Market Taps the Brakes Due to Severe Winter Weather
As expected the severe winter weather we all experienced in December and January had a negative impact on closings in February and will probably have an impact on March sales as well. After being up 18.8% in January versus 2016 there were 549 closed sales in February a 12.4% drop from a year ago and an 8.4% drop from January. Typically January is the slowest month of the year for closings so the fact that February had fewer closings is significant but I believe was almost entirely due to weather. The fact that 2016 was a leap year may have had a minor effect on the sales totals as well. Other market indicators remain strong and I expect by April trends will rebound on the sales front. If you compare the most recent quarter with the same quarter last year the market trends smooth out and we are actually still about 1% ahead of last year in closings.
Lack of inventory continues to be a problem especially in the lower end of the market. There were 1444 homes available in a 20.3% year over year drop. This has been pretty consistent for the last several months. The average days on market did go up from 55 days in January to 65 in February, again weather related. Because of the lower rate of sales in February the months of available inventory ticked slightly higher to 2.6 months. Remember however that anything below 3 months of inventory is still considered a strong seller’s market. It is also interesting to see that for the second straight month nearly 60% of all the available inventory was new construction (either built or to be built and listed in the MLS). That number is more typically in the 35-45% range.
The weather related drop in sales did not negatively impact prices in February. In fact quite the opposite. The average price per square foot ($139) was up 7.8% from a year ago and 4.5% over January. The average sales price rose 10.7% year over year to $290K. This is borderline bubble territory but may be a blip rather than a trend as the average sales price in January was only up 1.9%. Even new construction prices were up a robust 8.1% in February. While the average price point for new construction is generally 15-20% higher than for resale, the price increase trend line for new construction has generally lagged behind that for resale properties.
SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR FEBRUARY 2017
*Does not include manufactured homes **see detailed graphs below for more information.
|Type||# Sold||% +/-||% of Total Sold||# For Sale||% +/-||% of Total For Sale||$/SF||% +/-||Average Sold Price||% +/-||Days on Market||% +/-||Months Inventory|
I believe we will shake the weather caused sales drop by April and this spring should prove to be very active in the Boise market. Continued job growth and in-migration will keep demand high. The lack of inventory and slowly rising interest rates may provide somewhat of a counterbalance but in general the forecast at least for the remainder of this year is for the strong seller’s market to continue. Please feel free to contact me with your questions and comments and I love those referrals!
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702