Boise Real Estate Forecast 2022

Over the course of the pandemic, 194% more people moved in than out. Idaho’s natural beauty, simpler lifestyle, and affordable cost of living attracted many new residents. This trend led to an astonishing rise in home prices across the state, especially in the greater Boise metropolitan area. Although there were many assumptions about our market over the past 2 years, the unpredictability of the pandemic makes any forecast just an educated guess. Looking forward to 2022 with the markers below, our supply-and-demand issue will likely be the key driver in our market’s activity. Boise appears to still be on everyone’s radar continuing into the new year, and was listed in the Top 10 Markets for 2022 by realtor.com.

Home prices in the greater Boise metro area increased by double digits month after month in 2021, and gradually slowed to single digit price growth in the last quarter of the year. Overall the median sales price increased 27% in Ada County and 23.4% in Canyon County from December 2020 to December 2021. Looking forward to 2022, ample price appreciation is expected to continue, but at a less frenzied pace. Will it be at a rate of 7%, 10%, 30%? Analysts don’t quite agree on the number, but they expect price appreciation to be in the double digits. Only time will tell if their assessments are true, but one thing they all can agree on is that the market will remain strong so long as there aren’t any catastrophic events.

Rising Inventory, but Not Enough:

Steady population growth on top of an already existing low supply will continue to fuel the competitive market. We expect to see more homeowners put their homes on the market, lured by promising home equity gains and lifestyle priority shifts, to boost supply. New home starts have slowly gained speed, but supply chain issues, labor shortages, and higher land costs are burdening the new construction industry. The severe delay of building, dating all the way back to the Great Recession in 2008, is the primary contributor to the tight market supply… leading to a shortage of millions of homes. Due to the greater lack of inventory, we will likely continue into a strong seller’s market for the majority of 2022.

Homeowners may see a window of opportunity to move up while interest rates remain low and the market becomes more balanced or cash out and use funds for other life goals. Although bidding wars have become the norm heading into 2022, we may see more home-sale contingencies in place making it a little easier to simultaneously list and buy a home. As the inevitable stop of double-digit price growth inches closer and closer, sellers may recognize that this year may be their big break in making a change in their living situation and cash out on their home’s significant equity gain.

More than 5 million Millennials will reach peak buying age this year, leading the charge for home purchases (especially in the starter home market). With rapidly increasing rental rates, steady monthly mortgage payments will become more appealing as this segment begins to establish their careers and families. Mortgage rates will remain historically low, but are expected to increase from 3.1% to 3.6% by the end of the year, encouraging more mortgage applications throughout the year.

The Boise Metro Will Remain a Desirable Option:

Idaho is an outdoor recreationists’ heaven, with an overabundance of wilderness to explore and mild weather. Boise has been a prime area for those looking to relocate since before the pandemic, but the onset of lockdowns and rise of remote work have people reconsidering their living arrangements and making the move. In the pandemic age, people want to surround themselves and their families with natural beauty and have a slower pace of life. Boise appears to fit the bill, with miles of hiking trails located within 15-minutes or less (and for some right beyond the back door), our beautiful Greenbelt and Boise River, and generous tree cover. The promise of a better quality of life will continue to attract new residents and current residents from different parts of the State.

Conclusion:

It’s clear to see that over the past 2 years, Boise and the surrounding area has been a hot spot of activity in real estate. Even as our market heads back to a more balanced state, the changes are expected to be minimal. The demand for our area is still remarkably strong, and pending any significant events, will remain as such for the foreseeable future. Our housing supply simply isn’t matched to meet the amount of people needing homes. Sellers in our area will continue to hold the reins of our fast-moving market, but buyers will find relief as that pace goes from a sprint to a jog. If you’ve been on the fence about making a move, we’re here to answer any questions you may have. Together, we can assess your current situation, outline your goals, and formulate a plan to help you on your way. As an industry leader, Lysi Bishop Real Estate provides an extraordinary client experience supported by two decades of experience in Boise’s real estate market. We see luxury as an experience, not a price point. Call us at (208) 870-8292 or visit us at www.lysibishop.com to get started. 

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