Housing trend finally breaks: Boise-area home prices drop for first time in 15 months
Boise’s skyrocketing real estate market gained national attention as it rose to become the city with the fastest-growing prices in the country. So it may be a relief to hopeful home buyers to see local median home prices fall for the first time in more than a year.
Home sale reports have consistently shown increases. But the market finally broke the trend. The Ada County median home price went from $540,000 in July to $530,500 in August, a 1.8% decrease, according to the latest report from Intermountain Multiple Listing Service.
The last time there was a drop in Ada County prices was May 2020.
Canyon County home prices fell from $414,750 to $410,500, a 1% decrease. And that wasn’t a one-time fluke: Home prices fell in Canyon by 2.1% in July from June’s $424,000. That marked the county’s first decrease in more than a year.
Jennifer Louis, a Boise real estate agent and relocation specialist with Silver Creek Realty Group, said a recent market cooling may have factored into the August drop. Between January and April, home prices went up 27%.
May saw Ada’s biggest median home price jump: 8.7% in one month. June and July then saw a noticeable cooling. Prices rose by just 0.3% in June and 2.9% in July.
“There’s a psychology behind it,” Louis said. “Once people see a couple drops, they put on the brakes and want to see what’s going to happen.”
Of course, the Treasure Valley market is still far above what it was last year. In August 2020, Ada County’s median price was $401,250, translating to a 32.5% year-over-year increase. Canyon County has increased by 32.9% since August 2020’s $308,840.
Experts continue to point to rising inventory levels as the cause for recent market changes. August marked the sixth month in a row in which home inventory went up.
In January, the supply bottomed out when only 260 homes were listed in Ada County and 160 in Canyon. There were 1,124 available homes listed in Ada in August, a 54% increase from June and a 332% increase from the start of the year. Canyon’s inventories are also improving, with 740 homes available in August.
“The new builders released a lot of inventory at the end of summer,” Louis said. “We had this big influx all of a sudden. With more inventory to buy, it can affect prices. There are more options. We saw a lot of the builders dropping prices or doing big promos.”
A new report from Boise Regional Realtors analyzing home value also attributed the “primary driver of home prices in the Boise metro” to “the insufficient supply of homes compared to buyer demand.” While the recent inventory numbers have helped, they still aren’t at a healthy level.
“A balanced market — not favoring buyers or sellers — is typically between 4-6 months of supply,” the report said. “As of July 2021, (the months supply of inventory) for Ada County was at just 1.0 months for existing homes and 1.3 months for new construction, meaning, if no additional homes were listed starting August 1st, the supply of homes for sale would run out in less than two months.”
If time on the market is any indication, there is still plenty of demand. In Ada and Canyon, homes spent an average 14 days on the market. A year ago, homes in those counties were listed for 31 and 35 days, respectively.
Sally Krutzig covers Treasure Valley growth and development. Have a story suggestion or a question? Email Krutzig at skrutzig@idahostatesman.com.
