Record Low Inventory, Prices Continue to Soar
Just when you thought inventory in the Boise real estate market couldn’t get any tighter…it did! There were 1237 homes for sale in March, 22.6% fewer than the same month last year, when I was already talking about how low our inventory was. As recently as September inventory was 2098 homes, a difference of over 800 homes versus this March, or a 40% decrease. While some of that is seasonal it is still a significant drop. Since demand remains very high, at the current rate of sales we currently have only 1.4 months of inventory. I don’t even have to check to confidently state that is a record low. Remember 6 months of inventory is a “stable” market, anything lower than 3 months is a strong seller’s market. 1.4 is almost off the charts, and if you exclude homes over $300K the numbers are even more startling. Inventory of “affordable” homes under $300,000 was 53.9% below a year ago and there is currently only 0.7 months of inventory available. Use $250K as the cutoff and there is only 0.5 months of inventory. Needless to say this makes buying a home pretty difficult for many buyers especially first timers. Multiple offers and price escalations are not just common, they are the norm in the under $300K world. Even in the $600-700K range inventory is only 2.5 months, still “very strong seller’s market. Finally, in the $700-800K range there is 3.9 months available, still firmly in seller’s market territory, but with a little more breathing room.
And despite how little there is to buy closed sales managed to increase 4.1% from March 2017 to 911 for the month. While we are beginning the ramp up to the spring/summer selling season it is still striking that sales in March were up 34.2% from the previous month even though we had a pretty strong February. New construction continues to be a strong factor, with 264 sold in March (+6.0%), representing 29% of all sales for the month.
This is all a perfect recipe for big time price increases and the market didn’t disappoint. We are firmly in record territory just about any way you slice it. The average price per square foot hit $156 a 12.2% increase from a year ago while the average sales price surged 21.0% to $340K. Keep in mind that this number had never topped $300K until last June and in less than a year, with the peak selling period yet to come we are already up to $340K. The Bubble question is certainly a legitimate one at this point, and while I don’t have a real answer to whether or not this is truly a bubble and if so how long will it last, I can say that the underlying conditions now are very different than they were in 2007-8. A major macro-economic upheaval (ie: war) could definitely send the market into a tailspin, but most borrowers are much more qualified now than they were in 2007 and that may translate into a better ability to weather short term economic “storms”. Let’s hope so!
SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR MARCH 2018
*Does not include manufactured homes **see detailed graphs below for more information.
|Type||# Sold||% +/-||% of Total Sold||# For Sale||% +/-||% of Total For Sale||$/SF||% +/-||Average Sold Price||% +/-||Days on Market||% +/-||Months Inventory|
Please share your questions and comments. And if you own a home in the Boise area and are curious about its value in the current market, even if you have no intention of selling please feel free to contact me. I would be happy to do a quick comparative market analysis for you. No cost and no obligation, it’s part of what I do. Have a great spring!
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702