Is the Boise Housing Market Looking Up? That’s what the data and experts say – KTVB.com | Region & Cash

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

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

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

Builders, contractors and portable toilets line the streets as workers raise boards over their heads. Several homes are wrapped in Tyvek behind the backyard of a newly built $1.3 million home that is for sale.

It’s that upper end of the market that’s still moving fairly quickly in the Boise area, as people buying homes worth more than a million dollars don’t have to worry about interest rates moving up in a matter of months have almost doubled.

But builders are holding back on other projects at the lower end of the market as buyers with new options take their time to browse and buy.

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

Deep-pocketed homebuyers can use private financing or cash that isn’t as affected by rising interest rates.

Inventory is still rising at all price points, but “we’re actually killing these[luxury homes],” Smith said.

On the construction side, however, homebuilders are holding back on building lower-end homes, said Matt Weston, director at 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 in the process of finishing what they have in front of them while waiting to see what the market will do.

However, increasing supply in June caused house prices in Ada County to fall, the Idaho Press previously reported.

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

Some people react too quickly, Smith said, and aren’t used to being patient. Houses used to sell much faster and now sellers think a house is overpriced because it doesn’t sell right away. But the reality is that people now have a choice.

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

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

But affordability is still a big issue. Even if prices fell 10%, Smith said buyers would fall behind with higher interest rates. Also, those looking to move from their current home to the next one may have a 3% interest rate and be reluctant to buy another home.

“Until interest rates go down or prices go down, there are always more people who are still priced out of the market who are Boise workers,” Smith said

Smith believes the market will correct itself. Either there will be a massive increase in rents and a corresponding increase in multifamily housing, or the market will adjust downwards, she said.

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

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

Weston agreed. He said the market has changed, but sales rate numbers show that Boise isn’t too far from where it was from 2016-18.

“That might not be a bad thing,” Weston said. “I don’t know if the market has been very sustainable in recent years. Our poor local buyers have just been hammered in recent years.”

Western counties of Ada and Canyon have plenty of inventory, Weston said, but even in those areas, homebuilders are reluctant to start new. The relationship between supply and demand changes.

Weston said builders who are waiting to build new builds affect some price points more than others, particularly the bottom and extreme high price points.

“We’re scared to do anything over $1.2 million because that market has been pretty down on all fronts,” Weston said. “During the COVID years, these price points exploded due to low inventory and high demand, as well as the influx of money from outside the state.”

There’s a silver lining to the Boise market right now, Weston said. The market is recalibrating itself. The nation as a whole is short of 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 five to 10 years,” Weston said. “This could be the window for that next year.

Once we recalibrate and our market tightens again, we will see an increase in out-of-state buyers again.”

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

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