May Was Another Hot Month For Boise Real Estate
It’s starting to sound like a broken record when I report that the Boise real estate market has broken another record. But it just keeps happening. May saw record high prices yet again. The average price per square foot jumped to $164, up $3 from April and up $21 (14.7%) from a year ago. Meanwhile the average sales price also set a record at $345,000. This is up $4,000 from April and $47,000 (+15.8%) for the year. Sellers are not only in the driver’s seat, they are in the fast lane.
The cause of these record breaking prices is no secret and has been the case for many months—extremely low inventory and very high demand. Boise continues to be “discovered” as a great place to live with good job growth and reasonable costs of living compared to our west coast neighbors. Boise seems to make just about every list for desirability of late and people are moving here. That coupled with few existing owners leaving or listing their homes has put us in a pinch. While closed sales (1242) rose 12.7% in May, available inventory (1323) was down 28.3% from a year ago. If you notice those two numbers are pretty close together meaning homes are selling almost as fast as they come on the market. Further indication of this is that we currently only have 1.1 months of inventory, which is probably also a record. Builders are building as fast as they can and they are definitely having an impact. 334 new homes (listed in the MLS) sold in May up a whopping 51.8%. This number represents 26.9% of all the homes sold while new home inventory accounted for 46.2% of all inventory.
SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR MAY 2018
*Does not include manufactured homes **see detailed graphs below for more information.
|Type||# Sold||% +/-||% of Total Sold||# For Sale||% +/-||% of Total For Sale||$/SF||% +/-||Average Sold Price||% +/-||Days on Market||% +/-||Months Inventory|
Of course the big question is how long will the market be able to maintain the current pace? The exact timing of market swings are pretty hard to predict but there are some signs that we may be getting close to either a slowdown or possibly even somewhat of a correction. For one, we have seen prices rising for seven solid years in a row. Secondly, interest rates have risen modestly and there are indications they will rise further especially if inflation picks up. Thirdly, as prices continue to rise and inventory remains low more and more people will either get priced out of the market or simply give up looking. This doesn’t seem to have deterred many of the cash heavy out of state buyers looking to move here. Those buyers ability to make the move to Boise hinges on their ability to sell for a large profit in the current home markets, particularly the west coast. There are some indications that those market maybe starting to slow down and that we could see a gradual trickledown effect if those market do in fact slow down. One thing is for sure—real estate is both cyclical and local. It’s not a matter of if the market will slow it’s when, and while what happens in other markets may have some effect here local factors have a much bigger impact.
Please feel free to contact me with your questions, comments, and referrals. You may have noticed that I did not break out the numbers for distressed properties this month. In recent months the number of distressed properties in the Boise market has dropped so low there really is no significance to them other than merely reporting how low they are. I hope distressed properties continue to be statistically irrelevant for many years to come. Have a great summer!
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702