The Boise housing market is still experiencing some positive momentum, but the breakneck pace of the seller's market frenzy might be easing slightly. Home prices continue to climb reflecting a year-over-year increase of over 10%. This indicates that sellers are still in a strong position.
However, there are some subtle shifts. The number of homes sold has dipped compared to last year, suggesting that the intense buyer competition may be moderating a bit. This could be due to a few factors, such as rising interest rates or a leveling off in overall demand.
Additionally, homes are selling faster than ever. This remains a positive sign for sellers, but it might also indicate a more balanced market where buyers have a chance to act quickly before homes disappear. Here are the latest trends in the Boise housing market.
The State of the Boise Housing Market in 2024
Boise Real Estate Market Summary for April 2024
| Statistic | Median | Change |
|---|---|---|
| Median list price | $525,000 | Up $25,000 (5%) |
| Median sold price | $525,000 | Up $25,000 (5%) |
| Average price per square foot | $314 | Up 4.7% |
| Total home sales | 261 | Up 34 |
| Median days on market | 6 days | Down 4 |
| Available homes for sale | 1.56 month supply | Up 0.4 |
| 30-year mortgage rate | 6.99% | Up 0.65 |
Treasure Valley Housing Market by Area
| Area | Median Price | Change |
|---|---|---|
| Ada County | $556,500 | Up $39,000 (7.5%) |
| Eagle | $669,900 | Down $180,100 (-21.2%) |
| Garden City | $622,290 | Down $15,710 (-2.5%) |
| Kuna | $449,990 | Up $33,490 (8%) |
| Meridian | $544,990 | Up $45,045 (9%) |
| Star | $562,925 | Down $120,395 (-17.6%) |
| Canyon County | $429,995 | Up $40,005 (10.3%) |
| Caldwell | $394,900 | Up $34,905 (9.7%) |
| Middleton | $454,990 | Up $10,540 (2.4%) |
| Nampa | $423,695 | Up $33,695 (8.6%) |
Robust Demand and Rising Prices
The Boise housing market continues to experience robust demand and a scarcity of available homes, resulting in an upward trend in home prices. However, this surge in prices is not without its challenges, as rising mortgage rates threaten to temper the enthusiasm of both buyers and sellers alike.
May typically marks one of the busiest months in the housing market, particularly for families with school-aged children looking to settle into new homes before the start of the new school year.
In April, the median price of a single-family home in Ada County saw a year-over-year increase of 7.5%, reaching $556,500. Similarly, Boise witnessed a 5% increase in home prices, with the median price climbing to $525,000. Canyon County experienced the most significant surge, with prices reaching $429,995, marking a notable 10.3% increase from April 2023.
Boise Market Dynamics and Trends
Despite the rise in prices, bidding wars have become less frequent in recent months. However, homes that are fairly priced and move-in-ready continue to attract swift offers. In Ada County, the average time a home spent on the market before receiving an offer decreased to just 14 days, compared to 21 days in the previous year. Similarly, homes in Boise sold within six days, while those in Canyon County remained on the market for an average of 24 days.
One of the key factors contributing to the resilience of home prices is the significant increase in wages in Boise. According to the Milken Institute, wages in the area surged by an impressive 62% from 2017 to 2022, positioning it as one of the fastest-growing major metropolitan areas in terms of income growth.
Population Growth and Inventory Challenges
The Treasure Valley has experienced a substantial influx of residents, with the population increasing by nearly 100,000 since 2020. This influx, coupled with rising wages, has intensified the demand for homes while exacerbating the shortage of available inventory.
Many homeowners, particularly Baby Boomers, are opting to stay in their homes longer, further reducing the number of resale properties available on the market. This low inventory cycle perpetuates itself, as potential sellers hesitate to list their homes without clarity on their next move.
Impact of Rising Mortgage Rates
Despite the prevailing low inventory and strong demand, recent weeks have seen signs of softening demand as mortgage rates have climbed above 7%. The increase in rates not only affects affordability but also prompts some potential buyers to reassess their purchasing plans.
The current mortgage rates, hovering around 7.09% for 30-year mortgages, have already influenced buyer behavior, with mortgage applications reaching a 28-year low last October when rates approached 8%.
Market Outlook and Considerations
As we navigate through the spring home-buying season, it remains essential to monitor the evolving market conditions closely. While sales typically peak during this period, the impact of rising rates on buyer behavior is yet to be fully realized.
For sellers, setting a competitive price aligned with market dynamics is crucial. While demand remains strong, it's advisable not to overprice your property, as this could deter potential buyers. Instead, aim to capitalize on the current demand while it's still robust.
In summary, the Boise housing market continues to exhibit resilience amidst changing economic conditions. With careful consideration of market trends and prudent pricing strategies, both buyers and sellers can navigate this dynamic landscape with confidence.
Insights into Ada County Housing Market Trends
Unprecedented Growth in Median Sales Price
The Ada County housing market is witnessing unprecedented growth, with the median sales price experiencing remarkable leaps. In March 2024, there was a staggering $33,000 increase from the previous month, marking one of the highest month-over-month jumps in history. This surge follows a similar trend observed in April 2023 when prices soared by $32,500. Notably, the resale market witnessed a remarkable $56,800 hike, setting a new record for month-over-month increases in Ada County's history.
Strong Sales Performance
Despite the challenges posed by market dynamics, the number of homes sold in Ada County remains robust. In March 2024, sales surged by over 100 closed contracts compared to the previous month, demonstrating resilience and strong buyer demand. Interestingly, this month's sales figures are on par with the performance observed in April and October 2023, indicating consistent market activity.
Surge in Pending Sales
Pending sales in Ada County have surged to unprecedented levels, reaching the highest frequency recorded since August 2022. The heat in the resale market during March 2024 almost mirrored the temperatures experienced during peak summertime in July 2023, with 478 signed contracts indicating a bustling market eager for transactions.
Fluctuations in Inventory
While the inventory levels rebounded to pre-winter counts, surpassing the selection available in March 2023, there have been fluctuations in the market. Compared to February 2024, inventory levels have slightly dwindled, although consumer consumption of new builds has eased slightly. This dynamic reflects the ever-changing nature of the housing market, where supply and demand continuously interact.
Shifts in Days on Market
The days on market for existing homes saw a notable decrease, with properties going under contract eight days quicker than the previous month. Conversely, new construction speeds eased by 14 days, indicating some variability in market dynamics. Notably, there were 16 new builds that remained on the market for longer than 200 days in March 2024, signaling potential challenges in this segment.
Insights from BRR's President
Elizabeth Hume, President of Boise Regional REALTORS® for 2024, emphasizes the challenges faced by the resale market in meeting consumer demands. She highlights the importance of utilizing specialized REALTORS® who excel in buyer negotiations to navigate the complexities of today's market successfully. This underscores the significance of expertise and strategic guidance in achieving favorable outcomes amidst evolving market conditions.
Boise Housing Market Forecast for 2024 and 2025
The average Boise, ID home value is $489,606, up 4.3% over the past year and goes to pending in around 7 days (Zillow). In March 31, 2024, the median sale price reached $465,456, reflecting the midpoint value of all residential properties sold during that period. On the other hand, by April 30, 2024, the median list price surged to $558,317, representing the midpoint value of properties listed for sale.
The market exhibited a 24.8% surge in the percent of sales over list price by March 31, 2024, indicating a significant portion of properties sold above their listed price. Conversely, 49.5% of sales were recorded under list price during the same period, showcasing a considerable proportion of properties sold below their listed price.
Forecast for Boise City MSA
The Boise City Metropolitan Statistical Area (MSA) housing market is poised for continued growth, as indicated by the forecasted data. With a BaseDate of March 31, 2024, the forecast predicts a steady increase in housing prices and demand over the coming months.
From April 30, 2024, to June 30, 2024, the forecast anticipates a 0.4% rise, signaling a modest yet positive trajectory. Looking further ahead to March 31, 2025, the forecast projects a more substantial growth of 3.7%, reflecting the region's attractiveness for homebuyers and investors alike.
This forecast suggests a promising outlook for the Boise City MSA, driven by factors such as population growth, economic stability, and a favorable housing market environment. However, it's essential to monitor market dynamics and external influences to adapt strategies accordingly and capitalize on emerging opportunities.
This graph by Zillow illustrates the growth of home values in the region over the past year, along with a forecast suggesting this trend will likely continue for the next year.
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 $489,606, showing a slight 4.3% increase over the past year, and homes going pending in approximately 7 days, the market reflects responsiveness and opportunity.
While the market has experienced a modest adjustment, it is not indicative of an imminent crash. 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.
RECOMMENDED READING: Idaho Housing Market Forecast for 2024
