Boise’s starter home inventory jumps

“When you have to tell people that the market is too expensive for them to buy the American dream, it’s hard.”

BOISE, Idaho—

This story originally appeared in the idaho press.

Real estate agent Donna Rogers has been working with the same buyer, who was approved for a loan of up to $400,000, for months. When Rogers started looking with her, there were one or two houses a week to look at, and many houses under $400,000 weren’t very high quality.

But now there are five or six houses coming on the market every week. Beginning home inventory is increasing and less stressful for buyers looking for a lower price range.

“It’s wonderful for her because now she has a choice,” Rogers said.

The Boise market has been tough recently for anyone looking for a lower price range. It’s been depressing, Rogers said, when a buyer works hard and gets approved for up to $350,000 because there’s nothing available for him.

“It’s kind of heartbreaking because America still has that dream of being able to buy a house here in this country. It’s still a wonderful gift,” Rogers said. “When you have to tell people that the market is too expensive for them to buy the American dream, it’s hard.”

But now, anyone scrolling through Boise homes on real estate sites can see one price cut after another, some in the tens of thousands of dollars. As supply increases and demand for Boise homes cools, home prices fall. And no one is helped more by price cuts than people looking at the bottom end of the market.

In February, Intermountain Multiple Listing Service data showed 11 quality homes in Boise listed for less than $450,000, Idaho Press reported at the time.

The lack of supply was prohibitive for anyone trying to enter the market at a lower price. Large swaths of the market were blocked.

As of Wednesday, 193 single-family homes were listed in Boise on the Intermountain Multiple Listing Service for less than $450,000, said Mary Barnett, managing broker for Amherst Madison Real Estate Advisors.

Rogers, who works with both sellers and buyers, sees the impact at both ends. A few months ago, Rogers did a comparative market analysis for a three-bedroom, two-bathroom listing in southeast Boise. She felt that the house could be listed for between $435,000 and $445,000.

“Even if you list it for 435, you assume you’re going to get a lot of offers, and it’s probably going to push it up a little bit,” Rogers said.

But he recently redid the comparable market analysis using the last two months’ data and realized that the house he was working with would be overpriced in that range. The 1,216-square-foot home was listed for $409,900.

However, the prospects are not good for all buyers. Interest rates have increased, which has removed people from the buying pool. For example, if a lender approved someone for up to $400,000 in the winter, his purchasing power may have dropped to $300,000, Barnett said.

For people who can find a home at their price points, there are now many more options and more bargaining power. Sellers are either paying closing costs again or buying down the interest rate, Barnett said. This contrasts with the last two years when the sellers did not give any concessions.

But while some people have been weeded out of the buying pool, this drop in market demand is also what is helping homes stay on the market longer. Many agents and homeowners thought in Boise’s overheated market that if a house doesn’t sell right away it’s too expensive, Barnett said.

“You just have more competition, it will take longer to sell,” Barnett said. “I think everyone needs to take a deep breath.”

The past two years have not been fun for buyers, said Christina Ward, a real estate agent with Christina & Company Keller Williams Realty Boise. Some clients wrote 8 to 10 offers last year, she said, and it was hard to deal with the angst of making offers and being beaten.

But now customers can go to a house, see it again and think about the decision. Buyers can negotiate things like inspection repairs.

“It’s been a lot of fun for us to be heroes to buyers and help them get their best home and feel like they’re getting a great deal,” said Ward.

But at the same time, prices are not going down. Ada County has appreciated at a 5.6% appreciation rate, which Ward said is still above average. However, Ward said last year that it was a 34.6% appreciation.

Although it’s still a buyer’s market, inventory has risen from record lows over the past two years.

“Whatever happens in the last two years, we have to forget about it,” Ward said. “It’s not going to happen again.”

Tips for First Time Home Buyers:

Christina Ward, a real estate agent with Christina & Company Keller Williams Realty Boise, believes that it is always a good time to buy as long as two things happen:

  1. You plan to have it for a long time. Real estate goes up and down, but eventually goes back up, she said.
  2. You can afford it.

“I want to see young people buy houses,” Ward said.

This story originally appeared in the idaho press. read more on IdahoPress.com

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