After passing the $600,000 mark in May 2022, the median sales price for homes in Ada County dropped to $592,090 in June. Although the median sales price in June was 12.8% higher compared to the same month a year ago, this is the first price drop we have seen in 2022. Since 2005, the average year-over-year percent change in home prices in Ada County has been 8.1%.
As I’ve been saying for the last year or so, the Boise area real estate market can be explained in simply economics – supply vs demand. Going into late 2020 and early 2021, our housing market was already undersupplied and was struggling to keep up with the demand placed on it as Boise experienced an influx of people moving to the area from out of state. This caused housing prices to shoot up prior to the pandemic.
The incredible price growth we’ve seen since the onset of the pandemic was fueled by a rapid increase in demand for housing as people transitioned to remote work, the continued household formation of millennials, and historically low mortgage interest rates.
We’ve since seen the buyer pool shrink due to higher mortgage rates and an overall buyer attitude of being “fed up” with home prices. Combine that with concerns about inflation and recession fears, and you’ll understand why there has been a slight cooling on demand in the Boise area. This has given inventory a chance to catch up a bit, giving the remaining buyers slightly more options – or at least better odds at having their offer accepted.
There were 2,135 homes available for sale at the end of June, a 192.9% increase from June 2021, and the highest inventory we’ve seen since September 2016. Even with the welcome inventory gains, the months supply of inventory in June was 2.4 months. A “balanced” market, or a market that does not favor buyers or sellers, is typically between 4-6 months supply. So while we are seeing a bit more inventory on the market, it is still a seller’s market in the Boise area.
Metrics that indicate competition in the market continued to show signs of normalizing. Focusing on the existing/resale segment, homes that closed last month spent an average of 14 days on the market before going under contract, compared to 10 days in June 2021. Additionally, the average original list price received for existing homes in June was 98.4%, which that on average, buyers paid less than asking through a lower accepted offer, price reductions, or seller concessions. In June 2021, the average original list price received was 103.9%, which means on average, buyers paid more than asking price.
Sales also continued to lag in June. There were 818 closed home sales last month, down 16.0% compared to June 2021, and the fourth month of consecutive year-over-year declines.
The housing market conditions we experienced for the last two years were unique. Historically low inventory, coupled with rampant demand, resulted in above average price growth and a highly competitive market. The changes we’re seeing in price growth, inventory, and slower market times is moving us toward a more normal market — one where bidding wars are the exception and not the rule, and buyers aren’t having to make split-second decisions and waive contingencies for their offer to even be considered.
It’s so important to note – and for buyers & sellers to understand – that these market shifts in the Boise area are not indicative of a housing “crash,” especially one like 2008. This is a re-balancing of a unique market situation.
Because of this, as the Boise area market shifts, sellers may have to adjust their expectations slightly. Offers may not fly in within the hour or first day you list, and your home may not sell for over list price. This isn’t necessarily a bad thing — in fact, it may make your experience less stressful, and sellers are still receiving great values for their homes. Your best bet for selling in today’s market is to price your home appropriately, based on the relevant data, relevant comps, and expertise offered by your real estate agent, and then allow your agent to market your home on the multiple listing service to reach the widest audience possible.
As the market begins to change in the Boise area, it’s more important than ever that as a seller you work with an experience listing specialist. This means using a REALTOR who is full time, understands the market dynamics, and has a proven track record of selling homes before the unique high flying market we experienced over the last few years. It is going to take more than just putting a “for sale” sign in your yard to get your home sold these days.
So when you are ready to make a move and sell your property, please do not hesitate to reach out to me. As a top producer in the Boise area, it would be my honor to sell your house.
This market report is provided by Boise Regional Realtors.
