We Know Boise Real Estate

Rising Supply, Tepid Demand: Treasure Valley Market Toughens for Sellers

Posted by Lisa Kohl on Saturday, June 15th, 2024 at 12:23pm

Seller Concessions Increase Amid Rising Supply and Tepid Demand in Treasure Valley Real Estate Market

Rising home prices, elevated interest rates, and a growing supply are contributing to slowing demand for all but the best-priced properties.

As competition intensifies, sellers have started offering more concessions to attract buyers, ranging from interest rate buydowns to assistance with closing costs.

In Ada County, the median home price is now $551,950, a 3.3% increase from last year. Boise saw a bigger jump, with prices rising 7.4% to $537,000. Canyon County's prices rose slightly to $419,900, a 1.2% increase from last June.

Falling rates at the end of last year spurred a rush of interest from homebuyers at the beginning of this year. Combined with a limited supply, this surge pushed prices to a two-year high. However, rates rose throughout the first part of the year, peaking close to 7.5% in late April. Since then, mortgage rates have fallen slightly and are now hovering around 7%. The combination of higher rates and rising prices has reduced affordability, softening demand.

Many homeowners had expected rates to fall this year and delayed selling their properties last year. While the supply of resale homes is still constrained, some of these homes are now entering the market. The inventory of active listings in the Treasure Valley increased to 2,685 at the beginning of June, up 42% from a year ago.

Builders, who also anticipated a falling rate environment, overestimated demand, adding to the supply of homes for sale. Currently, new construction listings comprise 41% of all homes on the market, a near-record level, and builders haven't shown signs of slowing down. The number of building permits filed in April in Ada County rose 156% from the previous year.

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. Last year, sellers could price their property a little high and still get offers. This year, homes that are even slightly overpriced receive few, if any, offers, while homes priced conservatively are still selling relatively quickly.

Months of supply rose to 2.59 in Ada County and 3.02 in Canyon County, still shy of the 4 to 6 months typically considered a balanced market. Although the Treasure Valley market still favors sellers, buyers might find more room to negotiate on price and terms as conditions gradually shift.

As the market moves toward a more balanced state, sellers are increasingly willing to offer concessions. Prospective purchasers should look for opportunities to negotiate interest rate buydowns, assistance with closing costs, or other incentives.

As we head into the second half of the year, buyers can expect to find more to choose from, giving them more negotiating power and putting them on more equal footing with sellers. Inventory is still relatively low, and prices remain above last year's levels, both of which benefit sellers. A decline in interest rates, which (finally) looks likely, would benefit everyone.

Chart showing Treasure Valley median home prices from May 2023 to May 2024, fluctuating slightly with a general upward trend.

Boise Real Estate Market Summary for May 2024

  • Median list price: $539,900, up $39,901 (8%)
  • Median sold price: $537,000, up $37,100 (7.4%)
  • Average price per square foot: $317 (down 1%)
  • Total home sales: 315 (up 22)
  • Median days on market: 8 days (up 1)
  • Available homes for sale: 2.03 month supply (up 0.55)
  • 30-year mortgage rate: 7.06% (up 0.63)

Treasure Valley Housing Market by Area

  • Ada County: $551,950, up $17,500 (3.3%)
  • Eagle: $867,490, down $52,510 (-5.7%)
  • Garden City: $599,450, up $104,450 (21.1%)
  • Kuna: $457,990, up $26,990 (6.2%)
  • Meridian: $550,000, up $20,000 (3.8%)
  • Star: $550,000, down $50,000 (-8.3%)
  • Canyon County: $419,900, up $4,900 (1.2%)
  • Caldwell: $391,595, up $25,540 (7%)
  • Middleton: $469,588, down $40,412 (-7.9%)
  • Nampa: $417,500, down $7,500 (-1.8%)

Boise Real Estate Agent Lisa Kohl

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.

Email Lisa

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Select information in this We Know Boise market report was obtained from the Intermountain MLS (IMLS) on June 11th, 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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