‘They write nice letters ... and nothing.’ Young buyers lose as Boise house prices soar
The real estate agent tells the story: A young couple with a baby on the way wants to buy their first home, but is finding it tough Boise’s real estate market.
The coronavirus slowdown is over. Prices rise by the day. The inventory of houses for sale is low. Offers come as soon as a new listing is posted.
“We’ve offered on three or four homes, they have 10% down, they write nice letters to the sellers saying how bad they want their house — and nothing,” Boise agent Ann Edmark-Reed, of Silvercreek Realty Group, said by phone. “It’s very discouraging.”
That’s the way it is today in the ever-more-expensive Boise area, where home price records fall by the month. On Tuesday, the Intermountain Multiple Listing Service reported that the median sales price in Ada County rose to $390,000 in July, up $15,000 in one month.
Canyon County’s median price of $300,490 set a record too, for the sixth month in a row. Canyon’s median has risen $35,490 since February.
A total of 1,402 new and existing homes were sold last month in Ada County, 22% more than in July 2019. The market rebounded from the second quarter, when sales were down 15% from a year ago.
“This is the craziest market I think I have seen in decades,” said Edmark-Reed, who has sold real estate in the Treasure Valley for 30 years. “You list a property and it has multiple offers that go over the asking price. The market is so hot right now it’s almost unreal.”
Fewer homes, higher prices
New construction starts in Ada and Canyon counties are down so far in 2020 compared with last year, TOK Commercial Real Estate said in a news release. Fewer home starts are expected to keep prices elevated as buyers compete to secure housing in a very tight market, the company said.
Why the falloff? Corey Barton, owner of CBH Homes, Idaho’s largest homebuilder, said his company sold about 1,300 homes last year and is on track to sell a few more this year. He said there was some uncertainty after the coronavirus pandemic struck Idaho in mid-March, and he thinks that may have kept some builders from moving forward in spring — though not CBH.
“We kind of held our breath, but we haven’t changed anything as far as our goals or numbers that we set at the beginning of the year,” Barton said by phone.
July sales in Ada County included 966 existing homes and 436 new ones. That compares with 839 existing homes and 310 new homes sold in July 2019.
The pandemic briefly slowed real estate activity in the Treasure Valley earlier this year, as open houses were banned and personal interactions were not possible while the state was in a lockdown. Sales picked up as businesses reopened and buyers could walk through houses again.
“We saw about a two-month delay with COVID-19, but things have just picked right back up to where they have been for the last few years,” Kealy Baughman, owner of Trail 27 A Real Estate Co. in Boise, said by phone. “We remain optimistic that our prices will continue to improve in the year ahead.”
The number of pending Ada County sales, 2,046, tops July 2019, when there were 1,763. That bodes well for August, when many of those sales will be finalized. In Canyon County, 1,073 sales are pending, compared with 796 a year ago.
At the same time, the number of houses on the market dipped to another record low.
Only 721 homes were listed for sale in July, down 24% from the 977 homes listed in June. The difference is even more stark when compared with July 2019, when 1,721 homes were for sale, a decrease of 57%.
“We have so little inventory,” Edmark-Reed said.
Canyon County had 310 homes for sale, down nearly 60% from 765 a year ago.
The listings provide less than a month’s worth of inventory at the current sales rate, which heavily favors sellers. A balanced market, which favors neither sellers or buyers, has a four- to six-month supply of houses.
Mortgage rates hit record low
One factor helping buyers is mortgage rates. They, too, are setting records.
On Thursday, mortgage buyer Freddie Mac reported the average rate on a 30-year fixed-rate mortgage dropped to a record-low 2.88%. It was the eighth time this year interest rates hit an all-time low. The mortgage rate dropped below 3% last month for the first time since Freddie Mac began reporting the data in 1971.
Other details from the latest monthly listing-service report:
Existing homes: The median price for the 966 Ada County homes sold was $380,000. In Canyon County, where 367 were sold, the median price was $275,000.
New homes: The median price for the 436 new homes sold in Ada County was $425,625. In Canyon County, the median for 258 new homes was $321,995.
Highest median prices: Eagle, $580,000; North Boise, $574,900; Northeast Boise, $537,500.
Lowest median prices: Northwest Caldwell, $279,900; Northwest Nampa, $274,000; Southwest Caldwell, $273,962.
This story was originally published August 12, 2020 at 4:00 AM.
