Today, we dive into the February 2023 market update for Boise, Idaho. According to the Intermountain MLS, the median sales price for homes was $492,115, down 10.5% year over year. This decline in price may seem alarming to some, but it could be attributed to the increase in the supply of homes for sale. The number of homes sold was 613, down 7.3% year over year. Average days on the market were 78, a 143.8% increase year over year. Lastly, the number of homes for sale was 1,039, up 110.8% year over year.
It's important to note that January is usually the slowest month for recorded sales, and the month's data reflect homes going under contract between the week before Thanksgiving and New Year's Day. However, we did see a return in buyer demand at the beginning of the year that continued into February. Unfortunately, this trend has tapered off in the last few weeks due to an increase in mortgage rates. Despite the recent slowdown in demand, continued economic growth has boosted buyer confidence, leading to inflation and the Federal Reserve keeping its foot firmly on the monetary brakes. This has resulted in rising interest rates and a notable decline in new mortgage applications in the last few weeks.
While the current decrease in mortgage applications may not have a substantial impact in March, we could see a reduction in sales by April or May if this trend continues. As of the week ending March 9th, the average 30-year fixed-rate mortgage climbed to 6.73%, a notable increase from 6.12% just a month ago. Traditionally, March marks the beginning of the spring selling season in the Treasure Valley, with nearly 40% of the annual purchase volume occurring between then and June. However, with buyer demand surging in January, demand may have been pulled forward by a few months.
Supply of homes for sale reached its lowest point in February, but there are early indications that the trend of high demand from homebuyers is slowing down, just as we head into a period of increased new listings. This slowdown in demand may be due to the recent increase in interest rates and the psychological impact that has on buyers. It's important to note that the Federal Reserve recently suggested that they plan to raise interest rates higher than expected and keep them there longer. While the real estate market is experiencing elevated buyer demand, there is no guarantee that it will continue into the summer.
If you're considering selling your home this year, the spring selling season is already in full swing, and it's essential to price it right and capitalize on the current high demand while it lasts. It's a case of striking while the iron is hot. As a real estate agent in Boise, Idaho, I'm here to help you navigate the current market trends and ensure that you get the best possible price for your home.