Quarterly Real Estate Update
Boise ID Metro AreaJan 2018 Edition-
Happy Belated 2018! Here comes the spring rush and another crazy year for Idaho real estate.
Bargain season is almost over in the Boise Idaho areas. Sales will pick up in late February and home prices should shoot skyward again until at least mid year. Not only home prices, but interest rates are expected to climb this year. Now would be a good time to get ahead of it. Give me a call to explore your options.
Boise Metro Home Prices- Q4 Numbers
Quarterly Median Existing Home Prices are the most reliable indicator of housing market price trends. I use only existing homes in my chart, as the ebb & flow of new construction can skew the numbers.
Ada County's median existing home price for Q4 fell 2.7% from the previous quarter to $250,000. It is not unusual for home prices to weaken in an around Boise in winter. Year over year, the Ada County median existing home price is up 10.2% when compared to Q4 of 2016, despite the recent drop. For you renters: You could say that owning a median priced home in Boise was worth $25,000 in 2017. Supply is even tighter this January, so don't look for prices to slow down soon.
Canyon County's median existing home price during Q4 rose 0.57% from the previous quarter, gaining only $1,000 in value to $176,000. Year over year, the median in Canyon County is up huge- 15.8% when compared to Q4 of 2016. That's $27,000 on the median priced home added to your net worth in one year. Renters- contact me to stop falling behind.
Ada County Home Price Bubble?
Double-digit annual increases cause concern about a bubble that could burst. I use this chart to monitor the situation. The main driver of home price increases is demand and Idaho is still one of the fastest growing states in the nation and a large number of people are coming to the Treasure Valley. As a result, there are not enough homes on the market to keep up with demand, driving prices higher.
Beginning in 1997, this chart compares the current Ada County median existing home price against a baseline of 3.5% for the long-term average appreciation documented since the 1940's.
It is important to note that the previous downturn was not caused by a localized bubble in prices or decreasing population growth. Rather by a wide-spread economic downturn. Today, I also find comfort in the fact that we are still much closer to the baseline than in 2007 and the slope is not as steep going upward this time.
Still Shrinking Discounts on Homes
I am always watching for any sign of a real estate downturn. I know there are many investors holding rentals that might want to take gains when prices start to trend downward. Locally, the market is only trending tighter and looking strong for 2018.
At the height of the downturn, when Boise area home prices were falling, the average discount that home sellers accepted rose to a high of 4.5% off asking. Since then, the trend in discounts has been steadily downward. The average discount off asking price for all of 2017 is under 1% and much lower than during the previous boom.
For 2018, the next two months will be the ideal time for home buyers to make a move. These underlying conditions (strong demand/low inventory/low rates) will not go away before the spring rush and then prices will explode in Q2.
I have more charts! See My Market Monitor for more information on Boise Metro housing markets and trends, updated monthly.
I am always happy to answer real estate questions; recommend a good lender, provide a free CMA or neighborhood history, an investment analysis, should-I-refi-or-remodel questions, first-timer education, etc.