Is the Boise Housing Bubble Deflating? 89.32% increase in listings. Home prices dive 11.42%
Boise, Idaho has experienced a crazy rise in its housing market, fueled by an influx of new residents, a strong economy, and a limited housing inventory. March 2023 Boise Regional REALTORS® housing market updates.
This boom has left many wondering if the skyrocketing prices are sustainable and if the housing market bubble is on the brink of bursting. Recent data from Ada County (Provided by BRR) Boise Regional REALTORS® https://www.boirealtors.com/ suggests that the once red-hot market is showing signs of stagnation. In this video we'll dive into the latest housing market trends, dissecting the numbers and exploring whether the Boise housing bubble is indeed deflating or if it's just another temporary lull in an otherwise unstoppable growth.
I. Introduction
In recent years, Boise has experienced an incredible surge in its housing market. Property values skyrocketed, bidding wars became the norm, and homes sold at record-breaking paces. The city has been in the spotlight, attracting new residents and investors alike. However, recent data suggests that the once red-hot market may be in the crash territory. Actually, this is good to bring up that normally any market that crashes in price by more than 15% is generally considered a (crash) As we witness signs of stagnation, many are left wondering: Has the Boise housing market Popped, deflating or ready for take-off…. Again as many other agents would have you believe.
We will delve into the factors that contributed to Boise's booming housing market, examine the current trends and indicators that suggest a possible slowdown, and explore the potential implications of a deflating bubble for home buyers, sellers, and investors. Our aim is to provide an in-depth analysis of the current state of the Boise housing market, as well as offer valuable insights and strategies for navigating the ever-changing landscape of the real estate market. So, whether you're a prospective home buyer, a seller, or a real estate enthusiast, this comprehensive analysis of Boise's housing market will provide you with valuable information to help you make informed decisions.
II. Background on Boise's Housing Market Growth - Additional Data
To further illustrate the rapid growth of Boise's housing market, let's take a closer look at some specific data points: as this is needed to paint you a picture.
NEED to Know PRO's and CON's About BOISE, Idaho!
Population Growth Rate: According to the U.S. Census Bureau, between 2010 and 2020, the population of Boise increased by 21.6%, making it one of the fastest-growing metropolitan areas in the country.
Median Home Price Increase: Data from Zillow shows that the median home price in Boise increased by more than 119.75%. between 2016 and 2023, with the average home price soaring from approximately $220,000 in 2016 to over $483,450 by the end of March 2023.
Housing Inventory Shortage: The National Association of Realtors reported that, as of September 2021, Boise's housing inventory was at a mere 0.6-month supply, far below the 6-month supply considered to be a balanced market. This shortage has only intensified the competition for available homes.
Employment Growth: The Bureau of Labor Statistics reports that Boise's unemployment rate consistently remained below the national average throughout the past decade. Between 2010 and 2020, the city's job growth rate was 26.5%, well above the national average of 16.5%.
Rental Market: With the surge in home prices, Boise's rental market has also seen significant growth. According to RentCafé, the average rent in Boise increased by 37% between 2016 and 2021, from $898 to $1,232 per month. We now know this is changing. If you want to find out more about rent, check out our (Insert video here)
This data underscores the dramatic expansion of Boise's housing market in recent years. However, it's essential to examine current market conditions and trends to determine whether this rapid growth is showing signs of slowing or if a market correction may be imminent.
III. Analyzing the Current Market Trends
The Ada County real estate market has undergone significant changes from March 2022 to March 2023, with a YTD comparison highlighting the major shifts. One notable trend is the increase in total active residential listings, which has surged by 89.32%, from 599 to 1134. This increase in the number of active listings suggests that more homeowners are putting their homes on the market, leading to greater supply in the market.
Total pending residential listings have dropped by 39.68%, from 1502 to 906. This means that fewer homes are under contract, indicating that we are seeing a future decline in demand. As a result, the total number of single-family homes sold has also decreased by 15.73%, from 2,155 to 1,816. The decrease in home sales can be attributed to the reduction in demand, as evidenced by the decline in total pending residential listings. Many Real Estate agents would have you believe that the housing market is heating up, but from the numbers that would be false.
The median price of single-family homes sold has fallen by 11.42%, from $553,187 to $489,990. The decline in home prices is likely due to the increase in supply and decrease in demand, which leads to a drop in prices. The average price of single-family homes sold has also declined by 8.40%, from $652,565 to $597,731. This suggests that both median and average home prices are continuing to fall across the Boise housing market. Days on market have increased from 29 to 73. This indicates that homes are staying on the market for longer periods before being sold, which is likely due to the reduction in demand. Total dollar volume has decreased by 22.81%, from $1,406,277,849 to $1,085,479,286. This represents a significant decrease in the total amount of money generated by the real estate market in Ada County.
Existing home sales have experienced a more significant decline than new construction homes. Existing homes sold have dropped by 27.13%, from 1,441 to 1,050. This is a much larger decline than the 7.28% increase in new construction homes sold, from 714 to 766. The median price of existing homes sold has decreased by 11.21%, from $535,000 to $475,000. In contrast, the median price of newly constructed homes sold has decreased by 13.80%, from $599,207 to $516,495.
Moreover, the average price of existing homes sold has declined by 8.66%, from $631,608 to $576,907, while the average price of newly constructed homes sold has declined by 9.87%, from $694,862 to $626,275. The days on market for existing homes have increased from 23 to 53, whereas the days on market for newly constructed homes have increased from 40 to 102. The existing dollar volume has dropped by 33.44%, from $910,146,466 to $605,752,592. This decline is much larger than the 3.31% decrease in newly constructed dollar volume, from $496,131,383 to $479,726,694.
Is the housing market still crashing or stagnant? Home prices drop and inventory has more than doubled! The US housing market is experiencing a dramatic drop in home prices, but inflation and Mortgage interest rates continue to hurt home buyers.
Boise Regional REALTORS® March 2023 housing market update for Boise (ADA county)
These changes indicate a shift in the Ada County real estate market, with existing home sales seeing more significant declines in various aspects compared to newly constructed homes. The decrease in demand, increase in supply, and drop in home prices suggest that Ada County's real estate market is experiencing a downturn. Additionally, the increase in the days on the market indicates that homes are taking longer to sell, which could cause further price declines in the future.
IV. Market Predictions and Implications
Based on the changes we saw in the Ada County real estate market from March 2022 to March 2023, it is clear that the market is still cooling and remains stagnant. Many are expecting an all-out crash, but keep in mind we have 20% decline in home prices since May 2022. While newly constructed homes have seen more moderate changes, existing home sales have experienced significant declines in various aspects. These changes have implications for both buyers and sellers in the market and can provide insight into what to expect in the future.
One of our predictions for the market is that we will see the trend of increasing active residential listings will continue. With a nearly 90% increase in listings from the previous year, it is likely that this trend will continue in the coming months. This means that buyers will have more options to choose from, and sellers may face more competition.
Another prediction is that the median and average prices of single-family homes sold will continue to decrease. With an 11.42% decrease in median price and an 8.40% decrease in average price from the previous year, it seems likely that prices will continue to fall. This may be due to the increase in active residential listings and the decrease in total dollar volume, as more homes on the market could lead to lower prices.
The increase in days on market is also a trend that is likely to continue. With an increase from 29 to 73 days on market for all residential listings, it is clear that homes are taking longer to sell. This may be due to the increased competition among sellers or a decrease in demand from buyers.
For existing homes specifically, it seems likely that the trend of significant declines in sales and dollar volume will continue. With a 27.13% decrease in existing homes sold and a 33.44% decrease in existing dollar volume from the previous year, it is clear that existing homes are facing challenges in the market. This may be due to factors such as age and condition, which could make them less desirable to buyers.
In contrast, newly constructed homes have seen more moderate changes, with a slight increase in sales and a small decrease in dollar volume. However, the increase in days on market for newly constructed homes may indicate that these homes are also facing some challenges in the market.
Overall, these predictions suggest that the Ada County real estate market is in a period of transition. Buyers will have more options and may find lower prices, while sellers may face more competition and longer days on market. As for the future, it is unclear how long this shift will last or what other changes may occur in the market. However, by monitoring these trends, buyers and sellers can better understand the current state of the market and make informed decisions.
V: Stagflation or the stagnant housing market.
When we use the term “Stagflation,” it is a situation where an economy experiences both stagnant economic growth, low employment rate, and high inflation. While the Boise real estate market has seen tremendous growth in the past, we believe it is now experiencing a period of stagflation.
The median sales price of single-family homes sold has fallen by 11.42% from $553,187 in March 2022 to $489,990 in March 2023, and the average price declined by 8.40% from $652,565 to $597,731. At the same time, the days on the market have increased from 29 to 73.
The significant increase in home prices over the past few years, combined with rising interest rates and a shortage of affordable homes, has led to a slowdown in demand. As a result, we are now seeing stagnation in the real estate market. Homeowners who purchased their homes during the height of the market may find themselves underwater on their mortgages, unable to sell their homes for what they owe.
FED's SHOCKING Move: US Housing Market is On Fire.
This situation has put many homeowners in a precarious position, and it is one that will likely persist until the market stabilizes. The Boise real estate market is currently experiencing a period of stagflation, which is characterized by stagnant economic growth and high inflation. The data shows that the market is cooling off, with home prices falling and days on the market increasing. While this may be good news for homebuyers looking for more affordable homes, it is a challenging situation for homeowners who may be stuck in their current homes due to a lack of demand. As the market continues to adjust, it will be interesting to see how these trends evolve and what impact they will have on the broader economy.
In conclusion, the Ada County real estate market has experienced significant changes over the past year. The data shows that while the number of active residential listings has increased, the number of pending residential listings has decreased. Additionally, there has been a decline in the number of single-family homes sold, as well as a decrease in the median and average prices of these homes.
The days on market have increased, indicating that homes are taking longer to sell. Furthermore, the total dollar volume has decreased, suggesting that the market may be slowing down. Interestingly, existing homes have experienced a more significant decline than newly constructed homes.
These changes in the Ada County real estate market suggest that the market is shifting, and this shift may have implications for both buyers and sellers. Buyers may find that they have more options available to them, while sellers may need to adjust their pricing strategies and marketing efforts to attract buyers.
Moving forward, it will be interesting to see how the Ada County real estate market continues to evolve. Will we see a continuation of the current trends, or will the market shift in new and unexpected ways? Only time will tell, but one thing is for sure - anyone looking to buy or sell a home in Ada County should keep a close eye on the market and be prepared to adjust their strategies accordingly. The biggest standout data point is the 89.32% increase in total active residential listings in Ada County, Idaho from March 2022 to March 2023. This significant increase in the number of residential listings indicates a major shift in the real estate market in Ada County. Additionally, the decline in total dollar volume by 22.81% is also a significant data point that suggests a decline in overall real estate market activity in the area.
Good News Realty Group LLC, located in Boise Idaho.
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We Offer a Comprehensive Real Estate Market Analysis and Examine the Current State of the Housing Market. If you're looking to buy or sell real estate in Idaho, follow our updates.
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