As we've entered into another year of unprecedented times in the real estate market, the answer everyone wants to know is what to expect with the market in the Boise area. Although none of us have a crystal ball, we do have experts, data and knowledge to forecast an educated picture for the near future of the real estate market.

After seeing the market on fire the first half of 2021, around mid June we started to see a bit of leveling. Buyers were fatigued from missing out on homes due to having to compete with cash offers well over list and the amount of inventory started to creep up. As we entered into fall and early winter, we were seeing a tad longer days on market as well as some price reductions. Well, come the holidays and just after the new year, the market started to ramp back up again. For buyers looking at the median price range around $450,000, homes were flying off the shelves. So what do we anticipate?

According to the chief economist for National Association of Realtors, our core inflation is up to 4% which is affecting buyers in the starting to mid-level price range. High end homes are not expected to see much of a slow down because buyers in that bracket are still going to be buying as a way to hedge their money against inflation. Along with the rise in inflation also comes the increase in mortgage rates. It is estimated rates will increase approximately .7% by the end of the year, with the biggest jumps coming in third and fourth quarter. Although this greatly affects buying power as it impacts one's payment (and most buyers live in the payment and that is how they budget for a home) the rates are still historically low compared to where they've been in the past. As this too will have the greatest impact on entry level buyers, it's anticipated we will start to see a bit of a tapering of pricing and keep them from increasing at the rate they have been. This could also have an affect on the move up market as those who are wanting to sell their starter home and transition to something larger, more expensive, etc, they may have a harder time finding a buyer.

Please keep in mind that rates will differ from buyer to buyer depending on many different factors. If you would like a great lender to chat with, please reach out to your trusted Swope Investment Properties' agent and we'll get you connected. The information provided here is an overview of the market and each specific area has its own market factors like growth, job availability, home building rates and so on. For more specifics on your area, again please reach out to your trusted Swope agent. We're here to help anytime!

Paige Brown, Associate Broker

Swope Investment Properties

As news articles revolving around our housing market in the Treasure Valley seem to have died down a bit, so has the pressure on buyers. For the first 9 months of the year, we saw year over year increases each month of 24-48% with the median home price of $534,950 in Ada County and $422,000 in Canyon County. Although prices are continuing to increase, we're also seeing a welcome increase in inventory. As of September, we've seen six consecutive months of increasing inventory. As sellers saw short days on market and high sales prices, it gave them extra encouragement to take advantage of the market and list. This is a benefit to Boise buyers as more available homes leads to less competition resulting in only about 33% of homes on the market selling for over list, the lowest percentage since June of 2020.

We are still far from a balanced market where we have 4-6 months of inventory (we're at about 1.5 months currently) which continues to result in opportunities for sellers.

As a seller, it is important to talk to your trusted Realtor about the market conditions and current comps. Due to the slower pace, we're not seeing the month over month price increases we were seeing at the beginning of the year. Some sellers may still have that in their mind and a large reason we're seeing homes sit on the market right now is due to an over-inflated list price. Accurately pricing your home the first time around leads to a higher contract price overall. It is also important your home shows well and is in good condition. With more inventory, buyers may have more options.

Although overall we're seeing an increase in the number of homes available in the Boise area, some areas that are in high demand are still going to see multiple offers and go pending quickly. This can still lead to some challenges for buyers looking in those neighborhoods meaning they'll need to be ready to act quickly and there may not be a lot of negotiation room on price. Ensuring your agent is communicating with the listing agent and finding out what's important to the seller results in either submitting a strong offer or may determine that it's not going to fall into your budget, timing or other parameters. It's important to have a clear plan with your agent when going into a potential multiple offer situation. Thankfully with incredibly low interest rates and potentially some seasonality as the holidays approach, it's still a great time for buyers. What we are seeing in the industry (and also through news avenues) is continuing growth and in-migration which will continue to add to the increase in our real estate market and homeowner's equity.

If there are any questions you have regarding the market, buying or selling, or have a friend or family member that does, we'd love to help!

Paige Brown, Associate Broker

Swope Investment Properties

Recently, Boise Regional Realtors hosted their annual housing summit. Real estate and the growth of the Treasure Valley is something that is at the tip of everyone's tongue, locals and visitors alike. As Realtors, we are having conversations every day about the state of the market and where things are at.

When jumping into the Boise housing market, the first thing discussed was how prices are driven by low inventory and an increase in purchasing power for buyers. With the pandemic, many have also decided to make moves out of bigger, busier environments and head to a place where they are able to afford more and have some space to be able to live and still feel safe. The jump in the market is not, I repeat, is not due to lending practices as was the problem a decade ago. Buyers are coming in with large down payments and 23% of all transactions wihtin thee Boise area were cash which has contributed to the increase in homeowner's equity and reduces some of the risk from the market.

Another factor affecting Boise housing prices is the lack of high density units. In 2019, the housing inventory only consisted of 18.2% being 2 or more units within the structure. This takes into consideration condos, townhomes, apartments and other multi-family properties. Through June 2021, only 15% of all permits were for 2+ unit structures. Having more multi-family properties is a great asset to a growing community like Boise, as it allows for higher density per lot, it generally means more affordable housing options and also spreads out construction costs.

Overall, homeowners gained an average of $71,000 year-over-year through Q1 of 2021 which is the second year in a row Idaho has had the highest increase of any state. Even with housing prices increasing an average of 32% year over year in Ada County (Boise, Eagle, Kuna, Meridian, Star, Garden City), its continuing to show as a strong market and both a great time to buy or sell. Whether you're looking at making a move with your personal home or investment properties, reach out so we can discuss your goals and come up with a plan!

Paige Brown, Associate Broker, Swope Investment Properties

Boise Investment Properties Team Blog