The year of 1,000 million-dollar houses? What Boise-area real estate agents say is coming

In 2023, home sales in Ada and Canyon counties fell to their lowest point since 2009 after rocketing interest rates put a pause on homebuying dreams. But as interest rates dip, Treasure Valley brokers and agents expect a possible torrent of homebuying in the new year.

There are already signs showing an increase in buyer activity, according to Cassie Zimmerman, marketing accounts manager for Boise real estate brokerage The Agency.

Ada County homes stayed on the market 13 days less on average in December than in December 2022, Zimmerman wrote in a news release. In Canyon County, homes sold in December an average of 12 days faster than the year before.

“Faster market times are an indication that buyer activity is on the rise,” Zimmerman wrote.

And with pent-up demand for housing and interest rates continuing to decrease from a high in October, a floodgate could open in 2024 as buyers try to secure lower loan rates, said Mike Pennington of John L. Scott Real Estate in Boise.

“There’s a lot of desire (to buy),” Pennington said.

Some buyers may be traumatized from the sharp correction and be slow to jump back into the market, Pennington said. But with an almost critical low point for existing homes and pent-up demand, home prices could increase if sales tick upwards amid a flurry of homebuying.

“If you’re serious about a home, the sooner you can get one the better off you’ll be,” Pennington said by phone.

Pennington and Krista Coleman, of Fathom Realty, predicted an increase in buyer interest soon, with the market usually taking off after the new year.

Brett Hughes, of Boise Premier Real Estate, predicted that the luxury market could also make some moves in the next year.

“I think that we will break 1,000 homes sold for over a million dollars for the first time ever in 2024,” Hughes said by email. “With interest rates coming down and supply being limited, prices should rise in 2024, probably by more than 5 percent.”

Even with high interest rates in 2022 and 2023, Hughes said luxury homes were still one of the strongest segments of the market as many of the buyers sold more expensive property in another state to relocate to Idaho. Despite migration rates falling in 2023, they’re still among the highest in the nation, he said.

Looking back on Idaho real estate in 2023

The past year was an interesting one for real estate.

The state, and Southwest Idaho in particular, saw a significant increase in migration and home-buying during the COVID-19 pandemic. Home prices blasted upwards, rising nearly 70% in Ada and Canyon counties in 2020 through 2022.

In an attempt to ease inflation, the Federal Reserve cranked up interest rates, sending the 30-year mortgages rate to 7.8% in October while 15-year mortgages sat at just over 7%, according to Freddie Mac.

The Fed’s plans worked — as interest rates went up, home-buying went down.

Between December 2022 and December 2023, Ada County saw 77 fewer sales while Canyon County saw 71 fewer, according to the Intermountain Multiple Listing Service, or IMLS.

“The past year was a needed correction in the market,” said Pennington. “The market was overheated in 2020 and 2021.”

Home prices also stabilized somewhat in 2023 after the highs of the pandemic. The median Ada County home sale price in December moved up less than half a percent compared with a year ago to nearly $517,000, according to the IMLS. Canyon County saw a roughly 5 percent increase to slightly under $410,000.

The IMLS publishes an overall view of sales including condos and mobile homes, Pennington said. He zeroed in on single-family houses alone and found somewhat bigger drops.

The average sale price for an existing house in Ada County sat at nearly $588,000 in 2023 — a decrease of almost $13,000, or 2 percent, compared with the 2022 average, according to Pennington’s numbers. For new houses, that number sat at almost $647,000, an over $87,000, or 12 percent, drop compared with 2022.

Canyon County saw a bigger drop in Pennington’s numbers, where the average existing house dropped almost $18,000, or 4 percent, to about $393,000 and new houses dropped nearly $70,000, or 13 percent, to roughly $452,000.

Compared with December 2022, Ada County’s new house inventory dropped 89 units, or 13 percent, to 597 units in December 2023 while Canyon County’s new house inventory dropped 63 units, or 16 percent, to 319 units

Pennington’s numbers also showed that for the combined counties, pending sales per month in 2022 dropped from 1,316 to 934 units, a whopping 29 percent decrease.

“We just got through a really challenging time,” Pennington said. “We’re getting back to what’s our new normal market.”

Idaho mirrors dropping national, regional home sales

Nationally, existing-home sales fell to the lowest level in nearly 30 years in 2023 while the median price reached a record high of just under $390,000, according to a news release from the National Association of Realtors.

Existing home sales fell in Ada and Canyon counties too, according to IMLS data. Both counties haven’t seen existing home sales fall as low as they did in 2023 since 2009, during the height of the Great Recession.

But prices remained much higher in the West, where the median price was $582,000, up nearly 5 percent from December 2022, according to the association. Sales fell nearly 1½ percent from the year before.

First-time buyers made up 29 percent of sales nationally in December, down from 31 percent in November 2023 and December 2022, while the annual share of first-time buyers stood at 32 percent, according to the release.

Meanwhile, investors or second-home buyers made up 16 percent of sales in December, which is down from 18 percent in November 2023 but the same as in December 2022.

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