- Median List Price $269,900
- Median Sold Price $269,850
- Days on Market 19
- Total Sold 862
We have seen year over year metro Boise housing market inventory decline for 38 months in a row. While this trend won’t continue indefinitely, it will take a lot of new inventory before we see a balanced real estate market.
While there has been a lot of talk lately about potential home sellers “holding out”, the reality is there just isn’t that much hidden inventory. We have seen a long-term trend of people staying in their homes longer (averaging around eight years) and choosing to remodel rather than sell. If you love where you live, why move?
Sales of existing single-family homes have increased for each of the last four years and are currently averaging 935 per month, which is close to the long-term average in Ada County.
Having said that, there is a concern among some homeowners that if they sell their current homes, they won’t be able to find anything else. That is more of a misconception than a reality. In fact, we haven’t had one local seller give up because they couldn’t find anything else to buy.
While many people may decide to downsize at some point in their lives, few move from large properties to starter homes. Which would be tough in this market.
Starter Homes Will Continue to Be in Short Supply
Lower priced houses are in very short supply. The key to purchasing a home right now is to know what you want and be prepared to make a quick decision. Lines for showings and bidding wars for the most desirable properties are commonplace. Presenting a clean offer is the key. Don’t expect the seller to pay for everything or give a long list of demands.
In Ada and Canyon Counties, we are on track to complete 3,760 new construction houses compared to the 3,415 that were built in 2016. In 2018 the number will increase further. Although, higher land prices, labor shortages and to a smaller degree, raw material costs, will prevent any significant increase in local construction.
Each year, between 2009 and 2016, 1600 new homes were built in Ada County or 1,100 per year short of new housing demand. Nationally you hear a lot of talk to the effect that “if the builders would build more” it would help with supply and demand particularly when it comes to first-time buyers. Realistically, there is no way we can affordably make that up. Simply put, builders can’t build next years homes at last years prices.
There are two significant changes currently being proposed that would impact the real estate market. The first would limit the mortgage interest deduction to $500,000 vs. the current $1,000,000 limit. The other would limit the ability to deduct state and local property taxes from federal returns.
Locally, the direct impact would be relatively small, about 4-6% of real estate purchases. In the last twelve months, there were 12,196 to sales in Ada County (all property types) 852 of which were over $500,000
Combined with the fact that Idaho property tax rates are 36.5% below the national average, a tax increase on higher priced states (lowering affordability) would make the Boise real estate market look even more appealing.
This year we saw the highest appreciation in the lowest priced single-family home markets, in 2018 that trend will continue. First-time home buyers are moving to where budgets will go the furthest and the selection is greatest.
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For the last two years, there have been predictions of mortgage rates heading higher. It remains to be seen if that will happen this year, but it will happen at some point.
Keep this in mind. Today, for $1,000 a month (with 10% down at 3.90%) you can purchase a $236,000 home. In 2006 the average mortgage rate was 6.41%, that same $1,000 would allow for $178,000 home purchase.
The average rent in Boise is $1,289 for a single-family house which is higher than the typical mortgage payment. With low mortgage rates- choosing to buy a home instead of renting makes sense for most people.
The average price per square foot for Boise is $149, an increase of 9.56 percent compared to the same time last year. November Boise housing market summary:
NOTE: Information in this market report was obtained from the Intermountain MLS (IMLS) on December 8th, 2017. Deemed reliable but not guaranteed. All information refers to single-family homes. Current inventory is calculated on a twelve-month rolling average. We believe existing homes for sale are the best way to gauge current Boise home prices and Boise housing market conditions. New construction home prices are much more volatile and tend to exaggerate the numbers, particularly on a month to month basis.