Boise Home Prices Reach Two-Year High as Market Gains Speed
Posted by Lisa Kohl on Saturday, April 6th, 2024 at 12:18pm
Ada County home prices are surging as rising competition for scarce listings sends buyers scrambling. With robust demand and historically low inventory, 2024 is already turning out to be a good year for home sellers.
The median home price in Ada County at the end of March was $555,000, up 15.2% from the previous year. This increase represents the largest yearly gain since May 2022, the same month the county hit a record.
Home prices in Boise also experienced double-digit growth, jumping 13.4% to $529,990, the highest price since June 2022. In Canyon County, prices rose by 4.7% from a year ago to $413,395.
Demand from buyers less sensitive to interest rates, combined with a limited supply of homes on the market, is driving above-average growth in home prices this spring.
Although the number of available homes for sale has gradually increased, it remains at levels typically seen in extreme seller's markets. As a result, buyers are finding fewer options than they had hoped for and facing bidding wars for the most desirable properties.
30-year mortgage rates fell to 6.82% last week, a nearly 1% drop from last October's multidecade high. After a dip last fall, interest from buyers came roaring back at the end of December as mortgage rates eased.
In April, the Treasure Valley had enough houses for sale to last just over two months. An inventory level this low typically leads to solid price increases, usually in the mid to high single digits.
The availability of existing homes is particularly low. Many homeowners with mortgage rates much lower than current levels are understandably hesitant to give up their low-cost loans, a reluctance often referred to as the "lock-in" effect.
Additionally, the average time people stay in their homes before moving has almost doubled in the last two decades. This trend is largely driven by older homeowners who prefer to age in place. When combined with the widespread relocation that occurred during the pandemic, it's clear that many current homeowners feel no need or desire to move again.
Despite the elevated demand and low supply of homes, home builders in the Treasure Valley have struggled to keep pace with new construction. In addition to the scarcity of building lots, a shortage of construction workers has led to soaring wages in the industry.
Our area has been dealing with a labor shortage for years, which some predict is about to get worse. This shortage could further slow the construction of new homes and potentially drive up prices for those that are built.
Wayne Hammon, CEO of Idaho Associated General Contractors, estimates that construction industry wages grew 15–20% in 2023 and are expected to spike an additional 20–25% in 2024.
It should come as no surprise that properties priced right are selling quickly. In March, homes in the Treasure Valley were selling notably faster than in the previous year. The typical home was on the market for just 31 days—about four times faster than what is usually seen in a balanced market.
Buyers are flocking to updated homes with nearby amenities, but only if they are priced competitively. Rising home prices and elevated mortgage rates have sent monthly mortgage payments to near-record highs, stretching budgets and making buyers particularly sensitive to overpaying.
As a result, they would rather put an offer on a reasonably priced home with another offer on it than on a property they feel is clearly overpriced.
Last March marked a low point in local home prices, making year-over-year comparisons relatively easy, so the pace of price increases will slow going forward. However, barring a sharp rise in unemployment or a substantial increase in the supply of homes, prices will likely continue heading higher.
Boise Real Estate Market Summary for March 2024
- Median list price: $530,000, up $55,000 (11.6%)
- Median sold price: $529,990, up $62,495 (13.4%)
- Average price per square foot: $316 (12.5%)
- Total home sales: 223 (down 35)
- Median days on market: 11 days (down 14)
- Available homes for sale: 1.39 month supply (up 0.29)
- 30-year mortgage rate: 6.82% (up 0.28)
Treasure Valley Housing Market by Area
- Ada County: $555,000, up $73,100 (15.2%)
- Eagle: $725,000, down $57,400 (-7.3%)
- Garden City: $417,500 (*fewer than ten sales)
- Kuna: $457,000, up $72,000 (18.7%)
- Meridian: $534,990, up $77,745 (17%)
- Star: $567,497, down $32,503 (-5.4%)
- Canyon County: $413,395, up $18,395 (4.7%)
- Caldwell: $389,900, up $30,160 (8.4%)
- Middleton: $431,166, up $6,166 (1.5%)
- Nampa: $421,479, up $22,529 (5.6%)
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 April 6th, 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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