Boise is considered, by many, an excellent place to live, especially for those who enjoy natural beauty. Often called a "recreationalist's paradise," there's no doubt that many investors are looking to get a piece of the housing market there.
However, recent drops in home prices have made some people wonder if this city is still a good investment option. Moreover, considering Boise's fame as one of the most overvalued markets in the country, we understand if you have your doubts.
Today, we'll look at the Boise housing market, its most recent trends, and predictions of what you can expect from it over the following years.
If you're interested in what the Boise market has to offer, this page is for you.
General Overview of the Trends in the Boise Housing Market
From a general perspective, we can see that Ada County's prices have remained stable despite recent declines, according to data from Boise Regional REALTORS.
On the other hand, Canyon County prices dipped from last year's numbers. Part of the reason for these declines can be attributed to rising interest rates, which has led sellers to hold off from making a transaction.
Historically, this city has been known to have low inventory, high demand, and considerably high prices, leading to more competition. However, Boise has been experiencing a bit of "recovery," leading to more stable market conditions.
Let's look at how this real estate market has behaved over the past few months, as this can help you make a better decision on whether you should invest or not.
Median Sales Price
According to data from Redfin, the median home price (as of April 2023) is $484,55K, which implies an 8.5% decrease from last year's numbers.
Single-family homes were the ones with the lowest decrease, with only a 7.4% decrease year-over-year. Townhouses experienced a 21.1% decrease, and condos got a 12.3% decrease.
On the other hand, the median listing home price was about $550K, and the price per square foot was $302.
Now, what if we go back and look at data from Ada County? As of February 2023, home prices in Ada County were down 10.5% compared to last year. Even though this constituted the fourth consecutive month of annual declines, it represents an increase compared to last month's numbers.
We can argue that the housing market in Ada County is stabilizing, as the typical home value seems to be slowly increasing and adapting to current conditions.
If the Treasure Valley keeps growing/stabilizing, you could have an opportunity to plan and make the most out of the local market.
Number of Homes Sold
Home sales also got affected heavily over the past year. In April 2023, there were only 225 homes sold in Boise, compared to 292 last year; this implies a 22.9% decrease from last year.
As for Ada County in general, data from the Boise Regional REALTORS states that, in February 2023, there were 613 homes sold, which represents a 7.3% decrease year-over-year.
Median Days on the Market
In Boise, homes sell after approximately 14 days; a seven-day increase in comparison to last year.
Even though data suggests that mortgage rates and low housing stock are making houses take longer to sell, this is still a relatively good number that shows there's still reasonable buyer demand.
Ada County, however, experienced a much larger increase in this factor. Data provided by the BRR tells us homes in this area sell after 78 days on the market, which represents a 143.8% year-over-year increase.
The data here can help you determine whether we're in a competitive market or not. According to Redfin, the sale-to-list price in Boise is 99.2%, which suggests a rather balanced market for both buyers and sellers.
However, it's important to remember that about 26.2% of homes in Boise sold above their listing price, and about 1% of homes sold below the listing price, implying that sellers still have more negotiation power than buyers.
What Factors Can Affect the Boise Market for Housing?
Several factors can affect Boise home prices and other essential elements within the market.
If you want to make sure you're making the right investment decision, you should talk to a professional real estate agent to evaluate all your options.
Still, here's a list of factors that are known to influence home prices in the Boise metro area and other nearby cities.
Supply and Demand
Supply and demand are two of the most common factors affecting home prices. Regarding Boise specifically, the city's known for having low inventory and high demand, which often drove home prices up.
However, the inventory in Boise is almost doubling the numbers from last year, and that's because of all the new construction getting done there.
Even though the city is getting more inventory, its levels are still below the "balanced" status, so there's a long way to go before we truly reach the stabilization many experts are predicting.
The same happens with the demand. Boise's population is growing more every year, which drives the demand up. However, the market isn't as competitive as it was before, which has made sellers lower their home prices.
Evaluating the supply and demand rates in Boise may be complicated at first, as they're known to be inconsistent. However, today's data suggests we're in a relatively balanced market.
Demographics can help you determine what people groups are looking to purchase in Boise.
Even though these metrics mainly help sellers and their marketing strategy, this data can also help buyers who are considering capitalizing on their investment.
Overall, demographics are evaluated based on a person's age, gender, income, race, and other factors.
One of the reasons why the future of the market is so uncertain is because of interest rates. As of today, the Federal Reserve plans to keep raising interest rates in an effort to fight inflation. These higher rates have made sellers hold off from selling their property, as affording another one would be too expensive.
Buyers may also be waiting until rates go down to ensure they get a better deal, although there's no way to tell when this will happen.
Still, the Boise housing market is considered to be going through a stabilization phase, which means both buyers and sellers have a great opportunity to make a deal today.
Any kind of government intervention can have an effect on average home prices. Those kinds of interventions include taxation, decisions, laws, and more.
What Are the Chances of the Housing Market in Boise Crashing?
As it happens with many other states in the U.S., the Boise housing market is expected to be "slower" than usual, but it won't crash. In Boise specifically, buyers are getting more negotiating power, which means the market is getting more balanced.
Let's look at a few reasons why the real estate market in Boise (and Idaho in general) isn't likely to crash anytime soon:
As mentioned before, the Boise real estate market is known for having a low housing supply, which implies a higher demand and a higher potential for bidding wars. However, new construction has stabilized the market, and even though we can't say it's completely balanced yet, we're getting close.
Note that the housing market, in general, is slow because of many factors, with one of the most important ones being the higher mortgage/interest rates.
While you could see it as a band thing, this increase could benefit buyers in the long term, as long as they're still willing to invest.
What do higher rates mean for buyers? In general, some may try to offset the higher costs by either looking for more affordable properties or making a higher down payment that results in smaller loans.
However, keep in mind that this ongoing trend can also help cool off a housing market, as the demand for houses goes lower. In that sense, you could face less competition while you're looking for a home.
Still, it all depends on how much you're willing to invest; other people decide to hold off from purchasing until rates go lower.
In the case of Boise, current trends indicate a higher inventory of homes, which gives buyers more opportunities to find affordable housing, making the market less competitive.
Overall, factors like the increasing rates can (and will) affect the market, but you can also see these trends as an opportunity to adjust your investment strategy and find a more suitable option that fits your needs, especially in Boise where the market seems to be opening more opportunities to buyers.
Additional Statistics About Boise's Housing Market
Before we dive into the Boise housing market forecast for this year, let's look at some important statistics and data that you may find useful when deciding if you're going to invest in this city or not.
- 19% of homes in Boise are at risk of flooding, and that number is expected to increase to 21% within the next 30 years.
- 70% of homebuyers in Boise are looking to stay within the metro area.
- 30% of homebuyers in the city want to move out to other places like Twin Falls, ID, Miami, FL, Bend, OR, and Sandpoint, ID.
- Currently, Boise has about 81 public schools with good ratings, as well as 38 private/charter schools.
- Warm Springs Mesa is Boise's most expensive neighborhood with a median listing price of $1.4M.
- Central Bench is considered Boise's most affordable neighborhood, as it has a median listing price of $350K.
- In March 2023, there were approximately 1,134 single-family homes available for sale. 521 of these homes represented new construction, and the other 613 were existing homes.
- The sales tax in Boise is about 6%. On the other hand, the highest marginal income tax rate is 7.4%.
- Investors may expect an average property tax rate of 1%.
Boise Housing Market Forecast for 2023
What can we expect from the real estate market in Boise for 2023? After reading all of the information we just mentioned, you may already have an idea.
Boise is expected to keep experiencing declines in home sales due to many different factors, including a higher inventory. While some sellers may be eager to increase their prices to offset those higher rates, new construction has given buyers more negotiation power, as they now have more options to choose from.
Still, Boise remains a popular place to live in, as it has a thriving economy, and the unemployment rates are fairly low in comparison to other areas.
While Boise is considered to be shifting from a seller's market to a buyer's one, we don't expect the market to fully transition. Instead, what we're seeing is a balanced market that is providing benefits for both parties.
Now, is the market currently better for buyers or sellers? It depends on what your investment strategy is. Generally speaking, home prices are still dropping, and many homes are staying on the market for longer than usual, which makes the value drop even more.
If you were to wait a few more months, you could get an even better deal on a house.
A year ago, it was much harder for buyers to find a suitable deal, as inventory was still low, and there was a huge demand for homes. However, that has changed, and now, instead of fighting in bidding wars, many buyers are instead looking for the best deal available, which raises competition among the sellers.
We can't expect the market to fully benefit buyers because of the rising rates. Many people will back off from investing until the rates go down, but since there's no accurate way to predict when that will happen, what you can do instead is create a better strategy that will lead you to a better deal on a house.
Otherwise, if rates keep going up, your purchasing power may get lower. You, as a buyer, may experience less competition as more people back out from the market, but that doesn't necessarily mean that finding a better deal will always be easy.
To summarize, the outlook for Boise's housing market in 2023 looks reasonably good for everyone. This city has had a long run of low inventory and high prices, and due to recent trends, we can see that's changing.
We can expect the market to keep stabilizing in the following months, giving buyers more negotiation power. If you're planning on investing, this may be the best time to do it. However, considering you now have more access to better deals and opportunities, you should take your time to do research and get assistance from an agent to find the perfect property for your needs.
Investing in Boise's housing market could open the door to many opportunities. However, remember that prices are dropping and interest rates are still going up, so you may still have a hard time finding a suitable deal.
If you're looking to buy a property, late summer or fall may be the best time to do it, as the market isn't expected to be as competitive as in other months.
Boise, overall, is considered an excellent place that can give you great returns on your investment. This is because:
- Its metro area has the largest student market in Idaho.
- There's a high job availability.
- The rental market is strong.
- It has highly-rated schools.
- The quality of life is considered excellent.
- It has lower taxes in comparison to other major cities.
- Overall, real estate is becoming more affordable.
We hope this page has helped you understand everything about the Boise housing market, and make sure you evaluate all your options carefully before making any big decision.
Are Boise House Prices Dropping?
Yes, home prices in Boise are dropping due to several factors, including higher inventory and the fact that many homes are staying on the market longer than usual. Prices are expected to keep going down in the following months.
What Is the Future of the Boise Real Estate Market?
Boise is expected to become a more balanced market over the following months while offering more investment opportunities to buyers.
Is Boise's Housing Market Overvalued?
Yes, Boise is considered one of the most overvalued housing markets in the U.S.