Want to buy or sell a house? 3 experts share secrets to success in Boise’s slowing market
READ MORE
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.
Expand All
Hopeful would-be homeowners across the Boise and the Treasure Valley watched housing prices leap unprecedented amounts over the past two years, becoming ever less affordable for ordinary Boise-area workers. More recently, interest rates have soared and caused new anxieties for buyers.
The Idaho Statesman invited a panel of three local experts to discuss what they are seeing in the Treasure Valley and offer advice to readers trying to navigate the ever-changing market. They answered questions from the Statesman and readers for an hour on Wednesday. (If you missed the forum, watch it at https://bit.ly/3CAA2wr)
Return to ‘normal’
The experts indicated that we are beginning to see a the return of a more “normal” market.
The new normal may take some getting used to for buyers who watched Treasure Valley home prices skyrocket in recent years.
Key factors for the increase included inventory problems causing high construction costs, and a population boom creating long waiting lists of buyers.
“That is not a normal market,” said Kevin Rice, president of Idaho Mortgage Lenders Association and sales manager at Premiere Mortgage Resources. “It was never going to sustain itself for any long period of time.”
Now, house prices are coming down. Rice believes higher interest rates were the key factor in keeping buyers away.
Some people ask whether the market is crashing. The panelists all said the Treasure Valley market is simply correcting itself.
The local market, like most across the country, had natural trends in the past such as fewer buyers and lower prices around Christmas and the start of the school year. Those trends all but disappeared in recent years. Small downturns could simply be an indication of a return to normal trends.
Inventory is creeping back up. Over the next five to 10 years, as developers’ projects are completed, that could reduce the pressure as well, said Caleb Hood, the city of Meridian’s planning division manager.
No ‘crystal ball,’ don’t delay a purchase
Increasing interest rates have become a significant concern for buyers. But despite high rates, the panelists didn’t recommend putting off home purchases.
Home ownership is still smart long-term investment, according to Cyndi Elliot, a real estate agent with Group One Sotheby’s International Realty since 2000 and a member of the Boise Regional Realtors’ board of directors. Rice described it as the best way to create generational wealth.
Those who want to purchase shouldn’t wait, because no one knows what’s coming in the market, Elliot said. By delaying to see if interest rates will go down, experts said home buyers could inadvertently be pricing themselves out.
“By the the time you know that, the market is going to already have gone up,” Elliot said.
Rice echoed this, recalling buyers he worked with earlier this year who also wanted to wait until rates came down.
“Well, they never came back down,” Rice said. “Now, they’re nearly double.”
The principal and interest payment on a $600,000 mortgage when interest rates were a little over 2% would be enough to cover only a $380,000 loan today, according to Rice. Idaho’s current interest rate is 6.5%, according to U.S. Bank.
“They lost quite a bit of buying power,” Rice said.
Rice advised that buyers should “marry the house and date the rate,” meaning that you don’t have to be stuck with the same interest rate forever. Refinancing later is possible, he said.
For those looking to purchase, Elliot advised finding a good lender and good real estate agent who knows the market, planning early and getting creative in trying to talk to sellers and lenders about what options are available.
“It’s still a great investment in this Valley,” she said.
The panel was moderated by Statesman reporter Paul Schwedelson, who covers growth and development.
This story was originally published October 6, 2022 at 4:00 AM.
