Highlights from January
Snowy weather kept real estate activity slow for the month. Interest rates have stabilized.
Star, Kuna & Nampa are the hottest markets in the Boise Metro, starting the year with less than a 1-month supply. Boise & Eagle now have the highest supply at 1.6-months.
Local buying conditions have improved over the winter with lower prices and rates, but it is still a seller's market valley-wide with low inventory supporting home prices. Thanks to existing owners waiting out the winter, overall housing supply in the Boise Metro continued to fall in January, driving supply down under 1.25 months, based on the current pace of sales and including new construction. Home prices should jump with the spring rush. Home prices in SW Idaho always make the biggest jump in the second quarter- last year over 10%! Plan accordingly.
Mortgage Rates Update
Here is a 50-year history of the annual average on mortgage rates according to Freddie Mac and where we are today. The long-term average is 7.65%, so today's rates are still on the low side.
This next chart shows the weekly Freddie Mac survey average since the previous peak in November 2022. Rates have stabilized for now. Given the strong economy & jobs outlook, I would not expect rates to drop much further.
Housing Inventory in Boise Metro
This chart of available homes for sale in Ada & Canyon counties shows how extreme the inventory crunch has been in the Boise Metro and SW Idaho housing markets. Since peaking in 2008, the number of available listings had trended lower each year (pre-covid).
These are all available listings in Ada & Canyon County on the first business day of each month, including all types of single-family homes, both existing & new construction. Covid and doubling interest rates have caused some wild swings over the last 3 years, yet inventory is again near the low end of the scale. It is important to note, the actual available to occupy inventory is much lower than it appears here, as many are to-be-built or under construction. See pie charts below for breakdowns of available inventory.
Boise Idaho Metro Homes Sales
Sales are a trailing indicator on the market- the actual marketing and sale happened under conditions at least a month prior to the majority of sales. Home sales follow the typical four-season trend in Idaho, with the peaks and valleys moving upward over time in these charts of homes sold per month, reflecting the growing population and housing stock in the Treasure Valley.
These charts show all residential single-family property sold each month, including townhomes, condos and manufactured. The red line shows new construction in Ada County. You can clearly see the Covid spike in early 2020. Also, the downward trend in home sales since mortgage rates started rising in early 2022.
Canyon County market trends have roughly mirrored Ada, but sales showed a bit more strength in 2023, due to more affordable prices. Sales have finally turned upward with lower rates.
Home sales in Canyon County have been fed by strong population growth. Sales fell hard in 2022 when mortgage rates started rising but surged again in 2023. It appears Canyon County new construction is carrying a little more momentum than Ada. That big dip in the middle was the snowy cold winter of 2017.
Supply & Demand Drives Home Prices
Pending homes (next month's sales) are the best forward-looking indicator of buyer demand. Dividing actives by pendings, we get a supply of homes in months that is very reliably predictive of future trends in home prices. According to NAR, a 5-6 month supply of homes for sale is a balanced housing market where prices are stable or slowly rising and neither buyers nor sellers have a distinct advantage. To know where home prices are going in any local market, look at housing supply levels.
Here's the local picture of supply & demand with Ada & Canyon counties combined. If no more homes were listed, at the current pace of sales we would run out in less than 1.25 months. We should be seeing strong appreciation in 2024 with easing interest rates and pent-up demand already clashing with low inventory.
Ada County, Idaho
Including the cities of Boise, Meridian, Eagle, Star and Kuna, here is an overview of the Ada County housing markets looking at trends in supply, demand and inventory of homes for sale. Below is the current snapshot of all homes for sale in Ada County.
Our snowy January kept new listings low on existing homes. There are 76 fewer homes on the market this month in Ada County- 1286 total. Of those, 735 are new construction, including 221 under construction and 411 complete. New construction now accounts for 57% of available homes. Below is the same data in a line chart showing the historical trends in the market.
Regular sellers of existing homes tend to follow seasonal trends with most listings mid-year in favorable weather. My chart starts with 5 years of ever-tightening seller's market, then a wildcard Covid year. Then interest rates doubled in 2022 causing available existing homes to spike. Now with many owners still sitting on low rates, new listings are not keeping up with sales.
Ada County today has 735 new homes available, down 46 from the prior month. This represents a 3.8-month absorption rate at the current pace of sales as indicated by the 194 closed in January.
The cheapest stick-built new home available in Ada County was $319,900 for a condo. All Ada county new homes median sold price for January was $574,900. Average was $704,991.
Foreclosures and short sales have been very rare in SW Idaho for the last decade.
The crown jewel city of the Treasure Valley in SW Idaho and Idaho's capital city, Boise is the largest housing market and typically leads the way in local real estate trends.
For January, Boise had 185 existing home sales (Med $450,000 Avg $533,454 Avg days on market 43, median 31)
This chart shows the count of active and pending (under contract) home listings on the first day of each month. This includes all types of new and existing single-family homes: condo, townhouse, manufactured, stick-built with and without acreage.
Contract signings ticked upward and active listings slowed in Boise for the month. The lines are no longer inverted, but remain very close together, indicating a tight market. Boise now has a 1.6 month supply, highest in the valley.
These pie charts show the breakdown by seller of all active homes for sale on the first day of each month. Boise had 465 total homes for sale to start the month, down 26 from the month prior. New construction now makes up 37% of the available pie.
Located in the center of the Boise metro area, Meridian is destined to grow simply by location. Recently named the best place to raise a family in the nation, Meridian is about half the size of Boise with similar home prices.
For January, Meridian had 78 existing homes sold (Med $529,950 Avg $574,433 Avg days on market 41, median 30)
Available listings (blue line) dropped again and pending contracts (red line) rose last month.
Meridian had 356 total homes listed for sale to start the month, dropping 29 from the previous month. New construction now makes up 67% of the available pie with 64 homes under way and 157 completed.
With beautiful golf courses and growing greenbelt along the picturesque Boise River, Eagle is the higher-priced community in the Treasure Valley where you will find many of the largest, most expensive homes.
For January, Eagle had 23 existing homes sold (Med $795,000 Avg $885,171 Avg days on market 84)
Contract signings in Eagle ticked up, while available listings held steady last month.
Eagle had 169 total homes for sale to start the month, adding 2 homes from the previous month. Now 48% of the available homes are new construction, including 34 homes completed and 29 under construction.
A rising star in the Treasure Valley with river valley/rolling hills topography. Many people are relocating to Idaho and choosing this still-quaint little town for lower prices (compared to Eagle), relatively short commute and a great name.
For January, Star had 15 existing homes sold (Med $740,000 Avg $767,072 Avg days on market 68)
Available listings turned downward in Star last month while contract signings slowed. Star ties with Kuna & Nampa for the tightest supply in the valley, now at 1-month.
Star's total inventory was 184 homes for sale to start the month. That's down 5 from the month prior. Now 74% of the available pie in Star is new construction with 31 under way and 81 completed and available.
Kuna has the lowest home prices in Ada County, making it popular for first-time buyers. Located just 10 miles south of Meridian and freeway access, Kuna has a cute little downtown and many starter level homes. Many people are choosing Kuna over longer commute and higher property taxes in Canyon county. Plus growth in the commercial sectors is catching up to residential around Kuna.
For January, Kuna had 17 existing home sales (Med $435,000 Avg $467,455 Avg days on market 39, median 28)
Available listings fell while contract signings surged in Kuna last month. Supply now stands at 1-month.
Kuna available listings totaled 114 homes to start the month, dropping 21 from the month prior. Now 79% of the available homes are new construction. Builders have 53 homes finished and 22 more under way.
Canyon County, Idaho
Canyon County covers a large rural area of small towns. I focus on the metro area- Nampa, Caldwell & Middleton. I take the same readings every month, which works for identifying general trends.
On Feb 1, there were 746 total homes for sale in Canyon County, down 50 from the month prior. Of those, 420 are new construction including 203 homes completed and 107 under way. The cheapest new stick-built home available in Canyon was $319,900. All new homes sold in January- median $453,990 Average $559,204.
Existing home listings dropped slightly, while builders sold a bunch of homes. This might be a good time to look at new homes in Canyon County.
With a revitalized downtown, Nampa is the largest city and main traffic hub of Canyon County. The housing market here suffered with higher rates but will soon recover with such tight inventory.
For January, Nampa had 76 existing homes sold (Med $379,000 Avg $401,924 Avg days on market 42, median 21)
Nampa remains one of the tightest markets in the Treasure Valley, as the lines are again inverted, reflecting less than a 1-month supply. Available listings held steady while contract signings increased last month.
Nampa had 372 total homes for sale on Feb 1st, dropping 7 from the previous month. A batch of 63 homes are under construction and 87 new never occupied homes await buyers here. Now 57% of the available pie is new construction as existing home sellers have slowed over the winter.
Home of the world famous rodeo, a budding wine industry and one of the most affordable cities in the Boise metro area. Centrally located and the Canyon County seat, this is a growing city.
For January, Caldwell had 44 existing home sales (Med $354,000 Avg $350,550 Avg days on market 41, median 24)
Contract signings slowed while available listings dropped again last month. Caldwell inventory is getting tighter, now less than a 1.2-month supply.
Caldwell had 183 total homes for sale on Feb 1st. That is down 34 homes from the previous month with fewer existing and more new. New construction eased to 65% of the available pie this month with 86 completed homes awaiting buyers and 20 more under way.
At the far northwestern edge of the Boise Metro, Middleton is a small but growing town with very affordable home prices and many homes with acreage that make the home prices seem higher.
For January, Middleton had 12 existing homes sold (Med $777,000 Avg $786,504 Avg days on market 56)
Contract signings increased last month while new listings slowed. Middleton now has less than a 1.2-month supply.
Middleton had 125 total homes for sale on Feb 1st, down 9 from the previous month. The new construction segments represent 65% of the available pie with 23 under construction and 22 completed homes available.
All charts are based on MLS data, deemed reliable but not guaranteed, searching all single-family housing types in the Boise-Nampa Metro, new and existing, including stick-built, homes with acreage, condos, townhouses, manufactured homes on rented lots and with land.