Canyon, Ada counties see higher home sales, prices and supply

If you’ve been driving around the neighborhoods of Boise, Meridian, Nampa, or Caldwell recently, you may have noticed a flood of yard signs.

No, no political signs yet. ‘House for sale’ signs.

And despite their frustration with high mortgage rates and record high prices, people are buying up homes, says one real estate agent.

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“It’s a very unique market,” said Brett Hughes, the founder and appointed broker of Boise Premier Real Estate. “I’ve never seen anything like it.”

The number of homes for sale is trending upward in the Treasure Valley, according to Cassie Zimmerman, marketing account manager at the Boise office of The Agency, an international real estate brokerage.

In May, interested homebuyers had 1,629 available homes to choose from in Ada County, 235 more than in April and nearly 30% more than in May 2023, Zimmerman said in a news release. In Canyon County, the number of homes for sale was up 58.5% compared to May 2023, for a total of 1,065 homes.

“This is a welcome increase in housing supply as our market has been considered undersupplied for years,” Jennifer Stiffler, real estate agent with The Agency Boise, said in the release.

Housing supply in Ada and Canyon counties increased in May. Sarah A. Miller [email protected]

A large part of the increase in supply is due to existing homes coming back onto the market.

“When we look at existing home inventories, we are up dramatically,” said Mike Pennington, a longtime real estate agent with John L. Scott Real Estate in Boise, in his latest monthly market report. “This tells us that there is a desire among homeowners to sell and move, but they are having difficulty doing so.”

Ada County had 861 available existing homes in May, an increase of 181 units or 27% from May 2023, Pennington said. Canyon County had 440, an increase of 202 units or 85%.

That equates to about 2.8 months of existing housing supply for Ada County and almost 3.4 months for Canyon County, Pennington said. That’s up from 1.05 months of supply in January for Ada County and about 1.3 months in Canyon County.

A seller’s market occurs when demand for homes exceeds supply, which is happening now because sellers are getting more for their homes while homebuyers compete with each other to get the few homes available. But it also means that people stay put longer because there are fewer options to move.

“A balanced market, or one that does not favor buyers or sellers, is considered a four- to six-month supply,” Stiffler said. “Until then, we probably won’t see much impact on prices.”

The stock of new-build homes is also increasing. Ada County had 554 available housing units in May, an increase of 166 units or 43% from May 2023, Pennington said. Canyon County had 373, an increase of 168 units or 82%.

Yet that is only 2.5 months supply or less.

The supply of new homes in Canyon County, as seen in this aerial view of Caldwell, increased from April to May. Sarah A. Miller [email protected]

House prices level off, reach new high

But even with the increasing supply, you should not expect a drop in stratospherically high house prices.

The average sales price in Ada County was about $552,000, which was up nearly $18,000 from May 2023, according to the Intermountain Multiple Listing Service. In Canyon County, the average sales price in May was about $420,000, an increase of about $5,000.

These are huge increases compared to ten years ago. The average price of a home in Ada County cost about $198,000 in 2013, while the average price in Canyon County was $125,000, according to data from the Intermountain Multiple Listing Service.

The numbers are even more dramatic when we look at the average house price instead of the median. The median is the middle value when you list all sales, while the average is calculated by adding all sales prices together and dividing that number by the number of total sales.

The average sales price in Ada County so far this year reached a new record of nearly $640,000 – nearly $9,000 more than the 2023 median sales price, according to the Intermountain Multiple Listing Service. In Canyon County, the average sales price so far this year is about $468,000, which is about $7,000 more than the 2023 average.

For new construction homes, Ada County’s median sales price so far this year is nearly $643,500, down nearly $10,000 from the 2023 average, according to the listing service. In Canyon County, the average sales price so far this year is about $474,000, about $2,300 more than the 2023 average.

Home sales rise in May

Home sales are also increasing, with Ada County seeing a 14.7% increase in sales compared to May 2023 and Canyon County seeing a 5.4% increase, according to The Agency.

Some of the increase in sales could come from homebuyers who are frustrated by waiting for prices and interest rates to drop and buy anyway, Hughes said.

“What you find on the market now is really fascinating is that regardless of the rates, some people are still moving,” Hughes said by phone.

But home sales are still lower than in recent years as homeowners are under pressure to stay in their homes rather than sell.

It’s common for homeowners to often sell their home and use that money to move to a bigger, better, or nicer home. But that doesn’t happen as often now, Hughes said.

Homeowners who bought their homes in 2020 or 2021 when mortgage rates were closer to 3% don’t want to lose that low interest rate and can’t afford to move up and buy more expensive homes with interest rates now around 7% since their monthly payments go up much higher, Hughes said.

“You have a segment of people who feel trapped in a very good mortgage,” Hughes said.

Because people aren’t moving or selling homes as often, homeowners on both sides are coming under pressure.

“They’re super stuck,” Hughes said. “There are no good options.”

Most people selling homes right now are those who have to do so because of major life consequences, such as death, inheritance or health reasons, he said.

Price reductions for homes in Ada, Canyon counties?

An important metric that is often overlooked is how many homes sell above or below the original sales price.

According to Zimmerman, this has shifted more in favor of buyers.

“Through price negotiations or concessions or price reductions, buyers were able to secure homes in Ada County for an average of 98.5% of the original list price, compared to 99.1% in April,” Zimmerman said. “In Canyon County, the average percentage of original list price received for homes sold in May was 98.1%.”

Zimmerman said 48.8% of homes sold in Ada County saw a price drop before they sold, while 53.9% of homes in Canyon County saw a drop.

When the COVID-19 pandemic hit and remote work became the norm for wealthier white-collar workers, thousands of people moved to the Treasure Valley and bought homes.

As demand for homes increased, sellers were able to take advantage of the increased competition and sell their homes above asking price.

It peaked in March 2021, when sellers were able to sell their homes in Ada County for an average of 104.1% above the original list price and 103.8% in Canyon County.

The reverse happened in the winter of 2022-2023. Sellers sold their homes for an average of 91.4% of the original asking price in Ada County in December 2022 and 90.3% in Canyon County in January 2023.

Meridian apartment buildings located at 10 Mile and Franklin. Sarah A. Miller [email protected]

Interest rates remain high

The Federal Reserve held rates steady on Wednesday and indicated it would cut rates once this year — instead of the expected three times the Fed forecast in March.

Higher interest rates can affect everything from credit cards to student loans, home mortgages to car payments, and can cause people to spend more money to cover the costs. But they also reduce demand for goods and services and help reduce inflation, which is part of the Fed’s goal of keeping employment high and prices stable.

Fed rates have a major impact on mortgage rates, which shot up from about 3.2% for a 30-year mortgage in January 2022 to 7.8% in October 2023, according to Freddie Mac.

Mortgage interest rates still at about 7%.

“Ultimately, the best thing we can do for the housing market is to reduce inflation,” Federal Reserve Chairman Jerome Powell said at a news conference on Wednesday.

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Nick Rosenberger is the Idaho Statesman’s growth and development reporter, focusing on all things housing and business. Nick’s work has appeared in dozens of newspapers and magazines throughout the Pacific Northwest.
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