Boise, Idaho was one of the hottest real estate markets during the second half of 2020, and throughout 2021. But now, as we begin 2023, this housing market is cooling down at a rapid pace. In this article, I will explain some of the changes that are taking place, and how they may change the real estate market in 2023.
How Boise Became One of the Hottest Housing Markets
When the COVID pandemic took root in America, Boise became one of the so-called “pandemic boom towns” that received an influx of buyers from other areas.
The short version is that home buyers from across the country poured into the Boise real estate market, depleting inventory like never before. As a result, home prices within the Boise real estate market skyrocketed with record-breaking gains.1
With strong demand from buyers and exceedingly low inventory levels, the Boise metro area became a strong seller’s market in late 2020. Those conditions continued throughout 2021.
The Cooling of Boise’s Housing Market
But during the second half of 2022, things began to change. Rising home prices and other factors began to cool the real estate market in Boise. Higher house values caused a reduction in demand among buyers, especially for those seeking a relatively low-priced property.
Rising mortgage rates further cooled the Boise housing market in 2022 (along with the rest of the nation). One year ago, the average rate for a 30-year fixed mortgage loan was hovering around 3%. This week, 30-year mortgage rates averaged around 7%.2
As a result of these trends, home sales have declined in Boise and most other major cities across the country.
Real Estate Inventory Getting Back to Normal
That brings us up to the present. As of early 2023, the Boise real estate market is experiencing significant inventory growth and a slowdown in home-buying activity.3
In October, this metro area had about a 3.5-month supply of homes for sale. That’s a big improvement from a year ago, when the market had less than a one-month supply. Inventory growth is starting to balance the scales between buyers and sellers, and it could turn Boise into a buyer’s market in the near future.
A Buyer’s Market Is Likely in 2023
With more homes coming onto the market, buyers don’t have to compete so fiercely with one another. They can slow down and carefully consider each individual property, before making an offer. There’s less urgency, compared to what we saw during 2021.
For more evidence of an ongoing shift towards a buyer’s market, we can look at the number of price cuts made by sellers. At the beginning of this year, the percentage of Boise-area real estate listings with a price reduction was around 15%. But by the fall, that percentage had increased to roughly 70%.4
So clearly, sellers are starting to realize the shifting dynamic within the local real estate market. They are cutting their prices in order to attract more offers from buyers, and that’s something that could continue into next year as well.
A recent survey conducted by Zillow offered some insight into the current thinking of housing analysts and economists in the U.S. Among other things, it showed that most of them expect the housing market to favor buyers in 2023.
To quote the late-September Zillow report: “…a [housing] market firmly in favor of buyers is expected next year, according to a majority of economists and housing experts polled in the latest Zillow Home Price Expectations Survey.”5
A classic buyer’s market happens when
(A) there are more homes for sale than people want to buy.
(B) there are more sellers than people can buy.
But we might see a different kind of buyer’s market in the Boise area during 2023, in terms of supply. Real estate inventory remains low from a historical standpoint. Even so, this housing market (and many others across the country) continue to shift in a more buyer-friendly direction. Higher prices and mortgage rates have reduced demand, while more and more homes have come onto the market. It’s a trend that’s expected to continue into next year.
What Does This Mean for Boise?
So, what does all of this mean for buyers and sellers in Boise? For buyers, this may present an opportunity to have more options to choose from and take your time in making a decision. With the market shifting towards a more buyer-friendly environment, there may be more room for negotiation on price and finding the perfect home.
For sellers, this may mean being more willing to negotiate on price in order to stand out in a crowded market. It’s also important for sellers to be realistic about the value of their home in today’s market. Overpricing a home can lead to extended time on the market and ultimately result in a lower sale price. However, if you stay informed on the current market trends and follow the advice of experts, you can increase your chances of a successful sale.
As a professional realtor, I am dedicated to staying in the know when it comes to real estate trends in Boise. You can trust me to help your home sell, or help you find the house that’s right for you. I am constantly monitoring the market to stay ahead of the curve and provide my clients with the most current and accurate information. It’s important to remember that just because the market has shifted doesn’t mean it’s not the right time to buy or sell. While it’s true that if you’re selling you likely won’t fetch as much money as you would have a year ago, you also won’t pay as much for your next home either.
People always trying to “time the market” by selling for top dollar and buying for bottom dollar will be disappointed as it is impossible to know exactly where you are in the market at any given instant. The history of home ownership over time speaks for itself and has repeatedly proven to be a great option for both stability and wealth generation. While 7% interest (still below the historic average) doesn’t feel as good as 3%, missing out on the perfect home hurts more especially considering a higher rate can be refinanced down as conditions change. Having said that, having a professional by your side can help navigate this ever-changing market and make the best decision for you.
Whether you’re an investor, a first-time homebuyer, or a seasoned seller, I have the knowledge, experience, and resources to help you achieve your real estate goals. I’m here to guide you through the process and make it as smooth and stress-free as possible.
Contact me here or give me a call at (208)401-4066 to get started!
References
- “Boise, Idaho Could Be A Buyers Market in 2023.” Sammamish Mortgage, https://www.sammamishmortgage.com/boise-idaho-could-be-a-buyers-market-in-2023/.
- National Association of Realtors. (n.d.). Existing-Home Sales. Retrieved from https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales
- CBS News. (n.d.). Real Estate 2023: Home Sales To Drop In These Cities. Retrieved from https://www.cbsnews.com/news/real-estate-2023-home-sales-to-drop-in-these-cities/
- Zillow. (n.d.). Boise, ID Home Value – Zillow. Retrieved from https://www.zillow.com/home-values/3737/boise-id/
- Zillow. (2022, September). Zillow Home Value and Sales Forecast: September 2022. Retrieved from https://www.zillow.com/research/zillow-home-value-and-sales-forecast-september-2022-31431/
