Agent: ‘I’m not getting offers.’ What just happened to Boise’s hot housing market?
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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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When trying to sell a house a year ago in Eagle’s upscale Legacy subdivision, Shauna Pendleton remembers receiving 15 or 20 offers within days.
Now, she has a house listed in the same area that’s had five showings in two weeks and one offer.
It’s a stark contrast, especially at higher price points, from when Boise’s housing market was among the hottest in the country and receiving national attention for its bidding wars and rapid sales.
“My listings that are priced anywhere from $50,000 to $150,000 under market are not getting any showings,” said Pendleton, a listing principal agent with Redfin, by phone. “I’m not getting offers. Nobody is coming to my open houses. It’s like the buyers just disappeared. They’re still out there, but they’re not in a rush.”
Redfin, a real estate brokerage, reported that 41% of Boise home sellers dropped their prices in April, which is the highest percentage of the 108 metros analyzed. The average percent of original list price received in April was 101%, a decline from 104.9% in April 2021, according to the Boise Regional Realtors.
Though the median price of a single-family home in Ada County in April set another record at $595,000, according to the Intermountain Multiple Listing Service, the list-price data point to the housing market cooling off.
“(Buyers) are nervous, they’re scared, they’re worried about overpaying. They’re worried about their mortgage payments,” Pendleton said. “... The sellers are really stressed out because they’re like, ‘Where did the buyers go and why isn’t my house selling?’ Everything going on in our world is causing a lot of people to be scared.”
She blames rising mortgage-interest rates. Since mid-April, interest rates for a 30-year fixed mortgage have been above 5%, according to mortgage buyer Freddie Mac. They were previously historically low, around 2% or 3% in recent years.
“Interest rates are the No. 1 driver,” Pendleton said.
Rising rates mean higher monthly payments and tens of thousands of extra dollars to pay over the mortgage’s 30 years. So even though a house’s list price may be dropping, that doesn’t necessarily mean it’s any more affordable to buy a home if you’re using a loan.
So there’s no relief in sight for ordinary Boise-area workers seeking to buy homes on ordinary Idaho incomes. The lack of affordable houses amid an influx of buyers from elsewhere with more money — some with enough to pay cash — has overrun rising wages and contributed to rising rents and homelessness.
While buyer demand might not be as scalding hot as it was last year, Idaho’s capital city remains a strong seller’s market.
Consider how little housing there still is for sale. One way of measuring inventory is to calculate how long it would take for all the homes on the market to sell if no new ones came on the market. In Ada County in May, there were just 1.3 months of inventory of existing homes, according to Christina Ward, an associate broker for Christina & Co. of Keller Williams Realty Boise.
That’s actually more than the less-than-one month of inventory in recent years, but agents say a balanced market wouldn’t be achieved until there’s at least four months of inventory.
The Boise Regional Realtors don’t regularly track listing price drops. Through a search of Intermountain Multiple Listing Service data, Ward found 102 price reductions out of the 697 existing homes sold in May, or 14.6%.
Like Pendleton, Ward has seen fewer buyers looking at homes. Two weeks ago, Ward listed four houses in the Treasure Valley, and all four had fewer showings than she expected.
“That’s really the first start of a shift … there’s less buyers,” Ward said by phone.
One of those homes was intentionally priced low. It received 17 showings and one offer. A year ago, it likely would have been much more competitive.
“If I had that happen three or four years ago, my sellers would have thought I was a hero,” Ward said. “It’s just we’ve been an inappropriate market for the last two years.”
Buyers back down, Ward said, when prices become unaffordable. The median price of a home in Ada County increased 58.7% from April 2020 to April 2022. As a result of the interest rates and price increases, a shift in buyer behavior is underway.
The median price increased in April, but Ward described these shifts as similar to a golf swing: slow at first and then accelerating fast.
Pendleton said she recommends that sellers make one big price drop rather than smaller, incremental drops, to motivate buyers.
“We’re in an adjustment period,” Pendleton said. “Buyers and sellers both have to adjust. That’s going to take some time.”
This story was originally published June 3, 2022 at 4:00 AM.
