Desperate buyers forgo inspections, appraisals as Boise-area home prices push even higher
Looking to buy a home in Ada County? Good luck.
Out-of-state buyers flush with cash are outmaneuvering Idahoans who need a bank loan. By offering cash, they cut down the time it takes to close a deal from a month to one week. Some buyers are dispensing with inspections and appraisals to speed up the process, and they’re coughing up nonrefundable deposits to win over sellers.
Meanwhile, the number of houses listed for sale is still dwindling.
There were a record-low 470 houses listed for sale in September — 288 new homes and 182 existing homes. A month earlier, there were 589 homes available, also a record low since the Intermountain Multiple Listing Service began tracking the numbers in 2006.
“With fewer than 500 homes listed for sale in a county where there’s demand for 1,200 home sales per month, that creates a crisis,” Boise real estate agent Mike Turner of Amherst Madison Real Estate Advisors said by phone.
The situation isn’t any better in neighboring Canyon County, where 190 homes were available in September, also a record low. That was down from 237 listings in August.
And along with low supply, home prices continue to rise. The median price of the 1,172 residences that sold in September in Ada County was a record $409,945 — $9,945 above August’s median, which also set a record, according to a report issued Monday by Intermountain MLS.
Canyon County’s median price of $310,000 also set a record, for the eighth month in a row. Canyon’s median has risen $45,000 since February.
In September 2007, there were 5,040 homes for sale in Ada County. In the past 10 years, the highest number of homes listed in September was 3,066 in 2010. But even last September, there were more than three times as many homes on the market, 1,751, as there were last month.
“I have never seen anything even close to this in my 21 years of real estate sales,” Jere Webb, an associate broker with Downs Realty in Eagle, said by email.
On Monday, Camille Hubbard, an agent with Keller Williams Realty Boise, got a call from a client wanting to look at two available homes.
One had dropped off the market because of a pending sale agreement. The other house’s the seller planned to consider offers at 3 p.m. The client works until 6, so that home wasn’t an option, either.
“I tell my clients you need to go see a place sooner than later,” Hubbard said by phone. “But I also tell them to be patient and the right one will come up. I don’t want them to settle just because they want to get into a home.”
Hubbard and Rick Gehrke, an agent with RE/Max Executives in Nampa who sells in both Ada and Canyon counties, said first-time buyers and others who require mortgages are getting outflanked by cash buyers able to push sales through faster.
‘Most are coming with cash, to beat a loan’
“Most of them are coming in with cash, because they’re going to beat out a loan,” Gehrke said by phone. “They’re abandoning inspections. They’re abandoning appraisals. They’re abandoning any contingencies, and they’re willing to offer nonrefundable money just to tie the house up.”
Webb recently represented a buyer who did all of those things in purchasing a home on East Table Rock Road in Boise. The buyer offered $95,000 on top of the $1.7 million asking price for the five-bedroom, five-bathroom house with 6,867 square feet.
The buyer waived inspection and offered $50,000 in nonrefundable earnest money within 24 hours of having the offer accepted.
Jim Lepman and Bette Wright offered $30,000 over the asking price of $620,000 for a three-bedroom, three-bathroom home on East Chatham Court in Eagle, where Webb was the listing agent. The retired couple moved to Ada County from San Diego to be closer to family.
“It had been sold but it fell out of escrow, and so we were the first people in after that,” Wright said. “We were fortunate. We offered extra to make sure we got it and someone else didn’t outbid us.”
Overall, in Ada County homes sold in September for 0.2% above asking price, Webb said. For a home where the asking price was $400,000, a 0.2% premium would bring it to $400,800.
“That doesn’t sound like much, but that’s for the total sales for the month,” he said. “That’s never happened before.”
Of the 1,172 homes sold in September, 807 were new and 365 were existing.
Over the past three months, the median price has risen by nearly $35,000.
Fueled by strong sales in July, August and September, home sales for the year are up 5.3% over 2019. The market rebounded from the second quarter, when the coronavirus pandemic drove sales down 15% from a year ago.
For the year, new home sales, 3,056, are up 11.6%. The 5,860 existing homes sold for the year represent an increase of 2.3%.
Inventory typically dips over the winter as fewer people look to sell their homes then. Turner isn’t sure that sales will follow that trend this year.
“There’s so much pent-up demand from people who weren’t able to land a property that I think demand will stay strong than usual going into winter and continue to push down the inventory,” he said.
Mortgage rates continue at nearly a record low. On Thursday, Freddie Mac reported the average rate of a 30-year fixed-rate mortgage is 2.87%. Last month, the average was 2.86%, the lowest in a half-century.
A year ago, the mortgage rate averaged 3.56%.
Other details from the latest monthly listing-service report:
Existing homes: The median price for the 807 Ada County homes sold was $405,350. In Canyon County, where 362 were sold, the median price was $291,000.
New homes: The median price for the 365 new homes sold in Ada County was $414,990. In Canyon County, the median for 186 new homes was $334,945.
Highest median prices: Eagle, $674,900; North Boise, $635,000; Northeast Boise, $632,500; .
Lowest median prices: Northeast Nampa, $315,871; Northwest Nampa, $283,500; Southwest Caldwell, $279,950.
This story was originally published October 13, 2020 at 4:00 AM with the headline "Desperate buyers forgo inspections, appraisals as Boise-area home prices push even higher."
