Welcome to the latest update on the Boise housing market. With falling inventory, heightened demand, and increased competition among buyers, the current Boise housing market favors sellers. Home prices in the Boise housing market have been steadily rising. In December, the median sold price saw a 5.1% increase, indicating a trend of rising home prices.
Given the current dynamics of low inventory, strong demand, and favorable mortgage rates, there is no immediate indication of a housing market crash in Boise. However, continuous monitoring is essential to gauge market stability.
How is the Boise housing market doing currently?
According to the report by Weknowboise.com, the Boise housing market is currently characterized by yearly price gains, falling inventory, and plunging mortgage rates, creating a favorable environment for Treasure Valley home sellers in 2024.
Inventory and Sales Dynamics
Presently, there are 1,915 homes for sale in Treasure Valley, representing a significant 21% decrease from the previous year. The market's current pace indicates less than a two-month supply of homes, fostering increased competition among buyers.
New listings typically surge in April, but with the lowest point in inventory expected in February, the tightening of inventory is likely to persist for the next month or two.
Boise Metro Area's Allure
The Boise metro area continues to attract out-of-state buyers, constituting as much as one in five home sales in Ada County. This influx is driven by Boise's thriving job market and its appeal to retirees, adding demand without a corresponding increase in housing supply, further tightening the market.
Mortgage Rates and Demand
Mortgage rates have exhibited fluctuations over the past year, with each rate drop corresponding to an uptick in housing demand. After reaching a two-decade high of 7.79% in October, 30-year mortgage rates fell to 6.62% last week, potentially signaling an early surge in the spring housing market.
Low-priced homes are already attracting multiple offers, indicating the impact of the recent rate decline on buyer interest.
Price Trends and Construction Challenges
Local home prices have steadily risen since hitting a two-year low last spring. The construction of new homes has failed to meet growing demand over the last decade, further exacerbated during the post-pandemic period.
The combination of low inventory and elevated interest rates led to a decline in home sales in the Treasure Valley, reaching their lowest level since 2014 in 2023.
December 2023 Sales Data
December's sales data reflects purchase decisions made in October and November when rates were higher than the current rates. With low supply, any increase in buyer demand due to falling mortgage rates could significantly drive up home prices in the first quarter of 2024.
Boise Real Estate Market Summary for December 2023
- Median list price: $510,000, up $10,100 (2%)
- Median sold price: $510,000, up $25,000 (5.1%)
- Average price per square foot: $295 (8.1%)
- Total home sales: 191 (down 47)
- Median days on market: 32 days (up 7)
- Available homes for sale: 1.32 month supply (down 0.18)
- 30-year mortgage rate: 6.81% (up 0.45)
Treasure Valley Housing Market by Area
- Ada County: $516,745, up $1,745 (0.3%)
- Eagle: $929,450, up $149,450 (19.2%)
- Garden City: $545,000, up $137,500 (33.7%)
- Kuna: $450,000, down $38,088 (-7.8%)
- Meridian: $484,990, down $5,010 (-1%)
- Star: $515,000, down $64,510 (-11.1%)
- Canyon County: $410,000, up $20,000 (5.1%)
- Caldwell: $364,990, up $13,707 (3.9%)
- Middleton: $429,050, down $157,050 (-26.8%)
- Nampa: $419,990, up $20,495 (5.1%)
Ada County Housing Market Trends
According to the Boise Regional REALTORS®, in the Ada County housing market, the recent trends in median sales prices have been noteworthy. Despite a slight easing from October 2023, the market witnessed higher sales prices compared to the previous year. The impact of higher mortgage rates in early November is evident, potentially influencing the lower prices observed for the month.
Homes Sold
The transition from October to November in 2023 showed a milder seasonal slow-down compared to the previous year. Notably, new homes experienced a decrease of 11 sales since the previous month, and there were 45 fewer closings compared to the same period in 2022. These figures indicate a less abrupt decline, shaping the dynamics of the housing market.
Pending Sales
In a notable development, pending contracts in Ada County reached a summit over the previous year, breaking a streak of 31 months. The narrowing gaps in year-over-year data for sales suggest a sustained market appetite, creating an environment conducive to transactions and growth.
Inventory
The inventory landscape in Ada County witnessed a significant shift, particularly in the existing/resale category. The available properties decreased from 825 to 656, signaling a shrink in options for potential buyers. This shift could have implications for the overall market dynamics, influencing supply and demand factors.
Days on Market
One striking observation in November pertains to the correlation between sales prices and the duration homes spend on the market. Homes sold for less than $500,000 averaged 13 fewer days on the market compared to their higher-priced counterparts. This insight into the varying pace of sales across different price points adds nuance to the understanding of the local real estate landscape.
A Message from BRR’s President
Debbi Myers, the President of Boise Regional REALTORS® in 2023, expressed keen interest in the market's response to a significant drop in mortgage rates of nearly 0.75% since early November. The anticipation revolves around potential impacts on sales prices and the days on market in the upcoming month. Myers' perspective adds a forward-looking dimension to the analysis, highlighting the dynamic nature of the Ada County housing market.
RECOMMENDED READING: Idaho Housing Market Forecast for 2023
Boise Housing Market Forecast for 2024
Boise has witnessed a modest 1.0% decrease in average home values over the past year, indicating a subtle adjustment in prices. While the market experienced a slight decline, there is currently no indication of an imminent crash. Stability and gradual fluctuations characterize Boise's real estate landscape.
Considering the balanced market conditions and the slight dip in home values, now could be considered a reasonable time for potential homebuyers to explore opportunities in Boise.
As of December 31, 2023, the average home value in Boise stands at $459,653 (Zillow), experiencing a slight 1.0% decrease over the past year. Homes in Boise typically go pending in around 29 days, reflecting the region's dynamic real estate environment.
Key Market Indicators:
- For Sale Inventory (December 31, 2023): 647
- New Listings (December 31, 2023): 171
- Median Sale to List Ratio (November 30, 2023): 0.993
- Median Sale Price (November 30, 2023): $494,967
- Median List Price (December 31, 2023): $542,133
- Percent of Sales Over List Price (November 30, 2023): 20.0%
- Percent of Sales Under List Price (November 30, 2023): 52.9%
Boise City Housing Market Forecast
In examining the Boise City Metropolitan Statistical Area (MSA) housing market forecast for 2023 and 2024, Zillow provides insightful data. According to their forecast model, as of November 30, 2023, Boise City, ID, is expected to see a modest increase of 0.1%, followed by a slight dip of -0.4% by 29th February 2024. However, a more optimistic outlook emerges by 30th November 2024, with an anticipated rise of 1.3%.
Boise City MSA, encompassing various counties, plays a significant role in Idaho's real estate landscape. The term MSA refers to the Metropolitan Statistical Area, comprising Boise City and its surrounding urbanized areas. In this context, Boise City MSA includes multiple counties, with a notable housing market that influences the state's overall real estate dynamics.
Is Now a Good Time to Buy a House in Boise Idaho?
Considering the current Boise housing market dynamics, characterized by a balanced scenario favoring both buyers and sellers, the decision to buy a house in Boise, Idaho, appears promising. With an average home value of $459,653, showing a slight 1.0% decrease over the past year, and homes going pending in approximately 29 days, the market reflects responsiveness and opportunity.
Key metrics, including 647 for sale inventory, 171 new listings, and a 0.993 median sale to list ratio, contribute to a nuanced understanding of the real estate landscape. While the market has experienced a modest adjustment, it is not indicative of an imminent crash. The 20.0% of sales over list price and 52.9% under list price suggest a dynamic environment.
Considering these factors, now could be seen as a reasonable time for potential homebuyers. However, it is essential for individuals to engage with local real estate professionals, stay informed about market trends, and assess their unique circumstances before making a decision.
Interest Rates
Consider the current interest rates for mortgages. Lower interest rates can make buying a home more affordable over the long term. If interest rates are favorable, it might be a good time to consider buying, as it could result in lower monthly mortgage payments.
Personal Financial Situation
Assess your own financial stability and readiness for homeownership. Evaluate your income, savings, credit score, and other financial commitments. Buying a home is a significant financial decision, and it's important to ensure that you're financially prepared for both the upfront costs and ongoing expenses of homeownership.
Affordability
Look at the affordability of homes in your desired area of Boise. Calculate your budget, taking into account not only the purchase price but also property taxes, homeowners insurance, maintenance costs, and potential homeowners association (HOA) fees.
Long-Term Goals
Consider your long-term goals and how buying a home aligns with them. Do you plan to stay in Boise for an extended period? Does homeownership fit into your lifestyle and future plans? Real estate is generally a long-term investment, so it's important to have a clear vision of how homeownership fits into your overall life plan.
Local Economy and Job Market
Research the local economy and job market in Boise. A stable and growing job market can positively impact housing demand and property values. If the job market is strong and diverse, it might indicate a stable real estate market.
Supply and Demand
Evaluate the supply and demand dynamics in the Boise housing market. If there is high demand and limited housing inventory, it could lead to competitive bidding and potentially higher prices. Conversely, a higher inventory might offer more options and negotiating power for buyers.
Is Boise Idaho a Good Place to Invest in Real Estate?
1. Population Growth and Trends
The first crucial factor to consider when contemplating real estate investment is the population growth and trends in Boise. As of the latest data, Boise has experienced a significant surge in population, with a growth rate well above the national average. This influx of residents is indicative of a thriving city, making it an attractive prospect for real estate investment.
2. Economy and Jobs
Boise's robust economy and job market play a pivotal role in determining the city's real estate potential. The region has seen consistent economic growth, driven by diverse industries. The presence of stable employment opportunities is a positive sign for real estate investors, as a strong job market contributes to increased housing demand.
3. Livability and Other Factors
Investors should also assess the livability of the city, considering factors such as education, healthcare, and recreational amenities. Boise consistently ranks high in livability indices, boasting quality schools, healthcare facilities, and a plethora of outdoor activities. A city with a high livability score tends to attract long-term residents, ensuring sustained demand for housing.
4. Rental Property Market Size and Growth
For real estate investors, the size and growth of the rental property market are critical considerations. Boise's rental market has expanded in tandem with its population growth, providing ample opportunities for investors. The demand for rental properties is on the rise, creating a favorable environment for those looking to capitalize on rental income.
Boise's rental market has witnessed a substantial increase in size in direct correlation with the city's population growth. As more individuals migrate to Boise, the demand for housing, particularly in the rental sector, has surged. This expansion in the market size not only signifies a robust housing demand but also presents a wealth of opportunities for investors to tap into a growing pool of tenants.
The growth trajectory of Boise's rental property market is a testament to the city's economic vitality and attractiveness. The consistent influx of residents, coupled with a thriving job market, has contributed to a sustained demand for rental properties. Investors looking for markets with a positive growth outlook will find Boise's rental sector aligning seamlessly with their objectives.
One of the key drivers of this growth is the booming local economy. Boise has become a hub for various industries, attracting professionals and individuals seeking employment opportunities. As these individuals relocate to the city, the need for rental accommodations intensifies, creating a dynamic and competitive rental property market.
Moreover, the rising demand for rental properties in Boise is not solely driven by population growth. The city's appeal as a desirable place to live, work, and raise a family contributes to a steady influx of residents. The quality of life, outdoor recreational options, and community amenities make Boise an attractive destination, enhancing the demand for rental housing options.
For investors, this scenario creates a favorable environment to capitalize on rental income. With a growing market and increasing demand, rental properties in Boise present a lucrative opportunity for both short-term and long-term returns on investment. The potential for rental appreciation and a consistent stream of tenants make Boise a strategic choice for those looking to build a robust and diversified real estate portfolio.
5. Other Factors Related to Real Estate Investing
Several additional factors contribute to Boise's allure for real estate investors. These include favorable real estate policies, a well-established real estate infrastructure, and a proactive local government supporting sustainable development. Investors should also keep an eye on market trends and forecasts to make informed decisions.
REFERENCES:
- https://www.boirealtors.com
- https://www.weknowboise.com
- https://www.zillow.com/boise-id/home-values