Idaho continues to be one of the most highly ranked states for quality of life and fast growth. Boise, the City of Trees, is a hub for tech industries, small businesses, delicious breweries, and people seeking a city life with a small-town vibe. In the last several years, Idaho’s population has grown significantly and at an accelerated rate, resulting in a housing market boom and inventory crisis. In 2021, a listing was typically pending in less than 24 hours. However, the increase in interest rates in the latter part of 2022 and all of 2023 has created a noticeable shift in the real estate market. So, what does that mean for real estate in the 208?
According to Boise Regional Realtors, the housing supply decreased by 11.5% in January, down to 1,035 in Ada County and 710 in Canyon County, a decrease of 1.9%. Six months is typically considered a balanced market where supply and demand are about the same, and Ada County is currently hovering around two months.
Although the median sales price has decreased In both Canyon County and Ada County year over year, we saw an uptick in Ada County of 4.7% and 1.2% in Canyon County.
In the current Idaho real estate landscape, buyers and sellers will find themselves in a position in which they will have to navigate the complexities posed by elevated interest rates, low inventory, and overall uncertainty of the housing market.
Buying
With an inventory supply of just under two months, in some areas, prospective buyers have the advantage of sidestepping the bidding wars that we once experienced in 2021. Although interest rates are holding steady between the mid-6s and low 7s, buyers can explore potential refinancing options when interest rates become more favorable if they find the perfect place to call home.
Selling
Depending on how long a seller has been a homeowner, there is an opportunity to capitalize on a favorable seller’s market. Although sale prices have been on the decline year over year, the drastic relocation spike in Idaho elevated home prices overall, still allowing sellers to maximize their return on their investment.
Looking Forward
Idaho’s housing market is unique in that the dynamic of heightened demand and limited supply characterizes it. When looking ahead to 2024, uncertainty remains when we consider inflation, interest rates, and the election year. While the forecast of those three variables is unknown, one thing is for sure – demand outweighs supply, thus creating scarcity regardless of interest rates. It is this one specific factor that an on-the-fence buyer should take into consideration, as the market could unfavorably shift to the bidding war days of 2021 if and when interest rates come down to a more manageable number.
Whether you’re considering buying or selling, it is essential to work with a REALTOR who will help you strategically navigate Idaho’s specific market dynamics.