Ken Sugarman
Residential REALTOR®
Direct (208) 585-1032
Ken@TripleCordRealEstate.com
TripleCordRealEstate.com/Ken
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Though still strong, rising interest rates, economic uncertainty, and increased inventory are causing a definite shift in the Boise housing market. This shift has caused some buyers and sellers to pump the breaks on moving plans as they evaluate costs and wait to see where things might be headed. Although it's impossible to predict the future, we wanted to share a few things that national housing market experts say we can expect in the coming months:
- The number of homes available for sale will grow. We are definitely experiencing that here. In May, there were 1,520 homes available for sale, which is an increase of 166.7% from the same time last year. This means prospective buyers have more options and less competition, allowing them to slow down and process their decisions before they purchase. This has also led to homes staying on the market a bit longer. The average days on market in May was 14 days, which is still low but up 22.7% from last year. We anticipate this number will only continue to increase throughout the year.
- Mortgage rates will likely continue to respond to inflationary pressures. On May 12th, the nationwide average interest rate for a 30-year fixed-rate mortgage peaked at 5.3%. This was nearly double the average of 2.65% on January 7th. Though rates are still at historic lows, this increase has greatly impacted home affordability and played a major role in the demand for mortgages sinking to its lowest level in 22 years.
- Home prices are projected to continue to climb. In May, the Boise housing market hit a new record high with a median sales price of $602,250. It’s possible that prices could drop slightly in the coming months, but as we shared in last month’s update, prices are anticipated to stay on an overall upward trajectory. View various nationwide price appreciation projections for the coming year HERE.
I know there is much to consider in making decisions about real estate. Please know I am always eager to talk with you about your questions and concerns and to be a trusted advisor as you navigate the best steps forward. Don’t hesitate to reach out! Having the opportunity to help my friends, family, and clients is a joy for me!
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For more information and specifics on the current market, please check out the full Boise Regional REALTORS® Market Report HERE.
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Looking for some fun things to do this summer? Check out our event calendar HERE for the latest local happenings. Some events may change, so please make sure to check the website links for the most up-to-date information.
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A recession does not equal a housing crisis. That’s the one thing that every homeowner today needs to know. Everywhere you look, experts are warning we could be heading toward a recession, and if true, an economic slowdown doesn’t mean homes will lose value. The National Bureau of Economic Research (NBER) defines a recession this way: “A recession is a significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators. A recession begins when the economy reaches a peak of economic activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.”
To help show that home prices don’t fall every time there’s a recession, take a look at the historical data. There have been six recessions in this country over the past four decades. As the graph below shows, looking at the recessions going all the way back to the 1980s, home prices appreciated four times and depreciated only two times. So, historically, there’s proof that when the economy slows down, it doesn’t mean home values will fall or depreciate.
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The first occasion on the graph when home values depreciated was in the early 1990s when home prices dropped by less than 2%. It happened again during the housing crisis in 2008 when home values declined by almost 20%. Most people vividly remember the housing crisis in 2008 and think if we were to fall into a recession that we’d repeat what happened then. But this housing market isn’t a bubble that’s about to burst. The fundamentals are very different today than they were in 2008. So, we shouldn’t assume we’re heading down the same path.
Bottom Line
We’re not in a recession in this country, but if one is coming, it doesn’t mean homes will lose value. History proves a recession doesn’t equal a housing crisis.
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Testimonial
We thoroughly enjoyed our home buying experience with Ken Sugarman. Ken maintained a professional demeanor and commanding presence throughout our home search and purchase transaction. We felt comfortable and confident that we were well-informed while navigating a challenging market. Our online-only lender had some unique requirements and Ken worked directly with the seller and our loan processor to take care of all obligations efficiently. I couldn't recommend Ken highly enough, especially if you find yourself apprehensive or anxious about jumping into the market right now. Thank you, Ken! ~Luke Timmons
Read more of my client testimonials HERE.
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What is the Market Really Doing in the Boise Area?
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Are there any homes left to purchase in the Boise area? Does each listing get 10 offers so we have to pay way over the asking price? Is it a bad time to buy in Idaho because these things are true? I am asked questions like this on a daily basis. And, a year ago, I probably would have answered that the market is crazy competitive, and you need to be prepared to pay well over the asking price to secure a property. But, things have taken a turn in the Boise area. The market is definitely softening and becoming more balanced.
Some sellers still think the market is as hot as it was a few months ago and are trying to get even higher prices for their homes than those that sold before them. But, I and other agents in my brokerage are seeing more and more price drops, fewer multiple offer situations, longer days on market, greater opportunities for buyers to wield their bargaining power, and more sellers offering buyer concessions. I have even seen instances where sellers have offered a credit to the buyer at closing to help buy down the buyer's interest rate. Local lenders are also working hard to help buyers by providing extension plans to lock rates and by finding other creative mortgage options. All these factors are definitely helping to make the buying process a little less stressful than it has been in the past couple of years.
No matter what turns the market has ahead, I plan to be steadfast in working hard to help my clients navigate them. It remains a joy to serve you, your family, and friends! And, I am so blessed by each referral you send my way. I appreciate you sharing your confidence in me with others. To all my out-of-state friends, where there's a will, there's a way! I love a good house hunt. There are some amazing properties out there to be found. Give me a call and let me get starting helping you find your little slice of Idaho!
SIDE NOTE: I happened upon an interesting article this week about our local schools. The article stated that there are over 800 current teacher openings in our Treasure Valley. Over $140 million was spent recently to improve teacher pay and benefits in Idaho. These current job openings don't include charter schools and private schools, which I am sure have openings as well. So, if you are a teacher, the Boise area needs you!
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Recommended Service Providers
Need help with a home project, service, or repair? Check out our Homeowners Resources page HERE, where we've listed several different service providers we've used personally or who have been recommended to us. We are always updating this list, so if you have contractors to recommend, please email my Broker!
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Available TripleCord Listings
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