Once ‘pushed out of the market,’ first-time homebuyers make a comeback in the Boise area
First-time homebuyers are back in the game.
For years, skyrocketing prices pushed home ownership past affordability for many in the Treasure Valley. But residents now looking to enter the housing market are having better luck at eventually sealing a deal.
“We’ve seen a lot of more first-time homebuyers purchase again,” said Jared Cook, who manages of team of loan officers throughout the state. “First-time homebuyers really were pushed out of the market in the last couple of years, and now they have the ability to go in and negotiate and actually get something under contract.”
As home prices in the Boise area surged over the last few years, peaking in 2021, those looking to buy a single-family residence faced a myriad of obstacles.
Locals whose only path to home ownership was through a mortgage desperately wrote so-called love letters to sellers, only to be beat out by buyers with cash. Homes on the market received a slew of offers – usually far over the asking price. And many buyers waived inspections and other contingencies to boost their favor.
“Now, it’s a lot more difficult to qualify, but at least they have a chance in the market,” Cook said in a phone interview with the Idaho Statesman. “Before, they were competing against multiple offers, including cash offers, and it was very difficult for many of those first-time homebuyers to get an offer accepted.”
The Treasure Valley housing market has seen a marked decline in the price of single-family homes over the past several months. But even though prices are dropping, they’re still quite high.
The median price of a single-family home in Ada County fell by $31,000 to $515,000 in December, according to the latest report from the Intermountain Multiple Listing Service. In December 2020, the median home price was significantly lower at $434,628. The further back you go, the more prices drop.
The median price of a single-family home in Canyon County fell by $29,480 to $390,000.
In December, the Statesman reported that sellers had begun offering incentives like closing cost credits to buy down the interest rate and lower monthly mortgage payments for buyers.
Robert Spendlove, an economist at Zions Bank who analyzes trends in the housing market, said high mortgage rates have dramatically curbed demand in the real estate sector. While the country has experienced periods of high interest rates before, he said, the home prices were then cheaper.
“You can only buy a house that you can make the payments on, and payments are based on the price of the house and the interest rate. So if that interest rate is going up, then the price of the house has to go down, or your income has to go up,” Spendlove said. “If you look specifically at the Boise market, home price appreciation is coming down.”
More details from the latest monthly listing-service report:
The median price of newly constructed Ada County homes in December was $549,945, a 5.4% decrease from the previous year. In Canyon County, the median price of newly constructed homes in December was $442,000, a 2.6% decrease.
The median price of existing Ada County homes in December was $490,000, a 3.9% decrease from the previous year. In Canyon County, the median price of existing homes in December was $342,000, a 10.9% decrease.
Highest median prices in Ada County: Northeast Boise, $827,500; Eagle, $815,000; North Boise, $794,000. Highest median prices in Canyon County: Melba, $750,000; Middleton, $640,000; South of Lake Lowell, $480,000.
Lowest median prices in Ada County: Garden City, $360,000; South Boise, $409,900; Boise Bench, $415,000. Lowest median prices in Canyon County: Parma, $180,000; Southwest Caldwell, $344,500; Northwest Caldwell, $385,000.
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