Boise (Ada County) Real Estate Market Report for April 2014

Real Estate Sales in the Boise market seem to be stutter stepping this year.  After a strong January compared to 2013 sales in February fell off 13.7%. Then March produced a modest increase in sales (+1.0%) but April sales were off 7% versus a year ago.  And while the 713 closed sales in April was up 16.5% over March, that is to be expected as we move into the busier spring and summer selling season.  Granted we are going to be going against some pretty big 2013 sales figures for at least the next 3 or 4 months.  I would expect we will see April being more representative of what to expect in the coming months than January or even March are.  Inventories also continue to rise and are 35.6% higher than a year ago.  However the months of available inventory based on the current rate of sales dropped from 3.9 months in March to 3.6 months in April, both well below the 6 month market considered a stable market but considerably higher than last April’s 2.5 months of inventory. Of course last year sales were  zooming and buyers were complaining of not having enough choices and being forced into bidding wars. Not so much these days.

One big area of concern is new construction.  Remove new construction from the equation and sales in April were even with last year not down 7%, and months of inventory drops to 3.0.  Of course we can’t simply remove new construction from the equation and a closer look reveals trouble looming.  Closed sales of new construction in April were down 33% from a year ago and were even down (9.2%) compared to this March, and March’s number were also weak—down 16.4% from 2013.  Not the trend you would expect to see heading into spring.  Now there are some new home sales that don’t get reported in the MLS (custom build jobs for example) but that was true last year also, so far the sake of argument I don’t think they are a factor. Of what is reported to the MLS, inventories are up 31.8% and there is 6.9 months of available inventory (+17.6%). So while anecdotally I keep hearing how swamped builders are and that it is difficult to find lots not controlled by the big boys, it seems that in reality the air is starting to come out of the sails in that sector. New construction has a boom/bust component built into it though.  When demand increases it takes months for builders to ramp up to meet the demand so more often than not by the time they are able to supply that demand it has changed, and usually has softened.

So while sales are down and inventories are up what are prices doing? Still rising, of course! Counterintuitive, I know, but that is what is happening albeit at a slower more sustainable rate than last year. The average price per square foot ($117) was up a healthy 10.4% while the average sales price ($233,000) was up 8.4%. I don’t have much to say about that other than, “That’s cool”. Seriously though, it will be interesting to see how prices trend if the number of closed sales continues to lag behind last year as we go head to head with 2013’s strong numbers.  At some point you would think prices would react to a 35% increase in inventory like we have.  Maybe we need to hit 6 months of available inventory to really have an impact on prices.

 

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR April 2014

*Does not include manufactured homes **see detailed graphs below for more information.

 

Type

# Sold

% +/-

% of Total Sold

# For Sale

% +/-

% of Total For Sale

$/SF

% +/-

Average Sold Price

% +/-

Days on Market

% +/-

Months Inventory

All

713

-7.0

100

2542

+35.6

100

$117

+10.4

$233K

+8.4

65

0.0

3.6

Non Distress

636

+0.5

89.2

2348

+53.5

92.4

$119

+8.3

$240K

+6.2

61

+10.9

3.7

REO

45

+4.7

6.3

71

+24.6

2.8

$93

+10.7

$164K

+7.9

71

+2.9

1.6

Short Sale

29

-67.0

4.1

120

-58.3

4.7

$91

+9.2

$175K

+1.7

142

+5.2

4.1

New Construction

108

-33.3

15.1

748

+31.9

29.4

$130

+9.2

$309K

+14.4

107

+17.6

6.9

 

A quick note on distressed properties. As I have noted in past reports, REO properties continue to lurk in the shadows and were 6.3% of all sales last month.  This is still a concern especially because the numbers are slowly rising. Fortunately, the demise of short sales is continuing and they represented only 4.1% of sales.

As we head into summer I expect more of the same in the market as a whole.  Overall sales will likely struggle against 2013 numbers and prices will continue to rise at a slower pace than we have seen lately, but still healthy. While the economic recovery is somewhat tepid, interest rates remain very low (4.25-4.5%) and lenders are adjusting to all the new rules that they got hit with in January without much disruption to the average homebuyer.

Please feel free to contact me with your questions, comments, and referrals.  I am on track to have my busiest year since joining the industry but always welcome your referrals as they are the lifeblood of my business.  Thanks!

Cam Johnson

Realtor®

Windermere Access Realty

1412 W Idaho St.

Suite 120

Boise, ID 83702

208-258-2222 Office

208-283-3664 Cell

208-258-2230 Fax

 

camjohnson@windermere.com

 

Posted on May 13, 2014 at 9:34 am
Cam Johnson | Category: Monthly Real Estate Market Reports

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