Every major housing market in the Boise metropolitan area set a new median sales price record in June, thanks to a decades-in-the-making housing shortage and voracious buyer demand.
Ada County hit its 12th consecutive month of record-setting prices in June with a median sales price of $524,950, a 40% increase over the previous year. Canyon County also set a new sales price record of $424,000, which marks a 49% annual increase. It’s also the 11th price record the county has set in the past year.
All of the Treasure Valley’s largest housing markets also set new records:
- In Eagle, the median sales price hit an eye-watering $849,000, a 56% annual increase.
- Boise’s median sales price hit $500,000 for the first time, a 39% jump.
- Meridian’s sales price jumped up to $536,500, or 45% higher than last year.
- Nampa also set a new price record in June of $415,000 – also a 46% increase.
Nationally, home prices have jumped up 15.7% from April 2020-21, according to the Federal Housing Finance Agency. That’s a 30-year record-setting increase. And yet it’s nothing compared to our local numbers.
It’s also worth noting that these prices don’t exist in a bubble. Years of underbuilding in the Treasure Valley are taking its toll on the housing market, as we continue to experience a historically low supply of new (as well as existing) homes for sale. This pattern is playing out nationally, too. According to the National Association of Realtors, construction of new housing units over the last 20 years has fallen 5.5 million units short of long-term historical levels we buy houses Roseville.
In the past decade alone, the Wall Street Journal reports that “new-home construction fell 6.8 million units short of what was needed” to meet the growing demand from new households and to replace homes lost to aging and natural disasters. When adjusted per capita and applied locally, that shortage translates to tens of thousands of homes.
But there’s more than just a normal housing shortage at play here. We are also experiencing above-normal levels of demand, some of which has been caused by the influx of out-of-state buyers who are relocating to the Treasure Valley.
Demand has also been spurred on by incredibly low mortgage rates (still below 3% for a 30-year fixed loan). These factors combined continue to drive prices up to historic, and for some, almost unimaginable highs.
Treasure Valley home prices are hitting all buyers in their pocketbooks. But first-time homebuyers, who typically have a lower price-point, are especially affected by the decline in affordability and by builders delaying new home listings.
That said, it’s important to keep in mind the 2021 market is not the same market the Treasure Valley experienced in 2020 – it has slowed down. In many ways, 2020 was a once-in-a-generation market. From a demand perspective, it even made the 2005-06 market seem tame by comparison.
So if it feels like this year’s market is slower than last year’s, it’s because it is. But that’s relative. Homes in the Treasure Valley are still often selling in 4-6 days on the market. To put things in perspective, houses selling in under 30 days is typically considered a fast-moving seller’s market. By that standard, the Treasure Valley is still experiencing an extreme seller’s market because there is more demand and less supply than we saw in 2019.
Some of that strong demand can be attributed to the “work from home” movement caused by the pandemic.
Why the ‘Work From Home’ Movement Landed on Boise’s Front Lawn
Looking back at the past year of home prices, we can see that appreciation really began to accelerate in April, as pandemic-related restrictions rolled across the nation and work-from-home became the new model for many companies (the U.S. Bureau of Labor Statistics estimates that more than 35% of employees were working from home by May 2020, thanks to COVID-19).
The Treasure Valley became a magnet for white-collar employees who had been trapped in cramped living spaces in high-priced metro areas, but found themselves able to work from wherever they pleased. A recent Idaho Press article makes it clear they were drawn to Boise’s proximity to outdoor recreation, more affordable (and larger) homes, and lower cost of living coupled with metropolitan amenities – like our fantastic restaurant scene.
Hot Temps and Vacation Season Mean Less Competition for Buyers
If you’re a potential buyer who’s been sitting on the fence, waiting for a good opportunity to buy, that time might be now. The market is noticeably slower than it was early this year. Even though prices often rise in the second half of the year, we also typically experience a seasonal increase in supply – and an increase in days on the market – in June and July (discounting last year, which was anything but normal).
In fact, we may even see a more pronounced seasonal lull this year, as more cities, not to mention individuals and families, relax their COVID-19 restrictions. We expect people to prioritize vacations that they’ve put off for more than a year, or visits with family.
What does this mean for you, as a potential buyer? It means that instead of competing against ten or more offers, you’ll “only” be competing against one or two. It means that homes that may have sold in hours in the spring could now linger on the market for a few days or weeks.
And yes, there are great homes out there waiting for you. While we’ve noted all of the ways demand continues to outstrip supply, there are still many more homes to choose from than a casual glance might imply. In fact, the Treasure Valley is on track to hit a record number of sales in 2021.
Improve Your Odds of a Winning Offer – Who You Hire Matters
Who you choose for your team when buying or selling a home – from your mortgage lender to your real estate agent – matters now more than ever. Working with an inexperienced real estate agent in today’s market could cost you tens of thousands of dollars or worse, your dream home.
An experienced agent knows how to position their clients for success. If you’re a buyer who has extended three, four, or even five or more offers without success, it’s time to revisit your strategy – and your representation.
We Know Boise. We have unparalleled local knowledge, years of real estate experience, and a long list of strategies and tactics that make our offers not only competitive, but nearly irresistible to sellers. Best yet, few require more money from our buyers.