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

Many manufacturers have slowed down or stopped new projects and are just finishing what they are doing while they wait to see what the market will do.

BOISE, Idaho – This article originally appeared in Idaho Press.

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

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

It is this higher end of the market that is still moving fairly quickly in the Boise area, as people buying million dollar homes don’t have to worry about interest rates that have nearly doubled in just a few months.

But builders are holding onto other projects at the lower end of the market as buyers, with new options, take their time to research and purchase.

“Ironically, if you value competitively, I see that the luxury market, which is that inventory, is actually going a little faster than others,” said Sheila Smith, RE / MAX real estate agent. Capital City. “I think it’s because they are a bit isolated.”

Homebuyers with deep pockets can use private financing or cash, which are unaffected by rising interest rates.

Inventory is still on the rise across all price ranges, but “we’re actually moving those (luxury homes),” Smith said.

However, by the end of construction, manufacturing builders are holding back construction of homes at the lower end of the market, said Matt Weston, principal at Weston Real Estate Services powered by Amherst Madison. The company focuses on the development and construction of curtain walls in Boise.

Many manufacturers have slowed down or stopped new projects and are just finishing what they are doing while they wait to see what the market will do.

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

For example, Smith put a condominium up for sale for $ 315,000 this winter. Another similar unit in the same building is on sale right now, but for $ 290,000, a drop of about $ 25,000 for similar unit with the same number of bedrooms and square feet.

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

The homes are on the market for an average of 14 to 30 days, Smith said. But in a uniform market, homes could be on the market for 60-90 days, he said.

“There’s this kind of jumping gun, which I think is part of what we’re seeing,” Smith said. “We are seeing a decline in values ​​because we are making all these price drops in reaction to this increased supply.”

But accessibility is still a major issue. Even though prices fell 10%, Smith said, as interest rates rose, buyers lagged behind. Additionally, those who want to move from their current home to the next may have a locked-in rate of 3% and are reluctant to buy another home.

“Until interest rates go down or prices go down, there are more and more people who are still valued out of business who are Boise’s workforce,” Smith said.

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

But right now, there are more opportunities than in the overheated vendor market that Boise has experienced 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 homebuyers.

“I’m so happy these buyers finally have a voice again,” he said. “I don’t think people need to be scared … this is a healthier market.”

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

“That might not be 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 in the past two years. “

There’s a lot of inventory in western Ada and Canyon counties, Weston said, but production house builders are holding onto new beginnings in those areas as well. The relationship between supply and demand is changing.

Weston said builders who keep new builds at bay affect some price points more than others, particularly the lowest-end and extremely high-end.

“We are afraid of anything more than $ 1.2 million because that market has softened slightly in all areas,” Weston said. “In the COVID years, those prices exploded due to low inventory, high demand and the influence of out-of-state money.”

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

“This is a fantastic time for our local buyers to find their homes, their dream homes and make the investment for the future in five to ten years,” said Weston. “This could be the window on this next year.

As we recalibrate and our market shrinks, we will again see a surge in out-of-state buyers. “

This article originally appeared in Idaho Press,

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