Volume Down But Prices Keep Rising
It starting to sound all too familiar: In July closed sales in the Boise Real Estate Market were down but prices keep rising. There were 1203 closed sales in Ada County last month a modest 1% drop from a year ago but as in recent months the issue seems to be a lack of inventory not a lack of demand. Even though there were over 15% more homes available for sale, based on the current rate of sales this represents only 1.5 months of inventory. Homes that do come on the market are still selling quickly—the average days on market is 30, indicative of a strong Seller’s market.
Prices continue to reflect the strong demand even though actual unit volume has been flat or down for months. The average price per square foot was $182 in July, up 9% from 2018 and a new record high. Meanwhile the average sold price jumped 7% to $384K but was actually down from June’s record high of $395K. I’m guessing a few high dollar sales may have skewed the data in June. The good news is that while prices are still showing solid increases the percentage has dropped into the single digit range, which I believe is more “sustainable” than the 15-18% increases we have seen as recently as a year ago. By “sustainable” I mean that when wage growth and overall inflation are considered the current real estate price increases don’t suggest we are headed for a bubble or that large chunks of potential buyers will get priced out of the market in the near future especially as long as interest rates stay low. 30 year fixed rates under 4% for conventional loans are the norm right now.
SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR JULY 2019
*Does not include manufactured homes **see detailed graphs below for more information.
|Type||# Sold||% +/-||% of Total Sold||# For Sale||% +/-||% of Total For Sale||$/SF||% +/-||Average Sold Price||% +/-||Days on Market||% +/-||Months Inventory|
For the short term I believe we can expect more of the same as the combination of low interest rates, a relatively strong local economy, and continued in-migration from generally higher priced markets will continue to drive demand and affordability, though under pressure from prices that have been rising steadily for over 7 years, is still good compared to other large metro areas in the West. For a look beyond Ada County at statewide trends please review the latest Gardner Report for Idaho in Quarter 2 as presented by Windermere Chief Economist Matthew Gardner. Please feel free to share your questions and comments. Thanks for reading!
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702