Boise area real estate and rental management blog
For decades, Tony Drost has tracked four plex metrics monthly for Ada County which includes Boise, Meridian, Star, and Kuna cities. With short supply, the longer-running average trends in Ada County fourplex data are more telling than a look at October's metrics, as we only had one fourplex sell in October.
Average Days on Market (DOM) for 2022 is 19 days, which is over double from 2021 but still considered to be very good.
The Trailing 6 Month Average Cap Rate is 4.64%. This is based on actual rents, not market or projected rents. Cap rates appear to be creeping up a bit, which is good news for buyers. Sellers are still seeing good prices, which means rents are supporting the higher cap rates.
Gross Rent Multipler (GRM or Price/monthly rents) was 182 in October. With prices not dipping, the lower GRM suggests that rents are improving. The trailing 6 month average is 195 and is more indicative to where the market is. GRPM had been over 200 from August 2021 through July of 2022.
With inventory being so low, we would think that any fourplex listing with a price based on the numbers above, and presenterd itself well, would probably sell. To date, multifamily data has not presented the same as single family home trends, where inventory has climbed. There is still cash and 1031 money in the marketplace. Cash buyers want discounts and financed buyers in search of cash flow are putting more money down. We are interested in helping sellers facilitate owner-carry purchases, if there is interest, and we have experience in this arena. Contact us if you'd lioke to discuss that creative option or a more trandional purchase or sale.
Your Boise Investment Properties Team
Tony Drost and Stacy McBain
Associate Brokers
Swope Investment Properties
Every year, all of the brokers and agents at Swope Investment Properties choose a charity to support. A majority of our charities have been local, and include the Idaho Human Society, The Idaho Food Bank, and Camp Rainbow Gold, to name a few from the past. This year, with a donor match, we were able to contribute $15,500 to the Alzheimer's Association in honor of my mother, Jackie Drost, who passed earlier this year from dementia and Alzheimer's.
Early on, Dementia is one of those diseases that can go unnoticed and easily dismissed as "old age". We all forget things. but with dementia, the brain slowly shuts down. All life threatening illnesses, to include dementia, are hard on those with the disease as well as their freinds and family. It was the hardest six years of my life, so I can't even imagine how hard it was on my mother. I am grateful for the generosity of our brokerage team and hopeful that our contribution goes to good use, and perhaps someday helps to determine the cause, a treatment, or maybe even a cure.
Thank you all! This was a very touching gesture!
Tony Drost
Association Broker
Swope Investment Properties
Your Boise Investment Properties Team
Since our last Swope Investment Properties newsletter, quite a bit has changed in the Boise area market. After seeing continuoous increases in price and decreaasing inventory for years, and at an acceleraated pace during COVID, we are now at a point where things are normalizing and softening. Althought none of us have a crystal ball, we do have experts, data and knowledge to forecast an educated picture of the near future of the real estate market.
The beginning of 2022 started off with a bang. Boise and the surrounding area had homes flying off the shelves with multiple offers heading into late spring. However, when a rate hike hit mid June, we started seeing listings aquire more days on market with fewer offers. Many potential buyers who were on the cusp of qualifying either no longer qualified for the budget they were currently looking at or weren't able to get into the market at all. With interest rates quickly going from 3 to 6%, the volume of regular home sales has decreased by 32% in Ada County, which includes the cities of Boise, Meridian, Star, and Kuna. While the volume of sales are down, nationally prices are up 15% year over year while starting to see some reductions and locally, we only have about 5% price decrease year over year. Besides during the housing crash, throughout every past recession, home prices have actually increased.
So what are we expecting to see for the future? We know that the fed plans to continue adjusting the rates and we'll likely see them go up with perhaps a few smaller decreases sprinkled into the mix. Although this geatly 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 low historically. As this will have the greatest impact on entry level buyers, its anticipated we'll continue to see a bit of tapering of pricing. This is also affecting the move up market as those who are wanting to sell their starter home and transition to something larger, more expensive, etc, are having a harder time finding a buyer. The anticipation is that this will continue throughout 2023 as things normalize.
So, if you're a buyer or seller, what does this mean for you? Well, it all depends ln your specific situation and what your goals are. In general, as a buyer, I wouldn't plan on prices taking a major hit as that's not expected. Right now, you have the benefit of not competing with a crazy amount of other offers and having to remove contingencies to be competitive. There's time to think about your decision and room for negotiations whether that be for repairs, closing costs credits or even help buying down the interest rate. For sellers, thanfully most still have a good amount of equity in their homes due to the past few years and are able to pivot a bit on this market while still coming out ahead. It's important to have an experienced agent working on your behalf to best market your house and also be able to discuss the changes that are happening so you are prepared.
For more specifics on your area, again please reach out to your trusted Swope Investment Properties agent. We're here to help anytime!
Paige Brown
Associate Broker
Swope Investment Properties
When clients have a question and call upon their Boise real estate agents at Swope Investment properties long after closing, they often start with, "Sorry to bother you....".
Rest assured, this is not necessary. As a real estate agent, we strive to be a resource for life. Certainly outside of the contracts and closing dates. It's part of the package. We consider it a compliment if you think of us as the real estate team who may able to provide the information you seek.
And if you need to check on your home's value, or if you're considering buying or selling, we' love it if you remember us then too, but the team at Swope Investment Properties will help either way.
So if you have question for any real estate agent at Swope Investment Properties, even one you haven't spoken to for a long time, rest assured there's no reason to apologize. Just give us a call or email and we'll help if we can.
Your Boise Investment Properties Team with Swope Investment Properties
Stacy McBain, Associate Broker, Swope Investment Properties
Tony A Drost, Associate Broker, Swope Investment Properties
Leslie Halvorson, Licensed Realtor and Transaction Coordinator
