Anyone looking to buy a home in the Treasure Valley has heard of, or experienced, the fast pace of the real estate market. In March 2021, the average number of days between when a home was listed for sale and received an offer to purchase was 22 — 50.0% faster than in March 2020. Offers were accepted even faster for existing homes with an average of 14 days — 24.1% faster than a year ago!
The insufficient supply of available homes compared to buyer demand is the main reason the Treasure Valley market is moving so quickly, and the competitiveness of the market continued to impact home prices. The median sales price in March was at $475,500 for existing homes — up 35.0% year-over-year, due in part to buyers often paying more than the list price to make their offer stand out.
On average last month, existing/resale homes in Ada County sold for approximately $18,000 over list price. If you’re searching for a home, this is certainly something to keep in mind. If you’re searching for a home, this is certainly something to keep in mind. If you are struggling to compete in the market and keep getting maxed out on budget, consider reducing the top end of your price range so you’re still looking at homes that could be purchased within your overall budget – try to account for the $18-25,000 over list price that most homes are selling for.
Speaking of budget, working with a mortgage lender early on is crucial. For buyers that have credit concerns or questions about saving for a down payment, creating and implementing a plan well before you begin searching for a home will allow you to shop confidentiality when you’re ready. Lenders may also help identify down payment programs or grants to help first-time home buyers, for example, especially where affordability is a concern.
One of the main drivers of housing affordability are interest rates, which have pushed up off of the historic lows experienced during much of 2020, however continue to be very low giving borrowers strong buying power…
Ryan Froehlich, President of Idaho mortgage lenders association
Froehlich continues, “rates fluctuate daily and a great indicator for rate movement is to watch 10-year treasury bond yields, which as of this past week have been pointing to a slight downward trend in rates. With that said, if you have a property under contract the recommendation is to lock your rate as the bond markets can be dynamic. As the number of COVID-19 vaccinations continues to build and the economy continues to open back up there looks to be more pressure on upward rate movement, hopefully in a gradual and natural fashion.”
Historically low rates are continuing to drive demand from prospective home buyers, along with rising rental costs within the Treasure Valley. As reported by KTVB, “Boise rent has gone up 16% since March 2020, according to a study done by Apartment List. The study also said Boise rent rose 3.4% in March 2021.” Additionally, the desire to own a home and move away from rentals – in some cases from larger metro areas, due to COVID-19 – have also been factors increasing home buyer demand.
Looking at our March 2020 report, we were unsure of the impact the pandemic would have on the Treasure Valley real estate market, which we now know has roared back despite a few months of limited activity last year. We will do our best to provide context to year-over-year figures in the next few months of reports – keeping in mind that sales activity for April and May in particular might look high in comparison to 2020, since sales were dampened in those months as a result of the statewide stay-home order.
Although real estate was deemed essential in Idaho, the level of general uncertainty put a lot of home buyers and sellers on pause. In July, we began seeing year-over-year increases in existing/resale sales, while listing activity remained below 2019 levels throughout most of last year. This, compounded with the overall trend of year-over-year declines in existing inventory since 2014, further contributed to the insufficient supply compared to demand problem we find ourselves in today.
However, there are still homes available for purchase within the Treasure Valley, even if they are selling quickly or over list price. These competitive conditions mean it is imperative for prospective buyers to work with a REALTOR® to help them through the process. Sellers, too, are finding that their REALTORS® provide tremendous value in helping them determine the best pricing strategy based on current market conditions specific to their property and managing multiple offer situations.
If you are considering buying a home soon or anytime this year, reach out to us right away.
Together, we can make a plan that works best for your timeline, especially if you need to coordinate selling your current home and would like to negotiate a rent back agreement. And most importantly, we can help navigate what to expect when making offers, including: offers over list price, ways to compete with cash offers, how to avoid fair housing violations by skipping the buyer “love letter”, holding off on any large purchases or credit pulls to protect your loan qualification, and discussing any contingencies that a seller may request be waived, such as an inspection or appraisal, and how that may create risk for you… and more.
