Relentless demand, combined with a seasonal slowdown in new listings, sent Ada County home prices to a new record in December.
The median single-family home price in Ada County rose to $546,000 in December. Climbing nearly $114,000, or 26%, from the previous year, it marks a new peak.
Idaho’s most populous county is not alone. Home prices have made double-digit jumps throughout the Treasure Valley.
- Canyon County home prices rose $80,000 through 2021, ending at $419,480. That’s a 23% year-over-year leap and just $4,000 below the record.
- Boise home prices tied August’s record of $510,000, an increase of nearly $90,000 (21%) from just twelve months ago.
- Meridian’s prices rose to their second record in as many months, finishing December at $567,445, a 32% yearly increase.
- Eagle homes surged to $843,375, rising $280,000, or 49%, from last December.
- In Nampa, home prices rose $78,000, ending 2021 at $414,990.
With month-to-month hikes leaving buyers gawking, there’s one constant the market has gotten used to: there is more demand for homes than there are places to live.
Ada County’s supply of homes for sale declined to 0.62 in December, down from 1.01 in November. Canyon County isn’t faring much better, down to 0.99 from 1.26. The minimalist market continues to favor sellers, pointing to a fierce 2022 and little relief for exhausted buyers.
Boise Real Estate Continued to Thrive Through Year Two of the Pandemic
When Covid-19 first checked in to its extended stay at the start of 2020, many believed it would help steer Boise’s market back to a manageable balance.
Contrary to what we all thought, the exact opposite happened.
Instead, homebuyers flocked to Boise, leaving overcrowded and overpriced areas for the affordability of Idaho’s largest city. Instead of prioritizing proximity to their metro offices, the change to a work-from-wherever-week allowed employees to leave their cramped cities.
According to the Bureau of Labor Statistics, nearly 1/4th of employees worked from home in February 2021.
Boise’s minutes-away outdoor scene, larger homes, lower cost of living, metropolitan amenities, and comparable affordability were a beacon to everyone fleeing their close-quarters, pandemic-riddled cities. With more space to accommodate at-home learning and quarantine life, Idaho’s population grew 2.9% last year, the fastest pace in the nation, according to the U.S. Census Bureau.
This staggering increase pushed even harder on an already-strained housing market. With the help of historically low mortgage rates, the demand for Boise real estate reached a tipping point as supply continued to dwindle.
Part of the blame for low inventory falls to a lack of new home construction. Every year since the 2007-09 recession, the number of new homes built in the Boise area has been far below growth needs. Add in three years of unprecedented population growth, and our estimates show the Valley is underbuilt by 15,000 new homes.
Prior to the pandemic, builders were already struggling to catch up to the relentless demand. Covid-19 threw a whole toolbox of wrenches into an already suffering sector.
The pandemic saddled builders with rapid increases in material costs, serious supply chain delays, labor shortages, and a severe lack of affordable lots to build on.
Typically for new construction homes, builders would contract with home buyers and determine a sales price prior to breaking ground. With the rise in building costs and skyrocketing appreciation, move-in day home value often dwarfed original price.
As a result, many companies changed how they do business this past year. Most now wait until homes are nearly finished before contracting, allowing them to settle on a price closer to market value.
The massive discrepancy between buyer demand and available new and existing home supply sent prices sky-high. Historically, a balanced market yields an average of 4% in yearly appreciation, not a steady streak of double-digit increases.
Drinking From a Dry Well: Available Inventory Has Evaporated
In September 2021, Ada County home supply peaked at 1.39 months—just shy of a month and a half of inventory.
While that might seem notable, a balanced market has between four-to-six months of inventory.
During the financial crisis of 2006-08, prices didn’t top out until supply rose to five months – and then they flattened out for more than a year while inventory surged. Prices finally began dropping when supply hit around eight months.
September’s late-year supply bump brought the end of month-by-month record-breaking numbers—but that didn’t mean prices dropped. Homes were still selling for more than listing price, and in Ada County, the September median single-family residential price was only $5,000 below July’s record of $540,000.
The “slowdown” in Treasure Valley price appreciation was due to a lack of supply, not a decrease in demand.
In Ada County, an area with over half a million residents, homes for sale declined by half of September’s surge, ending at just 954 (0.62 months supply).
With devastatingly low supply and unrelenting demand, Ada and Canyon County are entering year three of an extreme housing situation.
Yet, there’s good news for buyers and sellers.
Even with the local market seeing an unsustainable 20% appreciation over the last couple of years, things are beginning to dip down from that glass ceiling high-point.
That’s not to say prices are going to dip, but instead of Olympic-level leaps, expect the next 12 months to show a gradual return to a steady walking pace we experienced before the pandemic. The Treasure Valley is still growing, and demand is still high, but the once-in-a-generation numbers are losing momentum.
A year ago, buyers were battling against 10-15 potential purchasers. Today’s bidding wars are now between 3-4 buyers (a result of competition finding homes or getting priced out).
That said, home supply remains extremely low going into January 2022, which means well-priced homes will go fast in this fiercely competitive market.
Year-Over-Year Boise Real Estate Market Summary Dec. 2020 - Dec. 2021
- Median list price - $515,000 (up 24.86%)
- Median sold price - $510,000 (up 21.43%)
- Price per square foot - $288 (up 21%)
- Total home sales - 406 (up 26)
- Median days on market - 19 days (up 14 day)
- Available homes for sale - 0.50 month supply (up 0.28)
- 30-year mortgage rates - 3.10% (up 0.42)
Year-Over-Year Median Sales Price for Boise Metro Housing Markets by Area
- Ada County - $546,000
- Eagle - $843,375
- Garden City - $568,500
- Kuna - $474,995
- Meridian - $567,445
- Star - $544,990
- Canyon County - $419,480
- Caldwell - $384,950
- Middleton - $531,110
- Nampa - $414,990
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 January 6th, 2022. 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.