WHAT? NO MORE MULTIPLE OFFERS IN THE BOISE HOUSING MARKET?

Well…that’s a little dramatic, there are still some multiple offers happening, but things have made a rather sudden change in the last month in the Boise housing market.

So I’m sure you’ve seen it, tons of price drops in the Boise area housing market, inventory increasing, days on market increasing, people are wondering, are we finally seeing a crash in the Boise housing market? We are seeing adjustments for sure, but a crash? I don’t think so, and we all know that the numbers don’t tell you the whole story, so while we will start with the recent September 2021 market stats to make sense of what we are seeing, I’ll fill in those details with new answers of what we are seeing as we are out working with clients just like you every day. 

I will go over why now is a good time to buy and still a good time to sell, but first, let’s get those general numbers out of the way.

Starting with Ada County, which includes Boise, Eagle, Star, Meridian, and Kuna, the median sales price for homes in Ada county inched up from August to $534,950 in September 20 21- that is a 31.1% increase from last year, but only a .8% increase from August.

Canyon county, which includes places like Nampa, Caldwell, Middleton, and surrounding areas, had a similar increase to a median sales price of $422,000, which was 36% higher than last year.

So it will be interesting to see if the price drops we are seeing now will also drop that median sales price next month or not. And if you’ve been watching the market, you’re seeing those drops, but what is causing it? Well numbers wise, it all goes back to inventory and demand, so let’s take a quick look at how they got so high in the first place.

So we all know demand was high and inventory was extremely low, which led to insane competition and buyers being willing to pay over list price, and those bidding wars were the largest factor in driving up prices.

This is key to prices rising rapidly or adjusting to a more steady rate:

According to the Boise Regional Realtor® association, when the share of homes that sold over list price exceeded 40% in August 2020, the median price moved to $400,000, and when it reached nearly 65% in May 2021, prices exceeded the $500,000 mark. Well guess what? In September the share of homes in the Boise housing market that sold for over asking price dropped to 33.1%. The lowest level since June 2020. So there are still homes selling for over asking… but not as many..and that is dropping rapidly.

Phew!

Does this mean an eminent crash in the Boise housing market? No, but we are having corrections.

Homes that are over priced and don’t show well are having those big price drops, while homes that show beautifully and are priced correctly may still get multiple offers, but generally those offers are staying closer to $5,000-$20,000 over instead of the $50,000-$100,000 like we sometimes were seeing.

So how’s the inventory now? Well in Ada county, September marked the six consecutive month of inventory growth. The 1,249 homes available at the end of September was an 11% increase from August, and a 165.7% increase from September Of 2020. And the time a house is on the market has increased to 17 days, which is the longest in a year as well. But 1,249 homes on the market is still considered low inventory…it’s an inventory of just 6 weeks.

So what’s adding to the increased inventory? Well we’ve got sellers who realize this is a great time to sell, and when demand was high, they didn’t stand a chance if they needed to buy a new home with a contingent offer, but they now realize they may actually have a chance at downsizing or upsizing as we have less competition. In fact we are seeing a large increase of sellers being willing to accept a contingent offer, especially if you are willing to pay asking price or above to overcome the risk of a contingency.

We have less demand which is due to a few factors. Last fall, people’s children were all doing online schooling, so there was no traditional slow down with the starting of the school year, this fall was class as usual, so we had the typical fall drop in demand due to the school year. Another major factor is, of course, affordability. We’ve had many people who let us know that although they love the idea of moving to Boise, they are looking for somewhere with more affordable housing, like the Midwest and southern states. And now those states are seeing the huge price increases Boise did as people shift their attention elsewhere. And if you are thinking about other states in the Midwest or the south, just remember to consider the quality of life, access to family in the west, and all of those factors that can often be more important than finding a less expensive home.

And a third thing affecting all the supply and demand of existing homes that the numbers can’t tell you is people’s feelings about our current Covid era, people are shifting to move closer to family as they worry about tightening travel restrictions while others are willing to move farther away from places that have restrictions they don’t like.

And finally a fourth factor is that we have fewer investors who were looking for short term equity increases as our market shifts and also as they don’t want to be finding renters in the winter. 

So is the market crashing? Well with some homes selling For over asking and an inventory of just six weeks, along with 17 days on market, it’s still a strong sellers market. But only if sellers are willing to price and prepare properly. As a buyer, this is actually a great time to buy as interest rates are still low, and you may not have multiple offers to contend with. And keep in mind that if prices drop more but interest rates rise, your house payment could actually be more on a less expensive home.

How about an update for new construction in the Boise Housing Market?

Oh and before I forget, I wanted to update you on new construction. Oh boy, new construction is having many issues, inventory is also up and if you want new construction you’ve got two options. 

1.Buy a brand new spec home that’s already completed and this is actually a great option as it is speculated that new construction prices will continue to rise due to the land price increases and the supply chain problems.

Or 2. Put on some big adult pants, pull them up, and be prepared for delays, replacement of items, items out of stock, possibly closing with things not finished, between Supply chain issues, manufacturing issues, labor shortages, increased times for county permits, you certainly can build new, but just be forewarned, it’s not for the faint of heart.

So what are my predictions for the upcoming six months of the Boise housing market? I think we will continue to see adjustments through the fall and winter, but I have talked to many people who are unhappy with the more strict mandates being implemented in their states and are planning to move here next spring and summer when school is out again, and those people will be moving here next spring. So I don’t expect to see 30% year over year price increases again, and upticks will probably start again next spring, but hopefully at a steadier rate. Of course If we have a super snowy or long winter, that can affect things or if we have a mild short winter, that can affect the market as well. Interest rates will play a factor, as well as politics, and national economics, so there are quite a few variables, (and how will the rapid inflation effect the Boise housing market by next year??) but I can say that now is still a great time to sell, and has transitioned into being a pretty good time to buy as well.

Hey you may even get a contingency offer excepted, so that’s pretty good!

If you want more info about living in the Boise area and current Boise housing market, go up to the communities page tab, and check out the current listings under each community page.

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