Want to sell your Boise-area house? You’ll have to do more work now. What to know
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Affording Boise: Homeownership
Soaring rents. Skyrocketing home prices. The double-digit rates of increase in the costs of Boise-area housing until 2022 have created increasingly urgent problems for low-income, working-class and even moderate-income Idahoans who need places to live. Affording Boise is a series of Idaho Statesman special reports on housing. This collection focuses on homeownership. A separate collection focuses on rental homes, including apartments.
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Real estate agent Jennifer Louis was recently working with a client to sell a home. Then a neighbor selling a home down the street, which Louis was using as a comparable, cut its price by $50,000. Nearby, a deal to buy another house fell apart.
All of a sudden, Louis had to adjust her plans.
As Boise home prices drop, sellers are learning the hard way. After two years of soaring prices, the median price of a home in Ada County has declined for three straight months. Significantly more homes for sale and fewer homebuyers are combining to create a new normal for the Treasure Valley’s home-sales market.
The median price of an Ada County home in August was $565,000, according to the Intermountain Multiple Listing Service. That’s a $24,990 drop from July and a $37,250 drop from when the price peaked in May. In Canyon County, the median price in August was $440,990, marking four straight months of declines.
Ada County’s price is still a 6.5% increase from August 2021, but the declining prices indicate what’s happening in the market now. Louis called it a “real estate reality check.”
While sellers may not be making as much as they were just months ago, the result is what experts call an overall healthier environment.
“I liken it to jumping into a cold lake,” said Joel Hess, owner and managing broker of Realty One Group, by phone. “It takes you a second to catch your breath. Once you catch your breath, you realize the water’s cold, but I’m OK.”
Redfin, a real estate brokerage, reported 69.7% of Boise sellers dropped their asking price in July, the highest percentage among the 97 metros analyzed.
On Friday, Hess searched the Multiple Listing Service and in Ada County found 144 new listings in the previous three days and 90 price drops on previously listed houses in those same three days.
As measured by inventory, Boise is still a seller’s market. Following six consecutive months of increasing inventory, there were 2.8 months of inventory in August, the same as in July. That means that if no more homes came on the market, it would take 2.8 months for all the homes on the market to sell. Real estate agents say a balanced market has four to six months’ supply of houses.
In August, Ada County homes spent an average of 29 days on the market, up from 21 days in July and a big change from when home after home sold within a few days of being put up for sale.
Some of that is still happening, Hess said. He recently helped sell a home that received multiple offers within two days and sold for $20,000 more than the asking price. That’s far from the norm anymore.
The number of buyers has tapered off as mortgage rates have increased. Buyers who have stayed on the hunt have benefited and are wielding their newfound leverage.
“A year ago, if a neighbor sold a house for $500,000, you could price yours for more than $500,000 just a few weeks later,” Silvercreek Realty Group’s Louis said by phone. “Likely, it would sell for more. Right now, that’s not happening anymore.”
With so few homes for sale in the previous two years, buyers often sacrificed repairs. They were willing to pay for those themselves. That’s also changed, Louis said. Now that buyers have more choices, it’s becoming more common for them to ask for the seller to pay for repairs like a new roof or a paint job.
Sellers are forced to up their game.
“If their house isn’t turnkey and they’re priced too high, they’re going to have to come back down to where the market is,” Louis said.
Hess believes sellers can still succeed. If they stage their home well and market it properly, it will lead to the right result. But when the market was scalding hot, he said some sellers got away with not following that procedure. They can’t skip steps anymore.
Hess also recommends pricing ahead of the market. Since prices are declining, he considers what the home would be worth next week rather than what it was worth months ago.
“I think not all sellers have come to terms yet with the fact that their house may not be worth as much as their neighbor’s house sold six months ago,” Hess said.
Other details from the latest monthly report:
- After peaking at $459,995 in May, Canyon County’s median price previously dropped from $444,990 in June to $441,995 in July.
- Of the 735 homes sold in Ada County in August, 280 sold for less than $500,000. In Canyon County, 251 of 388 homes sold for less than $500,000.
- After 931 homes sold in Ada County in August 2021, 732 sold this past August. A major difference is 1,124 homes were listed on the last day of the month last year compared with 2,374 this year.
- Highest median prices: Eagle, $959,950; Northeast Boise, $950,000; North Boise, $697,000.
- Lowest median prices: Wilder, $220,000; unincorporated Canyon County, $356,000; Garden City, $379,950.
This story was originally published September 13, 2022 at 4:00 AM.
