Housing prices in the Treasure Valley surged by about 30 percent in January, thanks largely to an ever-dwindling supply of homes for sale in Ada and Canyon counties.
The median sales price for a single family home in Ada County last month hit $185,909, about 35 percent higher than in January 2012. Canyon County's median price was $107,202, about 31 percent higher than the same time last year. Homes in those counties were on the market about one-third as long as they had been in January 2012.
The supply of homes in Ada County is almost identical to February 2001, said Marc Lebowitz, executive officer of the Ada County Association of Realtors.
"You've got pent-up demand, really low [interest] rates continuing, household formation on the rise," he said.
He noted a couple of trends:
Real estate investors are still pouring a lot of money into the Treasure Valley buying homes to rent to locals, for example but that will diminish as home prices climb higher.
Lebowitz expects people who've been upside-down on their homes since 2006 or 2008 to finally start selling this year. That will add to the supply from new-home construction.
Foreclosures made up only 50 of the 1,751 homes for sale in Ada County at the end of January. About 24 percent of all the homes listed in Ada County were distressed, but most of them were listed as short sales, meaning the homeowners hoped to sell for less than they still owed on the homes.
The Boise area's real estate market continues to be one of the fastest recovering in the nation. Can the local economy support such a rapid rise in housing prices?
Yes and no, he said. When the mortgage crisis hit, property values fell "below market value," he said. Now they're more realistic.
But a 30-percent surge in prices "makes me nervous because it's not sustainable," he said. There are fewer homes for sale, and each one has multiple offers from buyers. Some families are jumping in with a goal: to buy a home because a baby is on the way, or they're moving here for a job that starts March 1, or to capture low interest rates.
"And with prices increasing this quickly, that puts an unnecessary pressure on families to make decisions," he said.
On the other hand, prices seem to be climbing like a staircase, surging one month and leveling out the next, he said. He predicts a moderate rise overall this year. "I don't foresee 30-percent median price increases throughout the year," he said. "I do see mid- to upper teens."