Monthly Real Estate Market Report For November 2015

Sales Up, Inventory Down, But No Bubble For Now.

November was another very solid month for the Boise real estate market. While closed sales at 654 were down over 20% from October, consistent with the normal seasonal decline, they were up 10.3% from a year ago. Inventory on the other hand continues to decline.  There were 2154 homes for sale in November down 13.1% from 2479 in October and also down 11.6% from November 2014.  This represents 3.3 months of inventory at the current rate of sales, which, while low, is actually an improvement over recent months where we have been struggling to reach 3 months of inventory.  The average days on market also increased from 49 days in October to 58 in November, but I believe this can be attributed to the regular seasonal slowdown as we approach the Holidays.

 Many are concerned that this continuing combination of increased demand but declining inventory will lead to a price bubble, and ultimately a price correction.  I have been monitoring prices carefully since this trend started early this year and so far I believe prices are rising at a sustainable pace. November’s numbers would seem to confirm that. The average price per square foot ($127) was unchanged from October and up only 1.6% from a year ago.  Meanwhile the average sales price at $269K was barely up  from October and up 5.9% from November 2014. However in October’s report I expressed some mild concern that things were getting a little bit frothy since the average $/sf was +5.9% and the average sales price was +9.5%. November’s results would seem to, at least for the short term, put those fears to rest.

 There is also some speculation that as prices do continue to rise, albeit moderately, more and more buyers, especially first time buyers, will be priced out of the market.  This would be especially likely if interest rates do go up, as the Fed has signaled they will.  Their December meeting is next week so the future should be clearer then. In our market there may be enough demand through in-migration to offset the buyers who can no longer afford to buy. Nationally, however, economists are concerned.  The Wall Street Journal reported in late November that, “younger and middle income buyers had struggled to get into the market” and that, “more children are living with their parents than during the 2007-09 recession…despite substantial improvement in the economy.”* The fear is that the combination of low inventory and lack of affordability will “choke” the market. The article goes on to say that home sales in the West have declined 8.7% year over year while prices have shot up 8%.  Here in Boise, sales are up not down and prices have risen but more moderately than reported for the West as a whole.  This is a good example of the old saying that Real Estate is always local.  National, or in this case regional statistics are often irrelevant in any given market at any given time.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR NOVEMBER 2015

*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

654

+10.3

100

2154

-13.2

100

$127

+1.6

$269K

+5.9

58

-13.4

3.3

Non Distress

630

+12.7

96.3

2066

-11.1

95.9

$128

+1.6

$272K

+4.6

57

-14.9

3.3

REO

12

-52.0

1.8

20

-63.6

0.9

$101

+2.0

$203K

+38.1

71

+16.4

1.7

Short Sale

9

+28.6

1.4

65

-34.3

3.0

$85

-13.3

$174K

-6.5

116

+2.7

7.2

New Construction

143

+37.5

21.9

879

-3.2

40.8

$147

+12.2

$359K

+18.5

79

-15.1

6.1

                                 

 

So overall as we head into the end of 2015 the Boise market continues to be solid with growth in both volume and prices.  If interest rates do go up it will certainly have some effect on the market, but perhaps less so than in many markets due to our generally strong local economy, low unemployment, job growth (recently cited as the best in the nation), and in-migration from other states.  As the Holidays approach I want to thank all of you for making 2015 another great year for me personally in real estate and wish all of you and your families a fantastic Holiday Season and a healthy, happy, and prosperous New Year in 2016.

I look forward to continuing to provide this information every month and welcome your comments, questions and referrals.

  * Kusisto, Laura and Sussman, Anna Louie, “Lofty Prices Denting Home Sales”, WSJ, 11-24-2015, p.2

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 December 19, 2015 at 12:30 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , , , , ,

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