Low Inventory Pinches Off Sales Growth in June
With a few minor exceptions closed sales in the Boise real estate market have continued to grow despite record low inventories but in June sales (1247) were off 4.2% from 2017 and also down slightly from May 2018. This drop was primarily a function of lack of available choices for buyers as demand remains very strong. The number of homes for sale at 1561 was down 21.2% from a year ago. Inventory remains extremely tight with the average days on market dropping to 28, the lowest I have ever seen while the months of available inventory edged up slightly from May’s record low 1.0 months to 1.3 months. By any typical method of evaluation this is an absurdly tight market for buyers right now. While I do predict that rising prices will eventually erode the typical buyer’s purchase power to the point that the market slows down, June’s drop in sales was not driven by drop in demand but by lack of options for buyers in the market.
Needless to say given this scenario, prices continue to charge forward further into record territory. The average price per square foot was $166 up 13.7 from a year ago while the average sales price jumped nearly $20K in one month to $363,000. Percentage wise we were up 17.1% compared to June 2017. I believe these types of numbers are unsustainable and will eventually lead to the next market slowdown probably within the next 12-18 months. As more buyers find themselves priced out of the market demand will depend more and more on the cash rich typically out of state buyer. While for now there seems to be an almost endless supply of these that will change especially if markets on the west coast slow down as in some cases they have already started to do. Sellers trying to time the peak of this cycle should be on notice that the time is approaching and will be behind us by the time most people are aware it even occurred. Anecdotally some of my colleagues have already commented that they seem to see an uptick in price reductions and back on market listings (likely due to appraisal issues). While the statistics don’t bear that out currently, often the signals of a market shift are more a feeling than the numbers will reveal for a period of time. Anyone out there getting a feeling change is in the air? I’m personally not there but…
SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR JUNE 2018
*Does not include manufactured homes **see detailed graphs below for more information.
|Type||# Sold||% +/-||% of Total Sold||# For Sale||% +/-||% of Total For Sale||$/SF||% +/-||Average Sold Price||% +/-||Days on Market||% +/-||Months Inventory|
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702