Imagine sitting on a roller coaster that is climbing up, up, up… and waiting for a fall that never comes. The last year in Treasure Valley real estate has felt a lot like that climb, as median home prices continue to log double-digit increases, leaving everyone to wonder, “how high will this ride go?”
In January, home prices in the Boise Metro area once again set new records as frenzied buyers fought over scant inventory, driving up already historically high prices. The median single-family home price in Ada County hit $449,330 in January, closing in on the $450,000 mark for the first time. That’s an increase of 23.78% or $86,000 in just 12 months.
- The Canyon County median home price jumped to $339,000. That’s an annual increase of 33.36% in an area long considered to be the most affordable in the Treasure Valley.
- In Boise, the typical house price hit a new record of $433,250, up 22% since last year.
- Meanwhile, the median price of Nampa homes has jumped a staggering 37.19% in the past year. Eagle homes have increased by 35.87%. Meridian home prices have gone up 20.79%.
And we’re not off this ride yet.
Bidding Wars Break Out Over the Lowest Inventory on Record
Imagine you line up to ride the world’s tallest roller coaster only to find out that riders outnumber available seats 15 to one. Instead of paying the asked-for ticket price, people are loudly outbidding each other for a chance to ride. That’s what being a homebuyer in Boise feels like right now.
The supply of available homes in the Treasure Valley is at the lowest levels ever recorded. As a reminder, a balanced market – one that doesn’t favor buyers or sellers – means having a supply of between three to six months’ worth of homes for sale.
Ada County currently has a 0.31 month supply (or about 9 days) of active inventory. Canyon County has a 0.34 month supply (roughly 10 days).
In Boise, there is only a 0.22 month supply (or about 7 days). For context, that’s only 314 active listings in a city with a population of over 236,000 – and growing.
Two main factors are keeping our supply depressed: low interest rates and increased demand. To be clear, demand for homes in the Treasure Valley was strong before the start of the coronavirus pandemic. Since the pandemic, it has become unrelenting, as locals and out-of-state buyers scramble for more square footage that will allow them to work from home and raise families in varying states of quarantine.
All of this points to the exceedingly rare occurrence we find ourselves in: year-over-year sales declined 19% in January, despite feverish demand. With fewer homes on the market, there were simply fewer sales.
Homes Sell Over Asking Price Within Days, Even Hours, of Being Listed
In a balanced market, homes typically sell for less than their asking price, as buyers have other options to choose from. This gives them leverage to negotiate. But when there are 5-15 potential buyers vying for every house, prices can be pushed up rapidly.
That’s what we’re seeing in the Treasure Valley. With so little inventory, many homes are selling in an eye-wateringly short amount of time – days, even hours, after being listed. It also ensures most homes receive multiple offers. This means that the ultimate selling price often exceeds the initial asking price – in some cases, by tens of thousands of dollars.
The city of Eagle is a striking example of this. Last month, the median home in Eagle sold for 110% of its asking price. If we rewind a year ago to January 2020, the city’s median home price had just set a (short-lived) record of just under $550,000. This amount was about $500 less than the typical seller’s asking price.
But over the last 12 months, the total number of homes for sale in the city of 31,000 people dropped from 197 to less than 20. During that same time period, the time it took for a typical Eagle home to sell fell from 72 days to a mere 5 days.
Sellers embraced their superior bargaining position by pushing the median asking price for a home in Eagle up to $674,949 in January. This amounted to a $125,000 increase from the year prior. And yet even that did little to deter potential buyers, who collectively offered $75,000 more than even that, driving the median sold price up to $746,442.
The result? Eagle home prices have increased by nearly $200,000 in 12 months’ time.
The question on everyone’s minds is, “how long can this continue?” The answer is, as long as interest rates remain low and inventory remains constrained, you can expect to see bidding wars for every reasonably priced property.
Boise Real Estate Market Summary for January 2021
- Median list price - $427,750 (up 20.53%)
- Median sold price - $433,250 (up 22.08%)
- Price per square foot - $249 (up 23.27%)
- Total home sales - 218 (down 59)
- Median days on market - 4 days (down 22 days)
- Available homes for sale - 0.22 month supply (down 0.51)
- 30-year mortgage rates - 2.74% (down 0.88)
Boise Metro Housing Markets by Area
Median sales price:
- Ada County - $432,462
- Eagle - $746,442
- Garden City - $335,000
- Kuna - $430,000
- Meridian - $434,720
- Star - $460,000
- Canyon County - $339,000
- Caldwell - $307,000
- Middleton - $342,500
- Nampa - $342,961
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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Information in this We Know Boise market report was obtained from the Intermountain MLS (IMLS) on February 5th, 2021. Deemed reliable but not guaranteed. City data refers to single-family homes on less than one acre, while county data includes homesites of all sizes. Current inventory is calculated on a twelve-month rolling average. Combining existing homes for sale with new construction is the best way to gauge current home prices and Boise housing market trends. New house prices are much more volatile and can create unreliable comparisons, particularly on a month to month basis.