Treasure Valley Home Prices Head Lower Despite Dwindling Supply
Posted by Lisa Kohl on Friday, January 6th, 2023 at 2:02pm
Treasure Valley home prices remain on a downward trend despite a rapidly shrinking supply of homes for sale.
Median home prices declined 5.7% in Ada County and 7% in Canyon County for the year ending in December.
In 2022, home prices remained positive on a year-over-year basis until November before ultimately finishing the year lower than where they had begun. This marked the first time since 2010 that home prices ended the year lower than where they started.
In January, the average 30-year mortgage rate was just over 3%. However, by the end of December, it had risen to 6.42%. This represents the largest increase for any calendar year on record.
The dramatic rise in rates shocked the system, ending the pandemic-driven housing boom. For some buyers, high prices and escalating interest rates meant they could no longer afford homes. Others moved to the sidelines to catch their breath and reassess. This resulted in a dip in home sales, bringing them down to 2014 levels.
Despite the large drop in demand in the last half of the year, the supply of available properties has declined even further—falling 40% in Ada County since August.
The number of newly listed homes plunged to multiyear lows in December. Also, the fact that there were fewer new listings than sales during the month suggests that demand may start to outpace supply.
With few new listings, months' supply of homes for sale in Ada and Canyon County fell to 2.07 and 2.32 months, respectively, well below the 4 to 6 months of supply traditionally considered a balanced market (one neither favoring buyers nor sellers).
Although it is not unheard of to experience brief periods of falling prices and decreasing inventory, especially during the holiday season, it is not a sustainable trend in the long term.
It is typical for inventory to reach its lowest point in January, so it will take several months to see how this trend plays out.
Mortgage rates may also begin to moderate now that it appears inflation may have peaked.
We are likely to see a seasonal climb in demand in the next few months. If there is no significant increase in new listings, home prices will likely either plateau or even rise.
However, you should take all market fluctuations this time of year with a grain of salt. Few sellers tend to offer their homes for sale between November and January; likewise, many buyers shift their searches into low gear.
Traditionally, buyer demand increases in February, and sellers begin listing their properties in March. However, there are signs that home buying demand has slightly increased in recent weeks, suggesting a pickup in sales.
The question is whether prices follow.
Boise Real Estate Market Summary for December 2022
- Median list price - $499,900 (down 2.9%)
- Median sold price - $485,000 (down 4.9%)
- Price per square foot - $273 (down 5.2%)
- Total home sales - 238 (down 169)
- Median days on market - 25 days (up 16 days)
- Available homes for sale - 1.54 month supply (up 1.04)
- 30-year mortgage rates - 6.36% (up 3.26)
Treasure Valley Housing Markets by Area
- Ada County: $515,000, down $31,000 (-5.7%)
- Eagle: $780,000, down $63,375 (-7.5%)
- Garden City: $407,500, down $161,000 (-28.3%)
- Kuna: $488,088, up $13,093 (2.8%)
- Meridian: $490,000, down $77,445 (-13.6%)
- Star: $579,510, up $34,520 (6.3%)
- Canyon County: $390,000, down $29,480 (-7%)
- Caldwell: $351,283, down $33,667 (-8.7%)
- Middleton: $586,100, up $54,990 (10.4%)
- Nampa: $399,495, down $15,495 (-3.7%)
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.
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Select information in this We Know Boise market report was obtained from the Intermountain MLS (IMLS) on January 6th, 2023, 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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