If you want to buy a house in Boise, Idaho, studying current market patterns and looking ahead to the city’s future housing market can help you make an informed purchase decision.
What have been the biggest real estate trends in Boise during the last year? Perhaps more crucially, how is the Boise housing market expected to be in 2023? Let’s address these issues to help you decide whether it’s the best time to put a house on the market or buy one. You’ll also learn what a housing market bubble is, and see if there’s already one in Boise.
Boise Real Estate Market Growth
The Boise real estate market is booming thanks to low lending rates and a lack of supply in comparison to demand. As a result, customers must pay more than the listing price. The present home’s average sales price has been very stable, and so has purchaser demand. Homes continue to sell at relatively heightened prices, but the rise in listed pricing may have dampened several numerous bids and competitiveness seen previously this year.
According to research published by weknowboise.com, Canyon and Ada Counties are kicking off the spring selling season in high gear, with home values skyrocketing to unimaginable highs in the face of rising interest rates and fierce competition.
The slowdown is already affecting certain Western mountain cities, but it is also expected to affect Austin, Texas, Tampa, and Phoenix, Florida, among other areas.
With unexpected monthly price rises that startle purchasers, the industry has become used to one constant: there’s a great need for more houses than there are available Idaho housing units. As supply decreased, demand for the Boise property market surpassed that mark, aided by record-low lending rates. According to a recent analysis published by the Real Estate Initiative at Florida Atlantic University, Boise is the country’s most overvalued location, with properties selling for 80.64% more, according to historical pricing data.
Customers working from home displaced from other markets by the pandemic, seem to be flocking to Boise-Idaho, pushing up property values. Boise is the second most expensive housing market in the United States.
The Housing Affordability Indices by Oxford Economics look at whether a city’s average household can buy a middle-priced property. According to the Housing Affordability Indices, property prices in Boise are 72% more expensive than what a middle-income family can pay.
That’s how heated this sector is due to a lack of supply in comparison to demand, particularly for classic single-family homes. For many years, the fundamental driver of property prices in the Boise region was a dearth of supply, but some other factors have hastened the climb in recent months. Even recently constructed homes in Boise have become excessively expensive to purchase.
Due to the rapid rise in material prices, several developers have reserved available stock until the house is nearly finished so that they may price it dependent on eventual material prices. As a consequence, new construction real estate costs in Ada hit an all-time of $645,000 in April 2022, up 36.7% from $471,672 last year. Despite the fact that the influx of available structures has surged by 293.5% since last year, it is still less than a fair market in which neither buyers or sellers benefit.
It has influenced everything from consumer demand to home supply to lending rates, which has all led to soaring real estate prices at all price levels. Despite a restricted supply of houses, sales are growing across the board. Sellers are likely to market their homes in the next months to leverage the ongoing demand. Even in 2022, the Boise Metro Area property market is predicted to see robust home price growth.
Boise Real Estate Market — Is This a Bubble?
The continuous increase in property values has some economists wondering if a bubble is forming. Real estate bubbles form when rising demand drives property prices above what they should be. When demand slows and prices ultimately fall, the subsequent price decline is how the bubble bursts, leaving some individuals owing much more than their houses are currently worth.
Most analysts maintained that the price increase was not a bubble, but rather the outcome of a simple supply-and-demand imbalance. The epidemic prompted many individuals to consider purchasing a home at about the same time as many millennials reached home buying age. Meanwhile, all of those prospective purchasers sought to leverage record-low borrowing mortgage rates. And simply put, there haven’t been enough properties on the market to match demand.
Unlike the previous real estate bubble, which reached a peak in the late 2000s and was driven primarily by speculation and bad lending, today’s run-up was powered by a supply-demand imbalance.
The widespread work-from-anywhere revolution made it into one of the trendiest markets in the United States, but property prices in Boise, Idaho are leveling down. According to Zillow statistics, average property prices in the Boise area climbed 0.4% last month, dropping from 4.1% in June. As a result, it is among the first country’s top 100 home markets that are experiencing price declines this year.
Cities like Boise, which have become post-COVID destinations, are prime candidates for the bubble-ish designation since prices are completely determined by how much individuals from the Northeast, California, and other high-cost areas desire to live there.
However, Boise’s wobble might be a portent of events to come for some of these epidemic hotspots-locations where the housing market simply got much further ahead of fundamentals. It will ultimately be beneficial to clean out some of the market excesses, and it may also benefit Boise residents in the long term. Some of the best places to live in Boise include:
- Central Hills
- The Highlands
- The North End
- Boise Heights
- The East End
The Future Forecasts of the Boise Real Estate Market
What are the real estate market forecasts for Boise in 2022 and 2023? Let’s take a look at the Zillow pricing patterns over the last few years. In the last 10 years, housing prices in Boise have increased by about 232.47% (Zillow Home Value Index since June 2012). ZHVI is an annualized indicator of average house value and market movements across certain areas and dwelling types.
It is the average value for properties in the 35th to 65th percentiles. The ZHVI reflects the entire housing stock rather than simply properties that sell or list in a particular month. The average house value in the Boise City Metro area is approximately $535,281. It shows that 50% of the area’s housing stock is worth more than $535,281 and 50% is worth less. (adjusted for seasonal fluctuations).
In April 2021, the average house value in Boise Metro was roughly $466,000. Median home prices have risen by 14.8% in the last year alone. According to Zillow, Boise is a sizzling hot seller’s real estate market, which indicates that there is a finite supply of houses in Boise and homebuyers are often compelled to compete, leading to higher prices and/or faster sales that favor homeowners.
NeighborhoodScout.com has experienced similar development. According to their statistics, Boise’s real estate has increased by 253.54% in the previous 10 years. Its yearly appreciation rate has averaged 13.4%, which is higher than the national average. This result places Boise in the top 10% of cities nationwide in terms of real estate appreciation.
The last twelve-month appreciation rate in Boise was almost 41.4%, and the recent quarter appreciation rate was about 12.00%, which annualizes to a rate of 57.3%. This result corresponds to Zillow’s optimistic prognosis, which forecasts that property values in this region will rise over the next year. If you invest today, you may expect a significant return on your investment in 12 months.
Here is the house price projection for the Boise-Nampa metropolitan area’s three major cities: Boise, Nampa, and Meridian. Home prices are expected to rise dramatically. As of April 2023, the most recent projection is not yet available.
- The average property value in the Boise City Metro area is $516,548
- Home prices in the Boise City Metro area have risen 17.9% in the last year and are predicted to grow 14.7% in the coming year
- Home prices in Boise City have risen 14.8% in the last year (current value = $535,281) and will keep growing in the double digits over the next 12 months
Meanwhile, Boise’s population continues to rise rapidly. Boise’s population has increased by 14.6% over the last decade, making it one of the top 10 fastest-growing cities in the United States. As the population of citizens grows, so does the need for homes and renters.
Both of these characteristics, taken together, offer an image of a city that is not yet on the verge of a housing market crash. When you factor in inflation, notably asset inflation as a result of the Fed’s loose monetary policy and ballooning balance sheet, present house prices may appear to be a steal in the future.
No one can foretell exactly what will happen to the Boise housing market in 2022 and beyond. Having said that, it appears quite unlikely that Boise’s property market will implode any time soon.
Endnote
Is it still a good time to buy despite property prices having risen dramatically in recent years? Or has the window of opportunity for a low-cost house purchase passed?
Even if you’re a first-time homebuyer, there are still compelling reasons to purchase a house in Boise. In fact, according to a recent survey, Boise is the second-best city in the United States for first-time home buyers. While the greatest time to buy a house in Boise might’ve been prior to home prices beginning to rise, now is still an excellent time to do so. Home prices are likely to rise further, providing homebuyers with the potential to benefit from increased home equity and develop wealth in the long run.
If you need to sell your house and are probably wondering, “Who will buy my house in Boise?”, Gem State Cash Offer is one of the best companies that buy houses in Idaho. Additionally, we buy homes in Meridian in any condition without commissions. Why not give us a call today?