Market Stays Hot—Sales Up, Prices Up, Inventory Still Down
The Boise real estate market continued to barrel forward in August and surprisingly despite continued very tight inventory closed sales were also up significantly for the month. There were 1198 closed sales in Ada County in August a 9.3% increase from a year ago and a 6.9% jump from July. Meanwhile inventory continued to drop from already seriously low levels. There were 2051 homes available, a 12% drop from 2016 and based on the current rate of sales we have only 1.7 months of inventory, a slight drop from July’s 1.8 months. Not surprisingly what inventory there is continues to sell quickly although the average days on market did increase slightly to 35 vs. 31 in July. A very tight market no matter how you slice it.
Prices continue to respond to the pressure of low inventory and have been at or near all time levels for the last three months. The average price per square foot at $147 (+8.9% vs 2016) is tied for the record set in July, while the average sales price of $309K (+9.2% vs 2016) is one tick below the record $310K recorded in June. Look for these trends to continue locally for the short term. There was actually a very good article in The Idaho Statesman this week looking at the current real estate market and specifically some of the reasons for low inventory such high building costs limiting new construction, and a nationwide tendency for people to stay in their current homes longer than before. http://www.idahostatesman.com/news/business/article173140886.html
I would add to that list by saying I think there are some owners that are ready to sell but are trying to time the market peak. As discussed in my report last month this is tricky business because almost by definition you won’t know when the peak is until it has passed. Once those sellers sense it has in fact come and list their homes the sudden surge of inventory can actually contribute to prices dropping further. For now though, the combination of continued low interest rates, job growth and in-migration seem to be enough to keep the Boise market on track.
SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR AUGUST 2017
*Does not include manufactured homes **see detailed graphs below for more information.
|Type||# Sold||% +/-||% of Total Sold||# For Sale||% +/-||% of Total For Sale||$/SF||% +/-||Average Sold Price||% +/-||Days on Market||% +/-||Months Inventory|
Nationally the Wall Street Journal recently reported as far as the multi-family housing market is concerned, “the pace of improvement is slowing and cracks are starting to appear.” They cite rapidly rising rents that caused overbuilding of apartments in some areas but also pushed some families back towards home ownership which has led to rising vacancies, stabilizing rents, and a drop in multifamily construction. It seems like that cycle has not yet played out in Boise. Rents keep rising and apartments still seem to be going up everywhere. The same factors that continue to drive the single family market in Boise, as noted above, are likely in play locally for rental properties as well.
I also wanted to let you know that I will be giving a very brief presentation on Housing Trends in the Treasure Valley at the Boise Neighborhood Interactive, a day of speakers and breakout sessions focused on community topics most important to you and your neighborhood. The event is being held at the Grove Hotel on Saturday, October 14. More info: http://energize.cityofboise.org/news/pressrelease/2017/10/boise-neighborhood-interactive/
Please feel free to contact me with your comments, questions and referrals.
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702