Have Boise Area Home Prices Hit a Peak? Not Yet
Posted by Lisa Kohl on Friday, August 10th, 2018 at 4:55pm
Boise-area home prices rose by more than 15 percent for the 7th month in a row in July.
Boise’s median single-family house price jumped 17.6 percent, up from an annual rate 16.7 percent in June.
Prices in Ada County finished the month at $316,000, an increase of 17 percent from last year. While below the high set in June, July’s home cost is the second highest on record.
Canyon County continues to lead local home price appreciation gains jumping nearly 24 percent to a new all-time high of $229,900.
As the last hold-out in the Boise-metro sub $200,000 group; Caldwell house prices rose to $206,495 from $196,445 in June. An increase of 23% from 2017.
The cost of a house within a 30 thirty-minute drive from Boise, in any direction, now exceeds $200,000 for the first time.
Home prices have risen steadily since 2011 as population growth, wage increases, and economic expansion has led to healthy and increasing demand.
New construction home sales have risen year to date, but at 268 per month, are 34 percent below what we saw in 2005. Between 2009, the year local demand begun to outpace supply and 2016, we undersupplied demand by nearly 7,000 new houses.
Home builders just haven’t kept up with demand. With a shortage of construction workers, rising building and land costs, that trend isn’t likely to reverse itself anytime soon.
1,518 homes are currently listed for sale in Ada County marking a 21.5 percent decline in inventory over the previous twelve months. While at the same time, the total number of homes sold has increased every month since November of 2017. We are seeing strong demand from home shoppers and a supply that has decreased for 47 months in a row.
"If something cannot go on forever, it will stop."
We are beginning to see early signs of slower growth in local real estate prices.
Higher prices themselves will eventually become their own undoing as affordability continues to drop and homebuyer fatigue sets in.
30-year fixed mortgage rates finished the first full week of August at 4.59 percent, up from 3.97 percent 12 months ago. For the median-priced home, that equates to a $20,000 loss in purchasing power.
The combined effect of higher home prices and less purchasing power have made the bidding wars and the buyer contingency waivers of 2016 and 2017 much less common today.
Two of the area largest homebuilders essentially reversed their spring price increases, albeit they were significant increases.
With half of all homes selling in less than ten days, it is still very much a seller’s market.
Until we see a big drop in demand, which is unlikely with the shortage of available housing, or a significant increase in inventory, a peak in prices is unlikely.
Neighborhoods by the Numbers
Northeast Boise ($511,200) continues to be the priciest neighborhood followed by Eagle ($444,000) and North Boise ($434,000).
The lowest prices can be found on the Boise Bench ($250,000), in Kuna ($253,990), and West Boise ($260,500).
July Boise Real Estate Market
The average price per square foot for Boise is $177, an increase of 20.41 percent compared to the same time last year. Boise housing market summary:
- Median list price - $295,000 (up 18%)
- Median sold price - $294,000 (up 17.60%)
- Total home sales - 503 (down from 543)
- Median days on market - 7 days (down 1 day)
- Available homes for sale - 1.21 months supply (down from 1.65)
- 30-year mortgage rates - 4.53% (up from 3.97%)
Idaho Housing Markets in July
Median sales price:
- Ada County - $316,000
- Eagle - $443,871
- Garden City - $274,449
- Kuna - $250,540
- Meridian - $325,000
- Star - $375,200
- Canyon County - $229,900
- Caldwell - $206,495
- Middleton - $251,000
- Nampa - $227,100
Lisa Kohl
Treasure Valley Realtor Lisa Kohl loves what she does. It shows in her attitude, in her work, and in the many reviews written by her past clients. Lisa carefully studies the local housing market to give her clients the edge when buying or selling a home in Idaho. We Know Boise is a full-service real estate team that combines our LOCAL expertise with traditional know-how to create exceptional results for each of our clients.
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NOTE: Information in this market report was obtained from the Intermountain MLS (IMLS) on August 9th, 2018. Deemed reliable but not guaranteed. All information refers to single-family homes. Current inventory is calculated on a twelve-month rolling average. We believe existing homes for sale are the best way to gauge current Boise home prices and Boise housing market conditions. New construction home prices are much more volatile and tend to exaggerate the numbers, particularly on a month to month basis.
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