Boise, Idaho Could Flip from Seller’s to Buyer’s Market in 2023

Published:
November 15, 2022
Last updated:
November 15, 2022
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Boise, Idaho was one of the hottest real estate markets during the second half of 2020, and all throughout 2021. But now, in late 2022, this housing market is cooling down at a rapid pace. In this article, we will explain some of the changes that are taking place, and how they might turn Boise into a buyer’s real estate market in 2023.

How Boise Became One of the Hottest Housing Markets

When the COVID pandemic took root in America, Boise became one of the so-called “pandemic boom towns” that received an influx of buyers from other areas.

The short version is that home buyers from across the country poured into the Boise real estate market, depleting inventory like never before. As a result, home prices within the Boise real estate market skyrocketed with record-breaking gains.

With strong demand from buyers and exceedingly low inventory levels, the Boise metro area became a strong seller’s market in late 2020. Those conditions continued all throughout 2021.

But during the second half of 2022, things began to change. Rising home prices and other factors began to cool the real estate market in Boise. Higher house values caused a reduction in demand among buyers, especially for those seeking a relatively low-priced property.

Rising mortgage rates further cooled the Boise housing market in 2022 (along with the rest of the nation). One year ago, the average rate for a 30-year fixed mortgage loan was hovering around 3%. This week, 30-year mortgage rates averaged around 7%.

As a result of these trends, home sales have declined in Boise and most other major cities across the country.

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Real Estate Inventory Getting Back to Normal

That brings us up to the present. As of late 2022, the Boise real estate market is experiencing significant inventory growth and a slowdown in home-buying activity.

In October, this metro area has about a 3.5-month supply of homes for sale. That’s a big improvement from a year ago, when the market had less than a one-month supply. Inventory growth is starting to balance the scales between buyers and sellers, and it could turn Boise into a buyer’s market in the near future.

With more homes coming onto the market, buyers don’t have to compete so fiercely with one another. They can slow down and carefully consider each individual property, before making an offer. There’s less urgency, compared to what we saw during 2021.

For more evidence of an ongoing shift toward a buyer’s market, we can look at the number of price cuts made by sellers. At the beginning of this year, the percentage of Boise-area real estate listings with a price reduction was around 15%. But by the fall, that percentage had increased to roughly 70%.

So clearly, sellers are starting to realize the shifting dynamic within the local real estate market. They are cutting their prices in order to attract more offers from buyers, and that’s something that could continue into next year as well.

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A Buyer’s Market Is Possible in 2023

A recent survey conducted by Zillow offered some insight into the current thinking of housing analysts and economists in the U.S. Among other things, it showed that most of them expect the housing market to favor buyers in 2023.

To quote the late-September Zillow report:

“…a [housing] market firmly in favor of buyers is expected next year, according to a majority of economists and housing experts polled in the latest Zillow Home Price Expectations Survey.”

A classic buyer’s market occurs when (A) the number of homes listed for sale greatly exceeds (B) the number of buyers in the market attempting to purchase. But we might see a different kind of buyer’s market in the Boise area during 2023, in terms of supply.

Real estate inventory remains low from a historical standpoint. Even so, this housing market (and many others across the country) continue to shift in a more buyer-friendly direction. Higher prices and mortgage rates have reduced demand, while more and more homes have come onto the market. It’s a pattern occurring nationwide, as we near the end of 2022.

Here’s the bottom line to all of these trends and data. Home buyers in the Boise area are once more enjoying some “bargaining power,” which is something they lacked for many months. Changes on both the supply and demand side of the equation could push Boise into a buyer’s real estate market scenario during the first part of 2023.

This is good news for those who are planning to buy a house over the coming months. Going forward, buyers should have a much easier time finding and purchasing a suitable property, compared to those who struggled during 2021 and early 2022.

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