We Know Boise Real Estate

Treasure Valley Home Prices Climb Amid Robust Demand, But Rising Rates Loom

Posted by Lisa Kohl on Thursday, May 9th, 2024 at 1:58pm

Idaho Capitol Building surrounded by spring foliage, representing local market conditions in Treasure Valley real estate.

Robust demand and scarce supply have driven up home prices in the Treasure Valley this spring. However, rising mortgage rates threaten to dampen the enthusiasm.

May is typically one of the busiest months in the housing market, as families with school-aged children aim to relocate before the new school year begins.

The median price of a single-family home in Ada County rose by 7.5% year-over-year to $556,500 in April, up slightly from March. Boise home prices climbed to $525,000, a 5% increase compared to the previous year. In Canyon County, prices ended the month at $429,995, up 10.3% from April 2023, the highest since October 2022.

As prices have risen this year, bidding wars have become less frequent. However, fairly priced, move-in-ready homes continued to sell quickly in April. In Ada County, the typical home spent just 14 days on the market before receiving an offer, down from 21 days in 2023. In Boise, homes sold in a brisk six days, while in Canyon County, days on market remained steady at 24.

Despite interest rates nearing multi-decade highs, home prices have remained remarkably resilient. According to the Milken Institute, wages in Boise jumped by 62% from 2017 to 2022, making it the fourth fastest-growing major metropolitan area.

The Community Planning Association of Southwest Idaho estimates that the Treasure Valley's population has increased by nearly 100,000 residents since 2020. This influx, coupled with rising wages, has strengthened the demand for homes in recent years, while the supply has remained frustratingly low.

Many homeowners are locked into low mortgage rates, while many others, particularly Baby Boomers, are choosing to stay in their homes longer, reducing the number of resale properties available. This low inventory cycle perpetuates itself, as sellers hesitate to list their homes when unsure where to move next.

Despite a solid start to the year, recent weeks have seen signs of softening demand as supply has ticked higher and mortgage rates have moved back above 7%.

After a brief dip at the start of the year, rates have steadily climbed, with 30-year mortgages ending the week of May 9 at 7.09%. Homes typically go under contract one to two months before the sale closes, meaning April's sales data reflects purchase decisions made when rates were lower than now.

Thanks to a 31% increase in the number of homes for sale, the Treasure Valley began May with a 2.37-month supply, up from 1.67 months last year. Partially due to the lack of resale homes and partially due to slowing demand, new construction now comprises nearly half of all available listings—a record amount.

Rising rates directly affect affordability, and they also have a psychological impact, causing some potential buyers to pause and reassess their plans. Mortgage applications hit a 28-year low last October when rates approached 8%.

We are now halfway through the important spring home-buying season, which runs from March until June. While seasonality isn't as pronounced as it once was, sales still typically peak during these months.

It's still too soon to gauge the full effects of rising rates. Much will depend on how high they climb and when they start to decline. However, buyers are beginning to push back against rising home costs.

A slowdown in buyer traffic has left some builders with excess inventory. In response, even some mid- and high-end builders have begun offering purchase incentives again, such as interest rate buy-downs.

Although sales have improved compared to last year, demand is still historically low. Even a slight dip could cause appreciation to stall, especially since supply is higher than last year and has yet to peak.

In 2023, May was the best month to list a home for sale, while in 2002, it was March, both coinciding with mortgage rates near yearly lows.

The market still favors sellers; however, it's worth noting that April's data is backward-looking and reflects first-quarter conditions. As of early May, supply appears to be ramping up just as demand is tapering off, giving buyers more negotiating power.

If you're considering selling your home this year, remember that the spring selling season is already in full swing. The best advice is to set a price the market would find competitive. That doesn't mean "giving it away," but it also doesn't mean shooting for the stars. The goal is to capitalize on current demand while it's still strong.

Graph of median home prices in Ada, Canyon Counties, and Boise, ID, indicating a sharp increase.

Boise Real Estate Market Summary for April 2024

  • Median list price: $525,000, up $25,000 (5%)
  • Median sold price: $525,000, up $25,000 (5%)
  • Average price per square foot: $314 (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

  • 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%)

Boise Real Estate Agent Lisa Kohl

Lisa Kohl

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.

Email Lisa

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Select information in this We Know Boise market report was obtained from the Intermountain MLS (IMLS) on May 8th, 2024, and is 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. Months of supply is calculated on a 12-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 can be more volatile and can make comparisons, particularly on a month-to-month basis, less reliable.

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