Treasure Valley Home Prices Flat on Sudden Drop in Supply
Posted by Lisa Kohl on Monday, November 8th, 2021 at 10:25am
Home prices in both Ada and Canyon Counties remained virtually unchanged from September. Continued strong demand from buyers and a decline in the supply of homes for sale is keeping upward pressure on prices.
In Ada County, the median single-family home price rose to $533,950, up $124,000, or 30%, from October of 2020. In lower-cost Canyon County, prices rose to $423,445, up just over $102,000, or 32%, notably just missing a new record by $550. In both counties, home prices are below the highs set over the summer, but both finished the month higher than August.
Most years, the local housing market follows a seasonal trend: Prices and inventory tend to rise in the spring and summer months before falling in autumn. Of course, as with many other things, 2020 turned out to be a major exception. Instead of a leisurely decline starting in September, home price appreciation accelerated throughout the fall, with home prices' not peaking until December.
The valley's most popular submarkets showed a similar trend, as follows:
- Boise's median home price rose 27% to $499,900 in October (the second-highest price on record). That's a $105,000 jump from last year.
- Meridian just missed last month's sales record with $545,900. That's $146,000 over last October's sales price, or a 36% increase.
- The sale price in Nampa set a new record with $425,500. That's an increase of $104,510, or just under 33%.
- The cost of a home in Eagle rose to $786,180. That's an increase of nearly $224,730, or 40% from the year prior.
To put those price changes into context, local home price appreciation has averaged less than 5% over the long term.
Despite continued demand from buyers, the number of new listings for previously owned homes in Ada County declined 20% in October. Over the summer, resale listings rose considerably compared to 2020, but the trend reversed itself last month. At the same time, move-in-ready new construction listings dropped to just 97.
The total number of homes for sale in Ada County declined for the first time since March, from 1,270 last month to 1,184. Based on current sales trends, that pushed the supply down to 1.32 months from 1.39 at the end of September. In 2020, the supply fell to just 0.35 months, the lowest ever recorded for this time of year. To reach a balanced market based on current demand, the supply of homes for sale in the county would need to rise to between 3,800 and 5,200 listings (a four- to six-month supply).
The number of active listings in Canyon County also declined during the month from 781 to 734, pushing the supply of houses for sale down from 1.57 months to 1.48 months. A year ago, the supply had fallen to 0.33, the lowest on record for any time of year.
In contrast to what we saw earlier in 2021, a July dip in mortgage rates coupled with a greater supply of homes to choose from pulled buyers off the sidelines. In spring, some buyers, facing a lack of inventory and fierce competition, had essentially given up, deciding to wait it out.
Led by rising asset values and stock market gains, demand has soared at the top of the market. Year to date, the number of Ada County homes sold priced above $1 million has risen two and half times compared to the same time last year.
A slow decline in the supply of homes for sale is typical for this time of year. Rising or flat home prices aren't.
National Home Sales Surged in September
The latest report from the National Association of Realtors showed existing home sales jumped 7% in September from August. Total sales rose to 6.29 million, the highest level since January. Historically, seasonal trends typically result in fewer sales leading into the fall months.
Mortgage purchase applications, which tend to be a strong predictor of future sales, rose to the highest level since April. Additionally, a rise in demand and a limited number of homes for sale pushed supply down to 2.4 months, also the lowest level since April.
While it's too soon to tell, the acceleration in sales combined with a jump in applications points to an autumn season that "looks to be one of the best autumn home-sale seasons in 15 years," according to NAR's chief economist.
Nationally, the median existing-home sales price for all housing types rose 13.3% in September to $352,800. The median price in the West region (which includes Idaho) was $506,300, up 8.3% from September 2020.
The average 30-year fixed-rate mortgage finished the first week of November at 3.09%. While still near 50-year lows, rising inflation fears have pushed rates higher over the last month. The Mortgage Bankers Association is forecasting that rates will increase to 4.0% by the end of 2022. Slowly but surely, rates are headed higher.
Boise Real Estate Market Summary for October 2021
- Median list price - $499,000 (up 27.95%)
- Median sold price - $499,900 (up 26.56%)
- Price per square foot - $298 (up 25.7%)
- Total home sales - 419 (down 80)
- Median days on market - 11 days (up 6 day)
- Available homes for sale - 1.22 month supply (up 0.92)
- 30-year mortgage rates - 3.07% (up 0.24)
Boise Metro Housing Markets by Area
Median sales price:
- Ada County - $533,950
- Eagle - $786,180
- Garden City - $414,062
- Kuna - $465,495
- Meridian - $545,900
- Star - $563,249
- Canyon County - $423,445
- Caldwell - $393,945
- Middleton - $451,445
- Nampa - $425,500
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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Information in this We Know Boise market report was obtained from the Intermountain MLS (IMLS) on November 8th, 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.
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