Sales Down Slightly but Market is Still Hot!
As I write this the high temperature in Boise has just reached 90 degrees or higher for the 40th straight day! The Boise real estate market also remains hot despite the fact that closed sales in Ada County actually dropped 1% in July compared to a year ago. But sales numbers don’t reflect the mood of the market which is described by some of my colleagues as borderline “frantic” in certain areas and price ranges. Multiple offers and price escalations are not just common, they are a given in areas like the North and East Ends and for anything priced under $300K. The major factor inhibiting sales is the now all too familiar lack of inventory. So while sales at 1121 were down 1%, the number of homes for sale (2066) was down 12.2% and at the current rate of sales there is only 1.8 months of inventory. What does pop up on the market is selling more quickly as well. The average days on market is currently 31, 16.2% lower than last year. For those new to this report, I frequently cite 6 months of inventory and 60 days on market as indicative of a stable healthy market. So we remain in a very strong seller’s market. The demand is there but in many cases the product is not. New construction however has responded and builders are busy with 224 new homes sold in July, up 15.5%. This does not even include build jobs or custom homes that are not reported to the MLS so suffice it to things are cranking in new construction.
Prices, as one would expect, have responded to the high demand and low inventory and continue to be at or near record levels. The average price per square foot in Ada County was up 8.9% to $147, a new record, while the average sales price at $307K (+10.4%) came in just a hair below June’s $310K. Expect more of the same for the short term, however I do see a possible break coming at some point, I believe in the next year. I think the combination of rising rates and rising prices will eventually stifle demand somewhat by pricing more and more potential buyers out of the market. I also believe there are homeowners out there thinking of selling but trying to time the next market peak and as soon as some trigger hits, likely a news story casting doubt on the continued growth of the market, then there will be a relative flood of properties listed and in some sense it will become a self fulfilling prophecy—fewer buyers able to buy and “loads” of new inventory from Sellers afraid they will miss the peak. Then some buyers still in the game, particularly investors, may see the market shift and decide to wait and see if prices come back down, further reducing demand. It is often said that real estate, no matter what, is cyclical and the scenario above I think describes one way in which the cycle keeps itself moving.
SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR JULY 2017
*Does not include manufactured homes **see detailed graphs below for more information.
|Type||# Sold||% +/-||% of Total Sold||# For Sale||% +/-||% of Total For Sale||$/SF||% +/-||Average Sold Price||% +/-||Days on Market||% +/-||Months Inventory|
Assuming we all survive the eclipse and the heat, I think the overall outlook for the Boise real estate market is positive. For now, Sellers rejoice and Buyers don’t despair. Please feel free to contact me with your questions and comments. If you know someone you think would appreciate receiving the information in this report please forward it to them or have them contact me to be added to the list. And a special thanks to those of you who have referred clients—keep ‘em coming.
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702