BOISE, Idaho —
This story originally appeared in the Idaho Press.
Realtor Donna Rogers has been working with the same buyer, who is approved for a loan of up to $400,000, for months. When Rogers first started looking with her, there were one or two houses a week to look at, and many homes under $400,000 were not very high quality.
But now there are five or six homes coming onto the market a week. The inventory of starter homes is increasing, and it’s less stressful for buyers looking in a lower price range.
“It’s wonderful for her because now she has a choice,” Rogers said.
Boise’s market has been tough recently for anyone looking in 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 out there for them.
“It’s kind of heartbreaking because America still has that dream that we get to buy a home here in this country. It’s still a wonderful gift,” Rogers said. “When you have to tell people that the market’s 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 price cut after price cut, some by tens of thousands of dollars. As supply rises and demand for Boise homes cools off, home prices drop. And no one is helped more by price cuts than people looking in the lower section of the market.
In February, Intermountain Multiple Listing Service data showed 11 quality homes in Boise listed at less than $450,000, the Idaho Press reported at the time.
The lack of supply was prohibitive for anyone trying to get into the market at a lower price point. Large swaths of the market were locked out.
As of Wednesday, 193 single-family homes were listed in Boise on the Intermountain Multiple Listing Service for under $450,000, said Mary Barnett, managing broker at Amherst Madison Real Estate Advisors.
Rogers, who works with both sellers and buyers, sees the impact on both ends. A few months ago, Rogers did a comparative market analysis for a southeast Boise three-bed, two-bath listing. She felt the house could be listed between $435,000 and $445,000.
“Even if you list it for 435, you assume you’re going to get some multiple offers, and it’s probably going to drive it up a little bit,” Rogers said.
But recently she redid the comparable market analysis using the past couple of months of data and realized the home she was working with would be overpriced in that range. The home, at 1,216-square-feet, hit the market at $409,900.
However, the outlook isn’t sunny for all buyers. Interest rates have increased which has removed people from the buying pool. For example, if someone was approved for up to $400,000 by a lender back in the winter, their buying power may have dropped into the $300,000s, Barnett said.
For people who can find a home in their price points, there are many more options now and more negotiating power. Sellers are paying closing costs again or buying down the interest rate, Barnett said. This contrasts with the past couple years when sellers didn’t give any concessions.
But while some people have been removed from the buying pool, this drop in demand in the market is also what is helping houses sit on the market longer. A lot of agents and homeowners got into the mindset in Boise’s overheated market that if a house doesn’t sell immediately it’s overpriced, Barnett said.
“You just have more competition, it’s going to take longer to sell,” Barnett said. “I think everyone needs to take a deep breath.”
The last two years were not fun for buyers, said Christina Ward, realtor with Christina & Company Keller Williams Realty Boise. Some clients wrote eight to 10 offers last year, she said, and it was tough to deal with the heartache of making offers and getting beat out.
But now clients can go to a home, go see it again and think about the decision. Buyers can negotiate things like inspection repairs.
“That’s been really fun for us to be heroes for the buyers and help them get their best house and feel like they’re getting a good deal,” Ward said.
But at the same time, prices are not coming down. Ada County has appreciated at a 5.6% appreciation rate, which Ward said is still above average. However, Ward said last year it was 34.6% appreciation.
Though it’s still a buyer’s market, inventory is up from record lows during the past couple years.
“Whatever happened the last two years, we just have to forget about it,” Ward said. “It’s not going to happen again.”
Advice for first-time homebuyers:
Christina Ward, realtor with Christina & Company Keller Williams Realty Boise, thinks it's always a good time to buy as long as two things happen:
- You plan to own it for a long time. Real estate goes up and down but eventually, it goes up again, she said.
- You can afford it.
"I want to see young people buy houses," Ward said.
This story originally appeared in the Idaho Press. Read more at IdahoPress.com
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