Boise Area Real Estate News & Market Trends

Boise Idaho real estate market trends, important information, covering everything from local market data and home values to community events and featured Boise areas. We care about the Boise community and want to help you find your place in it. We'd love to talk to you about your real estate needs!

Jan. 14, 2021

Boise & Ada County 2020 Real Estate Market

Boise & Ada County 2020 Real Estate Market 

We cannot have a 2020 review without first addressing the impact that COVID-19 had on the real estate market locally. 

The year started strong with January 2020 sales 21.5% higher than in January 2019 but began to taper off in February and March as the uncertainties of the pandemic made their way to our local market. In April and May, when our spring market typically begins to ramp up, sales activity dropped by 19.5% and 29.7%, respectively, because of the government-mandated shutdowns and restrictions.  

Sales began to pick up in June, then jumped 22.0% year-over-year in July and remained elevated through November, compressing nearly a year’s worth of activity into just six months. 

Despite the many challenges to buying and selling homes during the pandemic, home sales were able to continue due to a greater adoption of virtual technology for showings which limited in-person activities, as well as additional steps taken by REALTORS® to protect clients and properties when meeting in person couldn’t be avoided.

In total, 11,728 homes sold in Ada County in 2020 — 5.2% more than in the previous year. The only other time we saw more sales in one year was in 2005 which had 11,974 sales. This represents existing and new construction combined. 

Boise area home sales 2020

Low Mortgage Rates Increase Purchase Power 

Historically low interest rates allowed home sales to quickly recover and then outpace 2019 levels. According to Freddie Mac, the 30-year fixed rate mortgage in the U.S. was at 3.11% on average in 2020 — the lowest ever based on data going back to 1971. These low rates increased purchasing power for buyers, allowing them buy despite rising prices, and in some cases, compete in multiple offer situations. 

Historical mortgage rates

 

Home Prices Driven by Supply vs. Demand 

A major factor that pushed home prices up was insufficient supply compared to demand, especially for existing inventory. For most of the year, the average Days on Market metric (DOM) for existing homes was at 20 days in 2020, on average, compared to 42 days in 2019. Then in October, DOM dropped to just 13 days — a record low based on data going back to 2004. This meant buyers had to act quickly and write a competitive offer when they found a home. 

DOM vs MSP Ada 2020

On the last day of December 2020, there were just 333 homes available for sale, for both existing and new construction combined — 79.6% lower than December 2019 and a record low based on data going back to 2004. More inventory is needed to bring balance back into the market at all price points and product types. 

This begs the question, “How can home sales be up while inventory continues to drop?”  

Unlike the closed sales metric which reflects all homes sold during the month, the inventory metric fluctuates daily and is based on the number of homes listed as “active” in the multiple listing service on a given day. For our monthly reports, it’s the last day of the month. This “snapshot” of inventory compared to a monthly total of sales is one reason we can see more closings than available inventory.  

Additionally, once a seller accepts an offer, the home is no longer considered available inventory. With the average Days on Market at less than a month, many properties that were available during the month are not reflected in the reported inventory “snapshot” at the end of the month. 

 

Boise area home prices 2006-2020 

 

Factors Restricting Inventory 

The historically low mortgage rates mentioned earlier also caused a surge in refinancing at the beginning of the year (SOURCE) which likely kept some of the existing homes that may have otherwise been listed for sale off the market. Then after COVID hit, it further reduced the number of homeowners willing to sell due to safety concerns or general uncertainty. While we cannot quantify how many homeowners held back from listing, it was something we heard often from REALTORS® throughout the year. 

In addition to the impacts of refinancing and safety concerns, there were a variety of other reasons existing/resale inventory has been so limited. Many homeowners have delayed listing until they find their next home, which takes longer due to already limited and fast-moving inventory; some homeowners may not have felt they could “trade up” from their current home due to current prices, despite equity and low mortgage rates; or people may have been unable to manage a sale while working from home or if they had children at home for school. 

Interestingly, the push to stay home for work and school as a result of COVID had people across the country re-evaluating where they wanted to live. Wills added, “It’s no secret that Idaho has been one of the top states experiencing growth over the past few years, and the ability for many to work from anywhere brought more interest than ever, equating to even more demand for homes in our market.” 

The Role of New Construction 

The lack of existing/resale inventory put tremendous demand on builders, and they have been responding. According to Construction Monitor, 3,336 permits were approved for new single-family homes throughout Ada County during 2020. When we compare this permit count to the 4,010 new homes that sold in 2020, it suggests that we are not overbuilding as demand is absorbing all supply that becomes available, reinforcing the need for continued building.  

New home sales made up 34.2% of all sales in 2020, up slightly from 2019. New construction typically costs more than an existing home, due to higher increasing land, labor, and materials, so as the share of new home sales increases, it pushed up the overall median sales price. The median sales price for new construction in Ada County in 2020 was $424,995 compared to $375,000 for existing homes. Taking the two segments together, the median sales price for the market overall was $392,230 in 2020. 

Looking Forward 

Looking forward to 2021, the Boise Metro area continues to be among many economists’ top picks for markets that should see continued growth. The National Association of REALTORS® even included Boise in their list of markets that are “expected to perform well in a post-COVID-19 environment.” (SOURCE)  

To help balance the market out, again, we need more inventory among new and existing product. We hope to see more homeowners list in the coming months and take advantage of the ongoing demand. One additional opportunity for more existing inventory, though, comes from investors holding single-family properties. Investors should talk to a REALTOR® and tax professional to understand their options for selling their rental homes and potentially rolling proceeds into other sectors such as commercial or multi-family to diversify their portfolios. 

A fast, competitive market like ours presents challenges and opportunities to buyers and sellers alike. Whether you’re looking to buy or sell, it’s never been more important to work with a REALTOR®. They will help identify potential options for purchase, connect you with a mortgage lender, help craft a competitive offer, and negotiate on your behalf, allowing you to make decisions confidently and quickly to achieve your real estate goals.

Credit: Boise Regional Realtors

 

Posted in Market Updates
Dec. 15, 2020

Home Buying in Today's Market

Home Buying in Today's Market

Buying a home in today's real estate market, in Boise and Treasure Valley doesn't have to be difficult. The fact is that Boise Idaho market is what we call "Seller's market".  Due to the low inventory of available homes, more buyers than sellers, home sellers often are in the position to dictate prices and terms.  Buyers often find themselves in the multiple competing offers situation. How to positions yourself as a buyer in this market?  Below are steps you may take to make your offer stand out:

 

Contact me anytime at (208)918-5007 for a Free consultation and the steps we can take together to find the right home and make your offer stand out among other competing bids.

Posted in Home Buying
Dec. 1, 2020

Why Is My House Not Selling?

Why Is My House Not Selling?

When you decide to put your home on the market, you’re likely armed with a certain sense of caution. You don’t expect it to sell overnight, but you also don’t expect the process to drag on for months. This is especially true in our hot 2020 market. Here, we'll analyze top 10 reasons your house is not selling and what adjustments you could make to fix the problem.

10 Reasons Your Home Won't Sell

1. You Priced it Too High

Start with another look into the pricing.

Determining the value of a home depends on many factors. The process of determining the value of the property may be complex. You may contact a real estate agent for your home evaluation. It may be advisable to contact several agents to see how different experts value your home and which factors they take into consideration. You can then go for the median of these prices or tweak your price according to their advice.

You might also be hearing feedback on the price from people who come to view your home. If a lot of them seemed interested but outright told you they can’t afford your price, you might want to revise it in order to make a sale.

Of course, the aim is not to reduce the price below actual market value, but rather to give up your own private notion of what your home is worth and be more objective.

2. Your Property Marketing Is Not Adequate

Giver your home the widest possible exposure. The more potential buyers see your home in person or online, the more offers you can expect. That’s why marketing your home should be crucial if you are looking for a quicker sale and best possible selling price.

A reputable listing broker will ensure that your home is marketed and advertised worldwide.

You can also spread the word offline. Talk to friends and acquaintances, and ask them to spread the word too. You never know whose interested ear your offer might reach.

3. You Are Marketing to the Wrong Audience

Along the same lines – you might be marketing your home to the wrong kind of people. Perhaps it would be more suited to an elderly couple than a family with four kids? Who is looking at your ads, and who are the people who are actually coming to see it?

Consider the space and who it would suit most – families with kids, couples, seniors? Come up with a story for your target audience, and market your home by emphasizing the appeal it has for a specific group of people.

Not everyone who goes out to view a home can imagine all the possibilities. It’s up to you to show them what your home can be and how it can fit into their stage of life and their future plans.

4. Your Home Is Hard to Find

Put up a sign (it doesn’t have to be a For sale sign) to make your home stand out. For example, place a bunch of blue balloons on your porch, making it easier to spot your house from the street. That way, potential buyers will have an easier time finding you.

Most buyers look at dozens of homes, often more than one on the same day. If they have to keep checking for the address and trying to spot your house number from their car, your property won’t be as memorable.

The less hassle someone needs to go through to get to you, the more open they will be to viewing and hearing your price.

5. Your Listing Photos Are Low Quality

Even if your home looks amazing in real life, hardly anyone will want to come after seeing very bad images of it.

First of all, the quality of the photos needs to be exceptional. You can shoot them with most smartphones today, but you can also hire a professional for the job. That’s especially advised if you’re demanding a higher price and your home can potentially attract a lot of interest.

Next, make sure you get multiple angles of everything. Take the photos in some sort of order – as you would naturally move through the house. Focus on capturing all the major areas from two or three angles, and show how the rooms are connected to each other as well.

Don’t forget the front, the back, the driveway, the street, the yard – anything that contributes to the value of the home and can show an interested party what they can expect.

Shoot images of the finer details as well – doors, windows, stairs, the kitchen, the tiles. But don’t try to mess with the perspective and make the rooms appear bigger or the ceilings higher than they are. When viewers come to see your home, they will only end up leaving disappointed.

6. You Have Not Staged the House 

So, you don’t want to show the rooms in the state they are when you are occupying them, neither in the images nor in person. You might still be living there, but in order to sell your home, you need to help others imagine their life there, not show them what your life looks like.

Remove as much of your personal effects as possible – family photos, trinkets, and memorabilia. Keep them stored somewhere when people are coming for a viewing.

Set up all the rooms to showcase them in the best light. This might mean moving some furniture around, but you can get used to the new layout if it’s for an important cause.

Take a look at the layout you have now, and consider how best to use the space. Set up the bedroom so that a viewer will immediately associate the space with sweet, restful sleep. Maybe you want to move the bed so that the window and door are to its sides? Maybe you want to move the sofa so that it faces a window? Could the dining table make better use of your kitchen space?

If you are adding any décor to the space, keep it neutral. Flowers and plants are a great choice, as are neutral paintings or prints. Emphasize the coziness and warmth factor.

7. Your Home Is a Mess

 Why Your Home Hasn't Sold and How to Fix It

You certainly can’t be expected to keep the home spick and span 24/7, but you should also make an effort to clean and tidy the place before a viewing. You might want to achieve a lived-in effect, but that does not mean it’s okay to leave your dirty dishes in the sink or let the trash sit.

Look at every viewing as your chance to make a sale. It’s not that buyers won’t like the home because it’s messy – it’s that they will simply leave with a less than amazing experience and memory. They might end up wowed more by a home that was just as good as yours, only tidier.

Also make sure you do all the necessary repairs before you put the home on the market. A fresh lick of paint can go a long way. So can taking care of any stains, burn marks, chipped tiles, and other marks that testify to your use of the home. The more repairs and renovations you can shoulder before the sale, the higher your chances of making a sale faster. Plus, it will allow you to demand a higher price.

8. Your Curb Appeal Needs Work

You can never have a second stab at a first impression, so you want to make sure potential buyers will have a positive experience when they come to see your home for the first time.

Sure, your garden and driveway may be in good condition. However, if you let the gutter get clogged, if you have a whole lot of unraked leaves in the yard, if the lawn is going a bit wild, or if there are more weeds than plants in the garden – people will start to wonder how the rest of the home is treated.

Do a complete spruce-up of the front (and back) yard. Fresh plants, a freshly mowed lawn, or a new doormat can go a very long way in attracting your buyers.

9. You Are Rude and Unwelcoming

Showing a home can be stressful. There are a bunch of strangers passing through your home, touching things, discussing your decorating taste, and asking all kinds of questions. 

However, the more pleasant and natural you are, the better your home will fare on the market. People will want to work with a homeowner who is kind, relaxed, and who can answer their questions and show them what a home can be.

It may be best if you leave the house at the time of showings and let real estate agents do their job of guiding their clients thru the property.

10. You Are Too Pushy and Too Welcoming

On the other hand, you can become simply smothering if you talk too much and keep pointing out different features. 

You want them to have some time alone with the space but try to stay on hand to answer questions. Let the home speak for itself, and allow the good work you’ve done in staging and preparing it to do the talking.

Some people will specifically be put off by those who are too sweet and kind to strangers, so don’t be that person. Keep a professional distance. After all, these are people you’ve never seen before – how bubbly can you get with them? If you get too cozy they may end up asking you the reasons why your home is not selling, which is better to avoid.

Don’t try to hide any repairs or potential future issues, either. A lot of buyers will be fine with tackling an issue that may arise in a couple of years, such as roof repairs, if they know to expect it.

Think of all the negatives you have on your hands and the best way you can be open about them. Sometimes, there is no silver lining. If your road is very busy and loud, for example, there’s no way you can sugarcoat that. It's advisable to be honest.

Main Reasons Why Your Home Is Not Selling

Posted in Home Selling
Nov. 12, 2020

Energy Star certified homes are a smart investment

Certified eco homes are a smart investment.

 

Eco upgrades such as high efficiency heating and cooling systems deliver savings in both the amount of energy you use and greenhouse gas emissions. Plus, studies show that homes with ‘green’ certifications sell at a higher value, and faster2 than noncertified homes. You’ll also enjoy lower ongoing costs for electricity, gas and water. That’s why making green choices is an investment that yields both immediate and long-term value.


How to get ENERGY STAR certified

To havyour home ENERGY STAR certified, it must be tested and inspected by a Certified Home Energy Rater – such as a Rater from Building Energy – who has been accredited by the Residential Energy Services Network (RESNET). Before construction begins, the rater works with the builder to ensure the home design meets the program requirements and then performs rigorous testing and inspections during and after construction to verify they’ve been met.

 

A win-win situation

The environmental and economic payoffs make energy efficient homes a win-win situation. By investing in the earth’s future, you are investing in your future too. And best of all, you’ll get to build the home you’ve dreamed of while doing so.

 

Sept. 15, 2020

Boise Real Estate Market Update - Aug 2020

Boise Real Estate Market Update - Aug 2020

The median sales price for all homes sold in Ada County in August reached $400,000, the 12.7% year-over-year increase, surpassing the previous high of $390,000 a year ago.

Boise home prices continue to be driven by a shrinking supply of existing homes available for sale compared to demand, more new homes selling at ever higher prices, increased purchase power due to low mortgage rates, and now, buyer activity being compressed into a shorter time period as a result of COVID-19.

First, the number of existing homes for sale has trended down for years now, and there were only 239 existing homes available for purchase at the end of August. This is a dramatic decrease of 72.1% compared to the same month last year, and a record low since BRR began tracking the metric in May 2006.

To further illustrate this imbalance, the months supply of inventory for existing homes in Ada County was also at a record low of 0.3 months as of August. For reference, a balanced market would be between 4.0-6.0 months. This lack of inventory is putting tremendous pressure on existing home prices, which reached a median sales price of $385,500 in August.

Another factor impacting prices is the mix of sales. With fewer choices among existing inventory, many homebuyers are purchasing new construction, increasing the demand in that segment. In August, new homes made up 32.9% of all closed sales, at a median sales price of $444,900. In addition to greater buyer demand, new construction prices are being driven by rising lumber prices. According to the National Association of Home Builders, “The price of lumber has staged a staggering increase in recent months, rising roughly 80% since mid-April… [which is adding] thousands of dollars to the cost of a typical newly-built home.”

Third, the historically low mortgage interest rates are allowing buyers to purchase at higher prices points. For comparison purposes, the rate in August 2006 (the market’s previous peak) was at 6.5% versus 2.9% in August 2020. This has kept monthly payments at roughly the same as what they were during the previous peak in 2006, despite the increase in home prices.

Finally, after a brief COVID-related slowdown earlier this spring, home sales rebounded in August with 1,251 homes closing during the month, up 18.9% compared to August 2019. Interestingly, closed sales year-to-date versus the same period last year were nearly even, with 7,737 and 7,547 sales, respectively.

Off-market new inventory is allowing us to have consistent sales numbers despite low inventory. With so many buyers looking at Boise new construction, builders can sell homes that are not yet built, and therefore, not yet reflected in the IMLS as inventory.

In August, nearly 25% of newly built homes sold were not previously listed on the MLS showed up as a closed sale. This should give hope to homebuyers that while inventory is low, there are options available. Identifying new construction opportunities, in addition to options in the existing market, is just one more way a REALTOR® can bring value to your home search.

Source: Boise Regional Realtors

Aug. 18, 2020

Inventory of Homes For Sale Is Improving

Inventory of Homes For Sale Is Improving

Selling a home

We are still in the seller's market.  We still have more buyers willing to buy a home than sellers willing to sell. The inventory of homes is however slowly improving. This would be a good, positive sign for home buyers who are getting tired of bidding wars.

Javier Vivas, Director of Economic Research at realtor.com, explains:

“Seller confidence has been improving gradually after reaching its bottom in mid-April, and now it appears to have reached an important recovery milestone…After five long months, sellers are back in the housing market; while encouraging, the improvement to new listings is only the first step in the long road to solving low inventory issues keeping many buyers at bay.”

Even with the number of homes coming into the market, the available inventory is well below where it needs to be to satisfy buyer interest. The National Association of Realtors (NAR) reports:

“Total housing inventory at the end of June totaled 1.57 million units, up 1.3% from May, but still down 18.2% from one year ago (1.92 million). Unsold inventory sits at a 4.0-month supply at the current sales pace, down from both 4.8 months in May and from the 4.3-month figure recorded in June 2019.”

Houses today are selling faster than they’re coming to market. That’s why we only have inventory for 4 months at the current sales pace when in reality we need inventory for 6 months to keep up. But, as mentioned above, sellers are starting to return to the game. Realtor.com explains:

“The ‘housing supply’ component – which tracks growth of new listings – reached 101.7, up 4.9 points over the prior week, finally reaching the January growth baseline. The big milestone in new listings growth comes as seller sentiment continues to build momentum…After constant gradual improvements since mid-April, seller confidence appears to be reaching an important milestone. The temporary boost in new listings comes as the summer season replaces the typical spring homebuying season. More homes are entering the market than typical for this time of the year.”

Why is this good for sellers?

A good time to enter the housing market is when the competition in your area is low, meaning there are fewer sellers than interested buyers. You don’t want to wait for all of the other homeowners to list their houses before you do, providing more options for buyers to choose from. With sellers starting to get back into the market after five months of waiting, if you want to sell your house for the best possible price, now is a great time to do so.

Why is this good for buyers?

It can be challenging to find a home in today’s low-inventory environment. If more sellers are starting to put their houses up for sale, there will be more homes for you to choose from, providing a better opportunity to find the home of your dreams while taking advantage of the affordability that comes with historically low mortgage rates.

Contact us for your local Boise real estate market update and Free home evaluation. 

Today may be the time to sell your Boise home!

 

 

April 15, 2020

Are We Facing a New Housing Crisis?

Are We Facing a New Housing Crisis?

We'll compare current 2020 housing market with the housing market in 2008.  As you'll see, we are in a very different situation right now. Current real estate market is in a much stronger position today than it was in 2008. It is no longer the center of the economic slowdown. In fact, housing could be just what helps pull us out of the downturn.

Home price appreciation is projected to slow down to 1.9% price increase on average. Boise real estate home price appreciation will slow down to 7.6 percent. Boise market will continue to be one of the strongest real estate markets. Click below for full report:

Veros Report

We'll look at different important factors that characterize the real estate markets 2020 vs. 2008:

1. Home Price Appreciation

When we look at appreciation in the visual below, there’s a big difference between the 6 years prior to the housing crash and the most recent 6-year period of time. Leading up to the market crash, we had much higher appreciation in this country than we see right now. The highest level of appreciation most recently is below the lowest level we saw leading up to the crash. Prices have been rising lately, but not at the rate they were climbing back when we had runaway appreciation.

home price appreciation

 

2. Mortgage Credit Availability 

The Mortgage Credit Availability Index is a monthly measure by the Mortgage Bankers Association that gauges the level of difficulty to secure a loan. The higher the index, the easier it is to get a loan; the lower the index, the harder. Today we’re nowhere near the levels seen before the housing crash when it was very easy to get approved for a mortgage. After the crash, however, lending standards tightened and have remained that way leading up to today.

 

mortgage credit availability

 

3. Inventory of Homes For Sale

One of the causes of the housing crash in 2008 was an oversupply of homes for sale. Today, as shown in the next image, we see a much different picture. We don’t have enough homes on the market for the number of people who want to buy them. Across the country, we have less than 6 months of inventory, an undersupply of homes available for interested buyers.

 

historic real estate inventory

 

4. Use of Home Equity

The chart below shows the difference in how people are accessing the equity in their homes today as compared to 2008. In 2008, consumers were harvesting equity from their homes (through cash-out refinances) and using it to finance their lifestyles. Today, consumers are treating the equity in their homes much more cautiously.

 

home equity

 

5. Homeowner Equity

Today, 53.8% of homes across the country have at least 50% equity. In 2008, homeowners walked away when they owed more than what their homes were worth. With the equity homeowners have now, they’re much less likely to walk away from their homes.

 

real estate equity

The current pandemic is causing different challenges than the ones we faced in 2008. In 2008, we had a housing crisis; today, we face a health crisis. 

April 8, 2020

Using Technology To Facilitate Home Sales

Using technology can help real estate buyers and sellers thru the real estate transaction process, starting with locating the right property, using virtual tours or live video chats to view it, and completing whole transaction process online. This technology has been available for quite a while, but it's being utilized more widely now.

We have all the tools and advanced technology at our disposal to help you buy or sell Boise real estate, while practicing social distancing. 

Contact us today for a free consultation. 

 

 

Here is how you can buy or sell a home using modern technology, while adhering to safety precautions:

1. Virtual Consultations – Instead of heading into an office, you can meet with real estate and lending professionals through video chat. Whether it’s your first initial needs analysis as a buyer or your listing appointment as a seller, you can still get the process started remotely and create a plan together. Your trusted advisor is still on your side.

2. Home Searches & Virtual Showings – According to theNational Association of Realtors (NAR), the Internet is one of the three most popular information sources buyers use when searching for homes. Your real estate agent can send you listing information and help you request a virtual showing when you’re ready to start looking. This means you can virtually walk through the homes on your wish list while keeping your family safe. As a seller, you can still have virtual open houses and virtual tours too, so as not to miss those buyers looking to find a home right now.

3. Document Signing – Although this is another area that varies by state, today more portions of the transaction are being done digitally. In many areas, your agent or loan officer can set up an account where you can upload all of the required documents and sign electronically right from your computer.

4. Sending Money – Whether you need to pay for an appraisal or submit closing costs, there are options available. Depending on the transaction and local regulations, you may be able to pay by credit card, and most banks will also allow you to wire funds from your account. Sometimes you can send a check by mail, and in some states, a mobile escrow agent will pick up a check from your home.

5. Closing Process – Again, depending on your area, a mobile notary may be able to bring the required documents to your home before the closing. If your state requires an attorney to be present, check with your legal counsel to see what options are available. Also, depending on the title company, some are allowing drive-thru closings, which is similar to doing a transaction at a bank window.

Although these virtual processes are starting to become more widely accepted, it does not mean that this is the way things are going to get done from now on. Under the current circumstances, however, technology is making it possible to continue much of the real estate transaction today.

If you need to move today, technology can help make it happen; there are options available. To learn about the specific regulations in your area, contact us to discuss your situation, so you don’t have to put your real estate plans on hold.

Call Krystyna Ryan at (208)918-5007 today! I can help you!

April 3, 2020

Guide to Idaho Property Taxes

Guide to Idaho Property Taxes

Idaho property taxes can be confusing. As an example, you may see similar houses in the same area with different property taxes. Below is information that may be helpful when buying a home in Idaho.

Idaho Property Taxing Districts 

Property taxes are important – cities and counties depend on them to fund valuable public services (like schools) and infrastructure development (like new streets and sidewalks). Each of these is a unique “taxing district.” Taxing districts are based on where you live, which is why exact tax rate changes between counties and even cities.

Idaho has more than 1,245 unique taxing districts alone, which gives you an idea of how complicated your property tax bill can be. The more residents in a city or county, the more of a demand there is to pay for public services. That’s why tax rates are generally higher in more populated counties than in rural ones. In fact, the statewide average urban tax rate is 1.327%, while the rural rate is 0.893%.

The City of Boise – Idaho’s largest city, located in Ada County – has a helpful breakdown that shows how each property tax dollar that comes to the city is spent.

How Are Idaho Property Tax Rates Calculated?

All properties are evaluated annually by a county Property Tax Assessor and an unique tax rate is set. The assessors do not use the straight market value of your home (or what a buyer might pay for it) for taxing purposes, they use the "assessed value" of your property.

The market value of your home is the price it would likely sell for. The assessed value of your home is based on the average prices of homes similar to yours that have recently sold. The assessed value will typically be lower than the market value in an upward trending market and higher in a downward trending one.

Simply put, you can calculate your property taxes by taking the assessed value of the property, minus any exemptions and multiplying that by the levy rate.

Assessed Value – Exemptions x Levy Rate = Property Tax Amount.

As an example, and your neighbor both own three-bedroom homes that sit on a quarter-acre of property. The houses were built in the ‘70s, however, your home has a canal running along the back edge of the property. It also has a new roof, siding and windows, and the addition of a front and back porch.

Because of the canal, a mosquito abatement taxing district is applied to your property (in addition to the county tax levy) but not your neighbor’s. Your levy rate is 0.00257, while your neighbor’s rate is slightly lower at 0.00255. And because of the upgrades and additions to your home, your home’s assessed value is higher, too (let’s say at $300,000 after exemptions versus your neighbor’s at $230,000). Now let’s apply our formula to find out how much you’ll each be taxed:

Your home: $300,000 x 0.00257 = $771

Your neighbor’s home: $230,000 x 0.00255 = $587

As you can see, you will be paying significantly more in property taxes on a home that is very similar in size, age and style as your neighbor’s.

The tax rate you pay can also fluctuate from year to year. In Idaho, taxing districts can increase taxes up to 3% annually (plus growth). Each year, the Idaho State Tax Commission double checks each county to try and ensure that properties are being assessed correctly.

How Idaho Property Taxes Compare to Other States

When you look at property taxes in Idaho versus other states, Idaho's per-capita property taxes rank 42nd in the nation. Idaho's taxes are second lowest in the West (NV is the lowest).

What Is the Homeowner’s Exemption and How Do I Apply?

Homebuyers in Idaho may apply for a homeowner's property tax exemption. The state of Idaho offers a generous homeowner’s exemption for property taxes, which can only be applied to your primary residence. The exemption is equal to 50 percent of the net taxable value of your property, plus up to one acre of land, and is capped at $100,000.

While the homeowner’s exemption is the most widely-used property tax exemption, there are others. Some homeowners in Idaho – select veterans and disabled individuals on fixed incomes, for example – are eligible for Idaho’s Property Tax Reduction program (also commonly referred to as a circuit breaker). This program can reduce taxes by as much as $1,320.

The Idaho State Tax Commission administers the program but individuals must apply through their county assessor’s office. 

Property Tax Calculator

The Idaho State Tax Commission created an online property tax calculator to help homeowners estimate their current year’s property tax amount. The easy-to-use tool allows you to select your county, plug in your home value, then select your tax code area to find your estimated property tax.

However, the calculator has a few limitations. It can only calculate property taxes in 24 of Idaho’s 44 counties (the good news is, Ada County is one of those counties). It’s also only available late May/early June of each year through September, when counties begin assembling and sending out their tax bills.

How to Appeal Your Assessed Property Value

Let’s say you disagree with the assessed market value of your property. If this is the case, you’re within your rights to appeal it.

On the assessment notice you received in the mail, you’ll find your appraiser's contact information and the deadline to appeal. The assessor’s office encourages you to attempt to settle disputes by calling their office or your appraiser.

If you still aren’t satisfied, you can appeal by filling out a property assessment appeal form. From there, you’ll go before the Ada County Board of Equalization, where you have a chance to prove that the assessed value of your property isn’t accurate.

As the Ada County website notes, “In presenting your appeal, the best evidence is typically sales data from the marketplace, written analysis from a realtor or other professional source.”

It’s also good to note that residents can’t protest values from previous years, so if you’re using sales data to support your valuation of your property, it should be taken within the previous year.

Please check with you tax professional as everybody's situation is unique and the tax rules may change.

Visit Idaho State Tax Commission website to more info

 

Posted in Home Buying
March 4, 2020

Interest Rates and Mortgage Payments

Interest Rates and Mortgage Payments

Interest rates have been historically low. Below we'll analyze and show how low interest rates can dramatically lower your monthly mortgage payments and help you achieve the goal of home ownership. Spring home buying  season is approaching our Boise real estate market. Many potential homebuyers are getting ready to enter the real estate market. If you’re thinking of buying a home or an investment property.  The chart below shows how average mortgage rates by decade have impacted the approximate monthly payment of a $200,000 home over time:

mortgage rates

Over the last 45 years, mortgage rates have ranged from a high of 18.63% (1981) to a low of 3.31% (2012). While it’s not likely that the average 30-year fixed mortgage rate will return to its record low, the current average rate of 3.45% is pretty close — all to your advantage.”

Low mortgage rates – like they are right now – benefit qualified buyers, saving them a lot of money over time.

It's important to remember, if interest rates go up, this can push many potential homebuyers out of the market. The National Association of Home Builders (NAHB) notes: “Prospective home buyers are also adversely affected when interest rates rise. NAHB’s priced-out estimates show that, depending on the starting rate, a quarter-point increase in the rate of 3.75% on a 30-year fixed rate mortgage can price over 1.3 million U.S. households out of the market for the median-priced new home.”

You certainly don’t want to be priced out of the market this year, and waiting may mean a significant change in your potential mortgage payment should rates start to rise. If your financial situation allows, now may be a great time to lock in at a low mortgage rate to benefit greatly over the lifetime of your loan.

Contact us anytime for more information and free buyer consultation.

 

Posted in Home Buying