Frantic buyers pay above-asking prices for Boise homes. How much? New data may stun you
Boiseans have witnessed the hot housing market firsthand. Newly released data from the Boise Regional Realtors reveals how wild the frenzy for homes became in the past year as frantic buyers got into bidding wars.
As the number of houses sold for more than the list or asking price increased, so did the amount over list that people paid.
From September 2020 until August 2021, more than half of all homes sold in Ada County sold for more than the list price. Those homes averaged at least $35,000 more than the list price each month, even though list prices themselves were already accelerating at a furious pace.
The percentage of Ada County homes that sold above list price peaked at 75.9% in March, when the median price was $467,325. Prices had soared 27.3% in the 12 months since March 2020, when the median was $366,995. Prices continued climbing through July, when the median reached $540,000 — a 38.5% bump from July 2020.
Some houses sold for $100,000 over asking. In May, sale prices averaged $44,075 more than list, according to Boise Regional Realtors data. That’s the highest monthly average-over-list price since the Realtors began tracking this information in 2006.
Ada County set a new record in December for median home prices at $546,000, according to data from the Intermountain Multiple Listing Service.
“When you see sales over list price,” Boise Regional Realtors President Becky Enrico-Crum said by phone, “that helps set the new price, which then stairsteps pricing up.”
The competition coincided with homes spending fewer days on the market. In all of 2021, Ada County homes spent an average of 18 days on the market. They averaged 32 days on the market in 2020 and 39 days in 2019.
The average days on the market hit a record-low 10 in June. From January to June, home prices rose at a faster rate in Boise than any other metro area in the country, according to one study.
As price increases slowed later on in the fall and winter, the percentage of homes sold for over the list price began to drop. The homes that did sell for more than the list price didn’t sell for as much more as homes sold just a few months before.
In December, 22.6% of homes sold for more than the list price, and those averaged $16,487 more than list.
It was an indication that prices more closely aligned with what buyers are willing to pay.
Is Boise market still ‘overvalued’?
A new study released this month by Fitch Ratings, a Wall Street analytical firm, says Boise is still the most “overvalued” housing market in the country.
This has become familiar for Boise, which held the top ranking in Fitch’s 2019 study too. In August, researchers from two Florida universities also ranked Boise as most “overvalued.” And in November, Oxford Economics joined in, declaring Boise the least affordable city in the country.
The most recent Fitch Ratings study is based on comparing home prices with economic factors that drive the housing market, including incomes, the unemployment rate, mortgage rates and other factors.
Jian Mao, the lead analyst on the research, said in an email that the study analyzed these drivers to identify deviations of prices from historical trends.
“Home-prices increases in Boise City (are) outpacing the local economic growth,” Mao said.
Coeur d’Alene and Idaho Falls ranked second and third on Fitch Ratings’ list. Pocatello ranked sixth. Idaho was the most overvalued state, followed by Florida.
Enrico-Crum, of the Boise Regional Realtors, said “overvalued” is a subjective term. Buyers decide how much value to place on a home.
She said remote workers or people moving from other places may have more money to pay for a house locally because of higher wages elsewhere. So while Fitch Ratings declared Boise “overvalued” based on local figures, home prices may be relatively affordable for newcomers.
Idaho had the highest rate of increasing population of any state in the country last year, according to the U.S. Census Bureau.
What’s next?
Looking ahead, Mao said she believes low interest rates, out-of-state migration and limited supply will contribute to prices in Boise continuing to climb.
A possible increase in interest rates could lower demand and slow the increases, but “the overvaluation of Boise City will remain elevated,” Mao said.
Enrico-Crum agreed. The significant lack of housing supply is still a major driver of prices, she said. She anticipates another year similar to 2021 when prices rose fast and houses sold fast. Based on indicators from homebuilders and market trends, Enrico-Crum said the new median prices are the new standard.
Indeed, Realtor.com predicted in December that the Boise metro area would have the nation’s second-highest combined growth in home sales and listing prices in 2022, behind only Salt Lake City.
Still, Enrico-Crum said now could be an opportune time to buy, before the spring, when interest rates could be higher and demand tends to pick up seasonally.
Enrico-Crum said she doesn’t want people to think, “Oh my gosh, we’re never going to be able to buy a house in Boise.”
“Right now is a really good time to be buying a house,” Enrico-Crum said, “without having to get into that war zone battle of how much over asking am I going to have to pay?”
This story was originally published January 16, 2022 at 4:00 AM.
