This new data shows how hard Boise-area home sellers have been hit by market’s downturn

Oh, how the once-mighty Boise home-price ascent is falling.

More than two of every three homes for sale in Boise had a price decline in September, the highest share in the U.S., the real estate agency Redfin said Wednesday in a report on 91 housing markets it analyzed.

That compares with 25% nationwide, a record apart from two months at the start of the COVID-19 pandemic in April and May 2020.

Some homes are still selling above asking prices, even as prices fall in response to the inflation-fighting runup in mortgage interest rates. But only about one in seven Boise houses (13.7%) sold above their final list prices in September, a lower share than any of the other 90 markets, Redfin said.

Contrast these drops with the fourth quarter of 2021, when prices had climbed so much that Boise had the most overvalued housing prices in the country, according to Fitch Ratings.

Contrast them with 2020 and 2021, when pandemic-induced in-migration threw gasoline on a Boise market already on fire, and when desperate buyers wrote letters to sellers begging for their houses, only to be greeted with silence.

And not just asking prices are falling. Sales are, too. Boise had the nation’s fourth-highest rate of decline in home sales in September, down nearly 38% from September 2021, Redfin said.

Prospective buyers have dropped out because the rise in interest rates has made housing less affordable by boosting monthly payments as much as 50%.

Some prospective sellers of existing homes have dropped out as well, because they can’t afford higher-interest mortgages on move-up homes. And some builders have cut back, worried that their houses won’t sell.

Still, the number of houses for sale in Ada County is double what it was 12 months ago, and the number of newly built homes for sale in September was more than 2½ times higher than it was a year earlier, according to the Intermountain Multiple Listing Service.

That’s a big surge in supply. Coupled with the big surge in interest rates, it is shattering dreams of home sellers hoping to make as much money as their friends and neighbors did six to 12 months ago. Real estate agents are telling them to settle for less.

Prices in Ada County have fallen for four straight months, the Idaho Statesman reported Oct. 12. Ada County’s median home-sale price reached an all-time high of $602,250 in May, an amount unthinkable only a few years earlier. By September, the median had slid to $540,000. In Canyon County, the September median was $426,990.

Might the market stabilize soon? Don’t bet on it.

Nationwide, “the housing market is going to get worse before it gets better,” said Chen Zhao, Redfin’s economic research lead, in a news release. “With inflation still rampant, the Federal Reserve will likely continue hiking interest rates. That means we may not see high mortgage rates — the primary killer of housing demand — decline until early to mid-2023.”

Local real estate leaders remain upbeat and say the Boise market is undergoing a necessary correction, nothing worse.

“We’re not crashing,” said Jim Shipman, managing owner and Idaho market leader for Colliers, the commercial real estate agency, on Wednesday at the agency’s annual market-outlook conference. “We’re normalizing.”

Redfin said its data cover the 91 U.S. metro areas with populations of at least 750,000.

Boise has fastest-cooling market in US: SmartAsset

Separately, financial site SmartAsset said Boise’s housing market is cooling off faster than any other Top 100 market in the nation, based on August data.

“Boise has the sixth-lowest ratio of number of sold houses to new listings (0.49), meaning that almost twice as many houses are being listed relative to ones that are sold,” SmartAsset said in a new report Oct. 4. “The median days a house sits on the market is 20, and this figure is almost 186% higher than one year previously.”

SmartAsset said it based its rankings on eight Zillow price-reduction and decreased-demand metrics for August 2022 compared with August 2021 in the 100 largest metro areas, 92 of which had complete data.

This story was originally published October 19, 2022 at 4:36 PM.