Sales and Prices Continue Winter Surge
The Boise real estate market had a second straight month of both double digit unit sales and price increases. The number of closed sales in Ada County was up 22.6% in February to 679. Part of the percentage increase can be attributed to the closing “hangover” from last year’s January “Snowmaggedon”. But sales were also up 5.4% from the previous month when the effects of the weather on closings had not yet been felt. All in all a very strong showing considering year to year sales trends were negative in November and December. At that time I attributed the slowdown to the lack of inventory, which is valid. But in February we managed to sell 22.6% more homes despite having 14.8% less inventory to choose from. There were only 1231 active listings in February, which I believe is the lowest number since well before the last boom—nearly 15 years ago. This translates into 1.8 months of inventory based on the current rate of sales and is the 12th straight month that inventory has been at 2 months or lower. New construction is trying to fill the gap, and 33.9% of all homes sold in February were new, but there just aren’t enough houses out there to meet the current demand.
So you guessed it, prices are going through the roof. Prices have actually been increasing in the Boise real estate market since bottoming out in the 1st qtr of 2011, but for the most part at an orderly sustainable pace meaning in the 5-10% range annually. In the last few months we have seen a substantial uptick in the rate at which prices are increasing. The average sales price in February in Ada County was $339,000 up 17.3% from 2017 while the average price per square foot ($154) was up 10.7%. Not only are these both record levels but consider that we only just broke the $300K threshold for average sales price in June of last year and we are already at $339K. I’m not using the “B word” yet but the market certainly seems to be headed in that direction. The question is with demand so high how long will it take for enough people to get priced out of the market to cause a correction? Hard to say especially since relatively cash rich buyers migrating here are a significant part of the buyer pool in our market. After all we were just named by Forbes as the fastest growing city in the country.
But ultimately we will need good job and wage growth and low interest rates, not just lifestyle, to keep things going. Unemployment is low, wage growth is solid although off a low base, and interest rates, while still low have creeped up recently. And compared to other states our overall economy is kind of in the middle of the pack. Business Insider recently ranked Idaho as the 20th best economy in the nation saying, “Idaho’s December 2017 unemployment rate of 2.9% was the seventh lowest in the country, and its nonfarm payroll job growth rate of 2.1% between December 2016 and December 2017 was the eighth highest. But Idaho had the second-lowest Q3 2017 GDP per capita of just $42,046, and the fifth-lowest December 2017 average weekly wage of $759.36.”
SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR FEBRUARY 2018
*Does not include manufactured homes **see detailed graphs below for more information.
|Type||# Sold||% +/-||% of Total Sold||# For Sale||% +/-||% of Total For Sale||$/SF||% +/-||Average Sold Price||% +/-||Days on Market||% +/-||Months Inventory|
Overall it remains a challenging time for buyers in a very strong Seller’s Market. The normal spring influx of new listings to the market may provide some relief as will new construction but prices will likely continue to rise sharply as well. Please don’t hesitate to contact me with your questions and comments and please share this report with anyone you would like. As always your referrals are the highest compliment. Thanks!
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702
*All reports are published March 2018, based on data available at the end of February 2018. All reports presented are based on data supplied by the Intermountain MLS. Intermountain MLS does not guarantee or is not in anyway responsible for its accuracy. Data maintained by the Intermountain MLS may not reflect all real estate activities in the market. Information deemed reliable but not guaranteed.