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.

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

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 [email protected]

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.

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

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 [email protected]

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:

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.

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

Median Sold Price

Boise $500,000

Meridian: $455,500

Eagle : $849,000

Star:  $532,000

Kuna: $455,000