I've seen some recent national news stories about prices falling and inventory rising, but don't forget all real estate markets are local. Here in Idaho that is not the case. Supply based on the pace of sales is holding at 1.5 months- still very low compared to a balanced market with 5-6 months supply where neither buyers nor sellers have the advantage.

The second quarter usually brings the highest demand of the year here in Idaho, driving prices to make the biggest jumps before the summer heat comes. Despite interest rate fluctuations in this highly rate sensitive market, this year's spring rush drove prices up in both Ada & Canyon Counties.

Ada County's median existing home price jumped an impressive 10.9% from $505,000 to $559,900 during the second quarter. Year over year, the median is up 6.65% in Ada County. Amazingly, prices here are up 60% in the 4 years since Covid!

The Canyon County median existing home price rose 5.2% from $385,000 to $405,000 during the second quarter. Year over year Canyon's median is up 4%. I think affordability played more of a role here, halving the gains seen in Ada County. Prices here are up 51.7% since Covid.

While housing supply remains so low, I don't see local home prices dropping- other than seasonal changes. Lower mortgage rates later this year should also support prices. See my Market Monitor for monthly updates on the local housing markets.

Here's an update on the latest quarterly existing home prices report from the Intermountain Regional MLS for the Boise Metro area. Fluctuating mortgage interest rates and continued tight housing supply have played large roles in driving the Treasure Valley housing markets.

Ada County's median existing home price for Q1 was $505,000. That's down 0.1% from the previous quarter and up 6.3% year over year (compared to Q1 2023). Sales of existing homes were down 8.25% year over year, while new construction was down 14.36% for the same period. 

Canyon County's median existing home price was $385,000 for Q1, up 1.3% from the previous quarter and up 6.94% year over year. Sales of existing homes in Canyon County are down 16.95% from a year ago and new construction was down 11.96% year over year.

NAR has just published their report on the quarter comparing median home prices in major metros across the country. This abbreviated table helps you compare the Boise Metro to other metros in the West.

Most of our nearest neighbors still have higher home prices than the Boise Metro, including Salt Lake, Reno, Ogden & Provo. No bubble to burst here in local home prices!

Don't miss my Market Monitor for monthly updates on the Boise Idaho area housing markets.

Goodbye 2023! Can't say I'll miss you. It was a slow year for home sales with spiking mortgage rates pricing buyers out and discouraging sellers from moving. But I am optimistic that 2024 will be better with easing rates and increased inventory.

Looking back on the fourth quarter, home prices did slide as usual for the off-season. It did not help that mortgage rates hit 2-decade highs in November.

The median existing home price in Ada County dropped 3% for the quarter to $510k. Much less than the 4.8% drop the previous Q4, despite higher mortgage rates. This is a sign of underlying tightness in our housing markets- low inventory vs pent-up demand. Year over year home prices are still up 2% in Ada County.

Canyon County's median existing home price fell 2.8% for the quarter to $380k. Also, much less than the previous Q4 drop of 7.8%. The housing market is even tighter here. Year over year, Canyon County home prices are still up 3.1%  

Looking ahead to Q1, this snowy weather will surely hold up listings and sales in Jan/Feb. On the bright side, mortgage rates have recently dropped over a point and should fuel demand from buyers later in the quarter.  

Idaho experienced a growth rate of 15% in household median income in the 2018-2022 American Community Survey by the Census Bureau, compared to the previous 2013-2017 survey. As a percentage of increase, this was highest in the nation ahead of California (14.3%), Oregon & Washington (14%) and Arizona (13.3%).

Idaho also had the 5^th highest increase by dollar amount from the previous survey, gaining $9,153 to an estimated median household income of $70,214. Wages increased in many sectors of the economy and the housing boom’s increased demand for construction workers and remote workers were also a factor.

So, wages are climbing, improving affordability in Idaho. Near-future home buyers should not hope for falling home prices, other than seasonal fluctuations. Our recent population growth and low inventory is providing strong upward pressure on home prices and the only way out is building more housing stock or deport all the Californians (joking). There is also good news on that front:

With an increase of nearly 57,000 units, our state also ranked 4^th in all states for housing unit growth from the previous survey. The Boise-Nampa MSA accounted for 62% of the increase, followed by Kootenai County (11.4%) Bonneville County (9.4%) and Twin falls County (7.9%).

Population growth has been a major factor driving home prices in Idaho. Idaho has been one of the top 5 fastest growing states in the nation for 7 years in a row now, based on percentage of population. However, the growth has slowed.

From July 2022 to July 2023 Idaho added (net) nearly 26,000 residents.  This is about a 1.3% increase according to the Census Bureau ranking fifth in the nation. The previous year Idaho ranked second with approx. 35,000 new residents, equivalent to 1.8% growth. From July 2020 to July 2021 Idaho was ranked first in the nation with 53,000 new residents and 2.9% population growth.

Idaho now has about 1.965 million residents by Census Bureau estimates.

Where are people moving to Idaho from?  During 2022, the top five states were California 26,887, Washington 14,387, Oregon 8,410, Utah 7,812 & Arizona 3,633.

Where in Idaho are they moving to?  In 2022, the fastest growing counties by population were Boundary 5.6%, Benewah 4.3%, Adams 4%, Jefferson 3.6% and Bonner 3.6%. Ada County grew by an estimated 1.99% in the last year and Canyon County grew by 1.76% in the last year.

The Treasure Valley (Ada & Canyon counties) contains about 40% of Idaho’s population now and surprisingly most of our recent population growth has come from other places in Idaho, not from out of state according to the Department of Labor.

Even though growth is slowing, many have come. Few of these newcomers bought a home last year, so I see pent-up demand for homes. Now that interest rates have come back down some, I expect stronger demand in 2024 from homebuyers.  With our low inventory, don’t expect Treasure Valley home prices or rents to come down much, except for seasonal variations.

The National Association of Realtors just released their quarterly metro medians report. Eighty percent of large metros posted price increases for the 3rd quarter despite spiking interest rates. Low inventory continues to support rising home prices in many areas. Eleven percent of metros even posted double-digit gains.

In the Boise Metro, Ada County posted only a tenth of a percent increase for the quarter while Canyon County jumped 2.4%. Both are almost flat compared to the same quarter a year ago.

I made this abbreviated table to help you compare our local home prices with other large metros on this side of the country. If there were a bubble in local home prices, you could see it here.

Copyright NAR 2023. Boise Metro home prices remain above the national median, but well below the west and our nearest neighbors; Salt Lake City, Provo & Reno.

Happy Fall! Well, interest rates have been rising, now near a 23-year high, and I was expecting home prices to soften as a result. However, inventory remains low in SW Idaho and that has helped to support local home prices. People are understandably more hesitant to move and trade in their low rate for a much higher payment, so this may help to keep inventory low until mortgage rates subside.

As to home prices, I think we are returning to the normal annual bell curve shape, where prices are up in the middle quarters of the year and down in the off seasons.   

I use existing homes to judge trends in prices, since new construction is a smaller sample size and can vary wildly. Median prices serve best as a guide to what's happening with home prices- half are lower, half are higher. It's the mid-point. Averages can be skewed by a few on the extremes.

Ada County's median existing home price of $525,537 for the third quarter was up just $537 from the previous quarter, so basically flat. Year over year, Ada's price was also flat. That big 10.5% jump in the second quarter brought us back to even from a year ago. Even after the wild swings, the third quarter median is also the same as 2 years ago. 

Canyon County existing home prices were a bit stronger than Ada, rising 2.4% during the third quarter to $399,000. Year over year, the median is down just two tenths of a percent.

Looking ahead, the latest spike in interest rates and the seasonal slow-down should cause prices to drop in the fourth quarter. With the low inventory I don't see it being as large as last year's dip. Bargain season (winter & holidays) is coming and I am ready to serve!     

Since early last year mortgage interest rates have doubled and everything has gotten more expensive, but why have home prices not just collapsed in the Boise Idaho area? Affordability conditions are the worst in many years.

Our local home prices did fall over the winter (they almost always do in the off-season), but then prices jumped 10.5% in Ada County and 8.2% in Canyon County just during the second quarter. Even after the great quarter, the median existing home price in Ada County was still down 9.3% year over year and Canyon County was down 8.2%.

Why such a small adjustment in prices in response to such major changes?

1) Nearly 30% of all homes nationwide are free & clear, no mortgage. Higher rates don't hurt them unless they move up.

2) Any homeowner who bought more than 2 years ago in the Boise area has huge equity. Ada County home prices are still 50% higher than when Covid hit 3 years ago and up 250% in the last 12 years. Most owners have massive equity that they can move to the next home. They won't need to borrow as much as new buyers do.

3) Any homeowner who bought more than 2 years ago also has a 3-4% interest rate and will be more reluctant to move to a 7% rate. This will help to keep inventory low and prop up prices for some time.

Most importantly we have low inventory- an ongoing housing shortage in SW Idaho after all the population growth. As of September, we have only a 1.5- month supply of homes based on the current pace of sales. This scarcity will support home prices until supply levels double or triple from here.

As of July 1st, our median home price of $480,800 was $66,000 below Salt Lake City, $55,000 below Reno and nearly $40,000 below Provo so why can't Boise home prices go higher? I think they will when mortgage rates settle back down.

This is not just local news, but it is the biggest news in real estate right now. Last week mortgage rates rose to the highest level in 22 years! According to Freddie Mac's weekly survey of mortgage lenders, last week's average was 7.09%. I would understand if you decided to wait for awhile to see what happens with mortgage rates. However, rates could go higher!

This chart shows Freddie Mac's annual averages over the last 50 years and where we are now. Keep in mind that the 50-year average is 7.65% and we are still below that. Also, look at the size of the spike back in the 80's- the last time inflation was high. It dwarfs the current spike.

In my opinion, no one can predict mortgage rates, although many try. Some have predicted that mortgage rates will ease later this year, but they've only gone up recently, despite slowing inflation.

Inflation is slowing down, but the Fed seems focused on the strong job markets, low unemployment and rising wages and won't stop tightening until we are in a recession. Of course, the Fed does not directly set mortgage rates, but has a major effect on them. Mortgage rates usually rise in anticipation of a Fed rate hike.

Realtors say: "Buy the home, date the rate" for good reason. If you are ready to buy, you can always refinance later. Get a payment you can afford and start building equity because each payment reduces your principle faster on a mortgage.

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