Home sales usually peak in June/July around here and this year is no different. Mortgage interest rates have been trending upward, now at a 13-month high. No surprise that contract signings fell 10.7% during August in the Treasure Valley. What is surprising is that available listings held steady instead of rising as expected.
The overall supply of homes for sale based on the pace of sales increased from 1.49 months to 1.66 months in the Boise metro for the month. Star and Kuna remain the tightest markets in the Boise Metro with just a 1.17 and 1.24-month supply respectively. Boise now has the highest supply levels in the valley at 2.13 months, followed by Middleton at 1.81 months, representing the soft-spot for buyers' best chance to get price reductions or closing costs paid.
Boise area home prices have been rising quickly for years, but recently have slowed to more normal annual appreciation rates. You'll notice that most years look like a bell curve with prices jumping the most during the spring/summer when competition is highest and normally falling during the winter months. I use quarterly medians to judge home price trends because monthly numbers are too erratic and easily skewed by a few sales.
After the great recession ended in 2009, Boise Metro home prices were rising steadily, but exploded upward after covid and peaked in 2022 when interest rates spiked. The housing market has been slowly building back up since then. For Q2, the Ada County median existing home price jumped a surprising 8.5% after falling for 3 quarters in a row. The median of $569,950 is now up just 1% compared to a year ago.
Canyon County median existing home prices have been very flat, but rose a modest 3.74% during Q2 to a median of $414,490. Also up 3.74% from a year ago.
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 reflecting the growing population and housing stock in the Treasure Valley.
This chart shows all residential single-family property sold each month in Ada County (Boise, Meridian, Eagle, Star & Kuna). The red line is new construction. You can clearly see the Covid spike in early 2020 and the downward trend in home sales after mortgage rates doubled in 2022. Home sales are trending up again but remain low in Ada County compared to the past. Low inventory and higher rates have constrained sales, but this year sales activity peaked a little higher again.
Canyon County (Nampa, Caldwell & Middleton) home sales have roughly mirrored Ada trends; lower than past years but slowly building again. That big dip in the middle was the snowy cold winter of 2017. It looks like home sales have peaked in Canyon County for the year.
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.
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 in 2020 and doubling interest rates in 2022 have caused some wild swings, but the latest 4-year trend is upward as we slowly move toward normal again. 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.
Pending homes (next month's sales) are the best forward-looking indicator of supply & demand. Dividing actives by pendings, we get a supply of homes in months that is a very reliable predictor 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 just 1.66 months. Sellers in general continue to have the upper hand in negotiations and this causes upward pressure on prices, especially during the peak selling season. At these supply levels, prices should be jumping double-digits, but affordability conditions are pushing back and holding prices and sales down. The good news is: Idaho wages are rising faster.
This chart shows the median (half sold in less) time on market from listing to offer acceptance on existing homes sold in Ada & Canyon counties. Back in 2020 -2021 and again briefly in 2022 the median was 3 days- low as it could go. Now trending longer each year, but far from historically normal market times.
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.
There are just 5 more homes on the market this month in Ada County- 2280 total. Of those available homes 49% (1105) are new construction, including 413 under construction and 515 complete. Absorption rate on new homes fell to 3.2-months based on 323 closed last month. Cheapest new stick-built home available is $344,900 for a condo. All new homes sold last month- median $639,900 Average $804,524. Below is the same data in a line chart showing the historical trends in the market. Only 4 short sales and 1 foreclosed home available.
Regular sellers of existing homes tend to follow seasonal trends in Ada County with most listings mid-year in favorable weather. My chart starts with 5 years of ever-tightening market caused by rapid population growth, then a wildcard Covid year. Then interest rates doubled in 2022 causing inventory to spike. The number of homes available has clearly trended upward over the last 4 years. After new home sales spiked this spring, new construction inventory is down again.
Canyon County covers a large rural area of small towns with more affordable home prices than Ada. I focus on the metro area- Nampa, Caldwell & Middleton.
There are 26 fewer homes for sale this month in Canyon County, total 1266 homes available. Of those, 52% (644) are new construction including 384 homes completed and 188 under way. Absorption rate on new homes is 3.25-months based on the 198 sold last month. The cheapest new stick-built home available in Canyon County was $323,000 for a townhouse. All new homes sold last month: median $495,492 Average $609,966. To start the month, 9 foreclosed and 9 short sales- most I've seen in many years.
Existing home listings have peaked, while builders have some inventory to move before winter. This is a good time to look at new homes in Canyon County as I've seen a bunch of price reductions from builders recently.
All charts are based on my own monthly readings from MLS data, deemed reliable but not guaranteed. This overview is intended to be general housing market information and should not be applied to any individual property.
For housing market information and charts on individual cities in the Boise Idaho Metro, see my area pages for Boise, Meridian, Eagle, Star, Kuna, Nampa, Caldwell & Middleton.
If you find this information useful, I would love to hear about it. Drop me a note or a google review. And if you are thinking about buying or selling a home in the Boise Idaho area, call/text me for help or advice at 208-866-3481 Thanks!
