Ok, What's Going On...
Ok, what’s going on in real estate in Boise?
If you are like me your head may be spinning trying to keep up with what is happening in real estate in the Boise area. You may wonder…
Is it a buyer’s market?
Is it a seller’s market?
Is it a good time to sell my home?
Should I really be looking to buy a home?
Can I afford to buy a house with interest rates this high?
All, good and confusing questions…and the answer could be “D” – All of the above
Let’s talk about a buyer vs seller market. A quick explanation (according to Google) is:
“A buyer's market is characterized by slow home sales, lots of available properties and declining home prices. A seller's market is characterized by rapid home sales, shortages of available homes and rising real estate prices.”
It is true that home sales have slowed, homes are taking longer to sell, prices have declined and the inventory of available houses has increased and that is all good for a buyer. It is giving potential buyers an opportunity to view several homes that meet their criteria and make an informed decision. Presently a buyer may not be competing with multiple offers, escalation clauses and waivers of inspection or appraisal contingencies. These are all good things for buyer’s when searching for a new or first home. With interest rates higher, a buyer has a bit more time to shop in their approved price range without the intensity of being bid out. Also, without the escalation of prices and bidding wars, appraisers are in a better position to justify the purchase price and keep the transaction moving forward. So YES, it is a great time to be shopping for a home!
On the other hand, seller’s may have missed the frenzy of multiple offers, escalations, waivers of inspection and appraisal and may be selling at a lower price point than a year ago. Of course we all want to realize the highest amount possible in the sale of our home and it may be disappointing to think you missed the “market”. Good news, we still have a “market” albeit a different market. Although a seller may be selling at a lower price than a year ago, I think we all realize the sales prices were excessive and non-sustaining. When talking with buyers, sellers and existing homeowners everyone agrees that it was out of control and forcing many Idahoans to leave the state in search of affordable housing.
I think it is fair to say that no one wants to lose money on a sale but I also think that no one thinks one party should lose in a transaction either. With the prices settling and both buyers and sellers having time to make informed decisions it is bringing some calm to our local market.
I just read an article which says that there was a home sale spike 14.5% in February as the medial price drops for the first time in over a decade. Check out the article here: https://www.msn.com/en-us/money/realestate/home-sales-spike-14-5-in-february-as-the-median-price-drops-for-the-first-time-in-over-a-decade/ar-AA18U5k1?ocid=hpmsn&cvid=e44ba077a45245619cfdd4760e5dd3d9&ei=22 It states it was the first monthly gain in 12 months and the largest increase since July 2020. They went on to state that sales were 22.6% lower than they were from February of last year. (Please note this is nationwide and not just Boise area). We are seeing bumps in contracts even with the slightest decrease in interest rates.
Even more encouraging is that housing starts shot up to 9.8% in February nationally, with both single family and multi-unit projects posting gains. Building permits are up 13.8%, the largest monthly gain in 2 years! And realtor.com claims that inventory keeps climbing – up 61% from a year ago. Yes, homes are spending more time on the market than last year, but they are still selling quicker than before the pandemic!
So the bottom line for sellers, yes it is a good time to sell your home. You may not realize the huge gain you might have enjoyed a year ago, the values are still up and selling will allow you to move on to your next home or adventure.
Does it make sense to buy a house or rent when interest rates are this high? According to Trulia, buying a home in today’s market continues to be cheaper than alternative rental options. They say this trend will continue until interest rates on a traditional 30-year fixed mortgage surpass the designated “tipping point” of 10.5% on a national average.
So in my view…if you are looking to buy or sell a home this year then I think you should do that! Inventory of available homes is up, prices are attractive, builders are producing lots of new homes, there are great lenders that are able to help you evaluate the best option for your situation and help you create a budget. If you have questions about the market or the process I would welcome the opportunity to visit with you so you have all the information to make the best decision for you!