Quarterly Real Estate Update
Boise ID Metro AreaMay 2018 Edition- Q1 Report
Happy Spring! Boise area real estate markets are red-hot already this year. The first quarter home price increases were the strongest ever and housing supply levels the lowest. I expect home prices to explode in the second quarter. I've got the details below.
I am looking for buyers and sellers to serve- give me a call.
Boise Metro Home Prices- Q1 of 2018
Quarterly Median Existing Home Prices are a 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 Q1 jumped 9.46% from the previous quarter to $273,650. That's over 3% a month! This is the largest first quarter increase I've ever seen in Boise home prices. Year over year, the Ada County median existing home price is up an amazing 21%! Yes renters, that's almost $50,000 in equity gained on the median priced home in one year. Or put another way- over $250 per month in higher payments to buy the same house this year.
Canyon County's median existing home price during Q1 rose an impressive 5.11% from the previous quarter to $185,000. Year over year, the median in Canyon County is up 16.35% when compared to Q1 of 2017. That's $30k in wealth created in one year on the median priced home!
These home price increases might seem crazy and unsustainable, but at least a dozen major metros are experiencing hotter market conditions with more listing views on realtor.com and shorter market times. The Boise metro came in 13th on the hottest markets list for March.
Good Reasons to Buy A Home Now Near Boise
I know many of my investors and home owners are loving this incredible wave of wealth that is washing over Idaho. Even my investors who bought in 2007 at the previous peak and let it ride are up big on value. I can understand future buyers and investors being discouraged by these incredible home price increases, but it's not too late to buy and ride this wave. Boise area home prices can only go up from here with record-low housing supply levels and strong demand. See below.
This is a widespread boom in demand and shortage in housing. Many cities across the country are experiencing similar and larger increases in home prices as the economy improves and the pent-up demand for housing over the last decade is absorbed. In fact, about half of 105 metro areas studied in the first quarter were above the pre-recession home price peaks, according to a new study by ATTOM Data Solutions. Some by as much as 69% (Boise is up 25% from previous peak).
According to a new report by Up for Growth National Coalition, 22 states have a shortage of 7.3 million homes to be built to support population growth since 2000. California alone needs 3.4 million homes built to match population growth over that time.
Locally, the Dept of Employment reports Ada County has added 13,000 jobs in 2017 and less than 2500 homes were built and sold in that time. Canyon County added 5,000 jobs and only 800 homes were built and sold. Builders have some catching up to do and this will take time.
This population growth should continue until home prices even out and have a lasting effect on demand and pressure on prices to rise further.
Boise area home prices are still well below the national median and way below the West. At the end of Q3 Boise prices were 14% below the national median and 38% below the West, according to NAR. Prices could rise a lot more before I would be concerned about a local bubble that could burst.
Affordability will likely be the brake that slows this market down, but Idaho wages have gone up fastest in the nation recently too. Yes mortgage interest rates recently hit a 5-year high, but are still near half the long-term average, making money cheap to borrow.
Why Boise Home Prices Will Continue to Sky-Rocket
Home prices could jump double-digit in the second quarter alone- the last four second quarters have jumped 6-8% and supply is even lower now in the Boise Metro. Home sales are up 13% over last year at this time in Ada County and 19% in Canyon County.
This chart tracks all single-family homes listed in Ada & Canyon Counties combined, showing the supply in months based on the pace of sales indicated by pending homes (next month's sales). Housing supply has never been lower!
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.