Is the Boise real estate market improving? What the data and experts say

Many builders have slowed down or halted new projects and are finishing up what they have in the works while waiting to see what the market will do.

BOISE, Idaho- This article originally appeared in the Idaho Press.

On the way to Meridian’s Sky Mesa subdivision, a sign advertises new homes and large lots. A family with floats and pool noodles crosses the street towards an infinity pool.

Construction workers, contractor vehicles and portable toilets line the streets as laborers lift planks above their heads. Several homes are wrapped in Tyvek behind the backyard of a newly built $1.3 million home for sale.

It’s that high end of the market that’s still moving pretty quickly in the Boise area, since people buying homes over a million dollars don’t have to worry about interest rates that have almost doubled in a few months.

But builders are holding back other projects at the bottom of the market as buyers, with new options, take their time to search and buy.

“Ironically, if you price it competitively, I see that the luxury market, which is this inventory, is actually going a bit faster than some of the others,” said RE/MAX Capital realtor Sheila Smith. City. “I think it’s because they’re a bit isolated.”

Deep-pocketed homebuyers can use private financing or cash, which aren’t as affected by rising interest rates.

Inventory continues to rise across the board, but “we’re actually moving these (luxury homes),” Smith said.

However, on the construction side, production builders are holding back home construction at the bottom of the market, said Matt Weston, director of Weston Real Estate Services powered by Amherst Madison. The company is focused on infill development and construction in Boise.

Many builders have slowed down or halted new projects and are finishing up what they have in the works while waiting to see what the market will do.

However, the increase in supply in June led to lower home prices in Ada County, the Idaho Press previously reported.

For example, Smith listed a condo for $315,000 this winter. Another comparable unit in the same building is for sale right now, but for $290,000, down from about $25,000 for similar units with the same number of bedrooms and square footage.

Some people react too quickly, Smith said, and aren’t used to being patient. Homes were selling much faster and now sellers think a home is too expensive because it doesn’t sell immediately. But the reality is that people have choices now.

Homes stay on the market for 14 to 30 days on average, Smith said. But in a balanced market, homes can be on the market for 60 to 90 days, she said.

“There’s this kind of jumping the gun, and I think that’s part of what we’re seeing,” Smith said. “We’re seeing values ​​go down because we’re making all these price cuts in response to this increased supply.”

But affordability remains a major issue. Even though prices have fallen 10%, Smith said, as interest rates rise, buyers are falling behind. Additionally, those who want to move from their current home to the next may have a rate locked in at 3% and be reluctant to buy another home.

“Until interest rates go down or prices go down, there are more and more people who are still being left out of the market and are part of the Boise workforce,” said Smith.

Smith thinks the market will correct itself. Either there will be a massive increase in rentals and a corresponding increase in multi-family units, or the market will adjust, she said.

But right now, there are more opportunities than in the overheated seller’s market that Boise has seen in recent years. VA loans, for veterans, and FHA loans, which require lower credit scores and down payments, are honored. FHA loans are popular with first-time home buyers.

“I’m so happy that these shoppers finally have a voice again,” she said. “I don’t think people need to be scared…it’s a healthier market.”

Weston agreed. He said the market has changed, but sell-out numbers show Boise isn’t too far off from where it was from 2016 to 2018.

“Maybe that’s not a bad thing,” Weston said. “I don’t know if the market has been very sustainable over the past two years. Our poor local buyers have just been hammered for the past two years.

There’s plenty of inventory in western Ada and Canyon counties, Weston said, but production home builders are delaying new starts in those areas as well. The supply-demand ratio is changing.

Weston said builders delaying new construction affect some prices more than others, especially low prices and extremely high prices.

“We’re scared to do anything over $1.2 million because that market has weakened significantly across the board,” Weston said. “The COVID years, these prices have skyrocketed due to low inventory and high demand and the influence of out-of-state money.”

There’s a silver lining in the Boise market right now, Weston said. The market was recalibrating. The nation as a whole is missing millions of housing units. The Boise area is growing and will continue to grow and attract people.

“It’s a fantastic time for our local buyers to find their homes, their dream homes and make the investment for a five to 10 year future,” Weston said. “It could be the window into this next year.

As soon as we recalibrate and our market tightens, we will again see waves of out-of-state buyers.

This article originally appeared in the Idaho Press, learn more at IdahoPress.com.

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