit to a reasonable listing period. The date you sign the Agreement to the date your home officially sells and records is considering the listing period. In Idaho, most homes are selling in under 90 days and most agents will ask for no more than a six month listing period. You can always commit to a shorter period and renew your listing with your agent if more time is needed, but have your agent show you what is a realistic time to sell your home in your area.
Cancellation Policy. If you decide while under the contract that it’s not the right time to buy or sell or maybe your agent is a nightmare to work with, you will want to know how to cancel your agreement before you sign it. Buyer’s Agreements allow for a very simple cancellation as long as some criteria are met, but in a Seller’s Agreement, this would need to be discussed, possibly negotiated, and written into the Agreement before listing your home.
Ask for references. Look to see reviews on Google, Zillow, and other social media platforms to see how past clients enjoyed working with the agent. You can also ask the agent for references of past clients and contact them to learn more about their experience with the agent throughout the process.
If you’d like to learn more about the real estate market in Boise and the surrounding Treasure Valley contact: Jennifer Louis, Boise Real Estate Expert at (208) 509-9122 or [email protected].
Jennifer Louis, Boise Area Real Estate Expert is a relocation specialist for Boise and the Treasure Valley. Helping hundreds succeed in finding their perfect home while simultaneously assisting homeowners to prepare and sell their homes.
Jennifer Louis, Boise Area Real Estate Expert is a relocation specialist for Boise and the Treasure Valley. Helping hundreds succeed in finding their perfect home while simultaneously assisting homeowners to prepare and sell their homes. 