“When you have to tell people the market is too expensive for them to buy the American dream, it’s tough.”
This story originally appeared in the Idaho Press.
Realtor Donna Rogers has been working for months with the same buyer, who is approved for a loan of up to $400,000. When Rogers started looking with her, there were one or two homes to look at per week, and many homes under $400,000 weren’t of very good quality.
But now there are five or six houses coming on the market every week. Starter home inventory is increasing and it’s less stressful for buyers looking for a lower price range.
“It’s wonderful for her because now she has a choice,” Rogers said.
The Boise market has been tough lately for those looking for a lower price range. It’s depressing, Rogers said, when a buyer works hard and gets approved for up to $350,000 because there’s nothing for them.
“It’s kind of heartbreaking because America still has this dream of buying a house here in this country. It’s still a wonderful gift,” Rogers said. “When you have to tell people the market is too expensive for them to buy the American dream, it’s hard.”
But now anyone browsing Boise homes on real estate websites can see price drop after price drop, some in the tens of thousands of dollars. As supply increases and demand for Boise homes cools, home prices fall. And no one is helped more by price drops than people looking at the lower end of the market.
In February, data from the Intermountain Multiple Listing Service showed 11 quality homes in Boise listed for less than $450,000, the Idaho Press reported at the time.
The lack of supply was prohibitive for anyone trying to enter the market at a lower price. Large swaths of the market have been locked down.
As of Wednesday, 193 single-family homes were listed in Boise on the Intermountain Multiple Listing Service for less than $450,000, said Mary Barnett, chief broker at Amherst Madison Real Estate Advisors.
Rogers, who works with sellers and buyers, sees the impact on both sides. A few months ago, Rogers did a comparative market analysis for a three-bedroom, two-bathroom listing in southeast Boise. She estimated that the house could be listed between $435,000 and $445,000.
“Even if you list it for 435, you’re assuming you’re going to get multiple offers, and that’s probably going to bump it up a bit,” Rogers said.
But recently, she redid the comparable market analysis using the last two months of data and realized that the house she was working with would be too expensive in that range. The home, at 1,216 square feet, hit the market at $409,900.
However, the outlook is not sunny for all buyers. Interest rates have gone up, pushing people out of the buying pool. For example, if someone was approved for up to $400,000 by a lender in the winter, their buying power may have dropped into the $300,000s, Barnett said.
For people who can find a home within their price ranges, there are now many more options and more bargaining power. Sellers pay the closing costs again or repurchase the interest rate, Barnett said. This contrasts with the past two years where sellers made no concessions.
But while some people have been removed from the buyer pool, this drop in market demand is also what is helping homes stay on the market longer. Many agents and landlords have gotten into the minds of Boise’s overheated market that if a home doesn’t sell immediately, it’s overpriced, Barnett said.
“You just have more competition, it will take longer to sell,” Barnett said. “I think everyone needs to take a deep breath.”
The past two years haven’t been fun for buyers, said Christina Ward, realtor at Christina & Company Keller Williams Realty Boise. Some clients wrote eight to 10 offers last year, she said, and it was hard to deal with the heartache of making offers and getting beaten up.
But now customers can walk into a home, review it, and think about the decision. Buyers can negotiate things like inspection repairs.
“It’s been really fun for us to be heroes to buyers and help them get their best home and feel like they’re getting a good deal,” Ward said.
But at the same time, the prices do not drop. Ada County appreciated at a 5.6% appreciation rate, which Ward says is still above average. However, Ward said last year that was a 34.6% appreciation.
Although still a buyer’s market, inventories have risen from record highs of the past two years.
“Whatever happened in the last two years, we just have to forget about it,” Ward said. “This will not happen again.”
Advice for first-time buyers:
Christina Ward, realtor at 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, she said.
- You can afford it.
“I want to see young people buying houses,” Ward said.
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