Over the past few years, the Boise real estate market has seen a drastic increase in prices. Out-of-state buyers flocked to Idaho from all over the country during the pandemic years seeking affordability and quality of life. The increased demand for Treasure Valley real estate led to record-breaking sales and prices.

This past year saw the market come back down to Earth. Coupled with increases in mortgage rates, Boise and its surrounding areas experienced a pullback in the real estate market as prices leveled out, inventory increased, and sales dipped.

As we kickoff 2023, buyers have a great opportunity to take advantage of the market cool off. For the first time in a long time, the real estate in Boise, Eagle, Meridian, and the rest of the Treasure Valley has an abundance of affordable homes.

The Current Data

If you take a look at the current data on the real estate market in Ada County, the numbers support a trend towards affordability. The median sales price dropped to $515,000 in December 2022, a substantial decrease from the record-high of $602,250 it reached in May 2022. There are more options available below $500,000 in the Boise area than any time in recent memory.

According to Boise Regional Realtors, the most recent market statistics from December 2022 show inventory is up 151.2% since this time last year. The increased inventory has created a market where buyers are able to choose from more options when shopping for a new home. Now, buyers have the upper hand when negotiating with sellers about the terms of the deal.

The Average Days On Market has also seen a substantial increase in the latter half of 2022. At its current number of 65 days, buyers are not rushed into making quick decisions in order to get their offers accepted. Also, we have seen a jump in the number of price reductions by motivated sellers who can’t wait 60-90 days to sell their property.

For the last several months, the real estate market in Boise, Eagle, Meridian, and the rest of the Treasure Valley has moved towards more balance. After setting record-breaking prices from 2020-2022, the market was poised for a correction. Now, we are seeing the pendulum swing back towards affordability.

Date The Rate, Marry The House

Interest rates continue to be a topic of discussion for the real estate industry. Starting in the beginning of 2022, we saw the 30-year Fixed Rate Mortgage increase from below 3.5% to over 7% by October 2022. This doubling of rates forced many buyers to pump the brakes on their home search as monthly payments soared. The housing market was directly affected by this development.

As we look ahead, the question becomes where will rates head in 2023? There is reason to be optimistic. The interest rate for a 30-year fixed-rate mortgage in the U.S. is expected to drop to 5.25% by the end of this year. This is good news for the real estate industry as lower rates will likely lead to increased activity and a return to normalcy for the housing market.

A popular phrase that popped up during Spring 2022 was “Date the rate, marry the house.” It means that buyers are committing to a long-term relationship with the house, but they can dump the rate at a later date when they refinance.

This idea is important to keep in mind for buyers currently looking to enter the market. With housing prices at affordable levels and interest rates expected to drop, buyers have an opportunity to find a good deal on a house right now and refinance down the road.

Investor Specials

Another outcome of the market shift is the return of “Investor Specials” listed on the MLS. During the previous sellers market, it was nearly impossible for investors to find good deals without buying off-market. There was too much competition and multiple offer situations created bidding wars that drove prices even higher.

Today, we see many properties listed on the MLS that are fixer-uppers and/or at discounted prices. Investors have a prime opportunity to find these properties in the current market. Whether you’re looking for a long-term or short-term rental, a fix-and-flip, or looking to grow your investment portfolio, now is the time for investors to take advantage of this buying opportunity.

Now Is The Time

In 2023, we expect to see an abundance of opportunities for buyers in the real estate market. In Boise, Eagle, Meridian, and the rest of the Treasure Valley, prices have returned to affordable levels after the recent surge of during the pandemic years. Interest rates are forecasted to return towards 5% by the end of the year making it a good time for buyers to start or continue their home search. Investors especially have plenty of opportunities to find discounted properties listed on the MLS.

If you’re looking for a new home or investment property going into 2023, now is a good time to get into the market. Working with a team of professionals like McFerrin Real Estate, buyers and investors will be able to take advantage of these amazing opportunities. Contact our team today to get started.