Idaho is the Fastest Growing State in the USA
I’m sure you have seen the recent reports citing US Census data that Idaho’s population is growing faster percentagewise than any other state. One of these reports from local company, Park Place Property Management, indicates our state’s population grew 2.2% in the last year and that our state population is predicted to reach 1.9 million by 2025. Needless to say a lot of that growth will settle right here in Ada County and the Treasure Valley. The report also pegs Idaho’s current unemployment rate at 2.9%, which is at or near record territory. Combine that with the low interest rates that we continue to enjoy and you have the recipe for a booming housing market.
There’s one little problem: Homes sales in Ada County have declined the last two months in a row when compared to the previous year. The culprit is no surprise if you are a regular reader of this report: lack of inventory especially in the resale segment. Builders are building like crazy and almost 30% of all the homes sold last month were new construction. 57.6% of the homes for sale last month were new construction or under construction, but sellers of existing homes are not listing. Some are probably waiting for the next market peak, some are just emerging from being upside down during the last housing crash, and investors are reluctant to sell rental homes that are performing well as rents continue to spiral upward. Whatever the reason, Buyers had 8.5% fewer homes to choose from than a year ago, so all things considered the decline in sales is actually negligible, -0.2%. The demand is clearly there, but the supply is not.
So it is no surprise that prices continue to rise. The average price per square foot ($147) was up 7.3% vs 2016 but dropped off a bit from the record levels of around $150/sf that we saw a couple months ago. This is more seasonally driven than a sign of an actual market shift. December and January are typically the slowest time of the year for real estate as people focus on the holidays and buying things like cars and jewelry not houses. The average sale price was $314K, up 13.8%. This number is a little scary as it is above my self-proclaimed 10% cap on what I consider to be a sustainable price increase (ie: not a bubble). I wouldn’t worry just yet however.
SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR DECEMBER 2017
*Does not include manufactured homes **see detailed graphs below for more information.
|Type||# Sold||% +/-||% of Total Sold||# For Sale||% +/-||% of Total For Sale||$/SF||% +/-||Average Sold Price||% +/-||Days on Market||% +/-||Months Inventory|
The recently passed tax bill will certainly have some impact on the real estate market. While the change in the standard deduction and the allowable deductions for state and local taxes may have some mid to long range effects on Buyer behavior, I don’t expect a wholesale change in the housing market as a result. For many the decision to buy a home is more dependent on other factors such as pride of ownership, building equity, etc. And here in Boise the in migration looks to continue to keep housing demand high. Windermere economist Matthew Gardner recently released his projections for the housing market in 2018. While his report is focused on the national picture it still has some relevance to our market and I think is worth a read. I have attached the report as a PDF document for your convenience.
Please feel free to contact me with your questions and comments. Pray for snow!
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702