Homes Sales Up Slightly in September But There’s A Catch…
The number of closed sales in the Boise real estate market was up slightly in September versus a year ago, seemingly bucking the recent trend of declining sales. There were 967 closed sales in Ada County (+0.9% vs 2018) but looking back also reveals that September 2018 was a particularly slow month bracketed by relatively strong sales in both August and October. Looking at the results on a quarterly basis provides a more realistic view of the market in this case and sales for the most recent 3 months are off 2.5% year to year. Also telling is the fact that sales from August to September of this year dropped 14.5%, although much of that can be attributed to the normal seasonal drop off in sales heading into fall. Inventory continues to be near historic lows at 1.9 months while the average days on market is up 5.9% to 36, also still near historic lows.
Several people have asked why I pay so much attention to sales trends when all they really care about are price trends. “Is my house going up in value or going down?” “As a buyer am I going to pay less if I buy now or wait?” are the most common questions I hear. Well, typically prices are influenced by supply and demand and market trends in those areas generally are good predictors of future pricing trends. Prices tend to lag somewhat in real estate, so a drop in sales (demand) and/or an increase in inventory (supply) may not be reflected in sales prices for several months. For example, Boise real estate has been slowing volume wise for most of this year but prices continue to rise much faster than is sustainable. The rate has dropped off somewhat from the scorching 15%+ annual increases we saw in 2016-18 but we are still flirting with double digit increases now even as volume is flat to down. In September the average price per square foot in the Boise market was $180, up 7.8% and tied for the record high set last month. The average sale price meanwhile was up 13.2% to $395,000 or $46,000 higher than one year ago. The obvious conclusion here is that demand is not the problem, the supply of available homes, especially “affordable” ones, continues to be the biggest barrier to market sales growth. The average list price of homes for sale in the Boise real estate market is currently $504,000– not affordable for most buyers.
SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR SEPTEMBER 2019
*Does not include manufactured homes **see detailed graphs below for more information.
|Type||# Sold||% +/-||% of Total Sold||# For Sale||% +/-||% of Total For Sale||$/SF||% +/-||Average Sold Price||% +/-||Days on Market||% +/-||Months Inventory|
Barring any unexpected macro-economic or political changes I believe we can expect more of the same in the Boise real estate market in the near future. Continued in-migration (not just from California!), a relatively strong economy, and very low interest rates will continue to drive the demand side while our struggles with adequate supply of affordable options for buyers will also likely continue. New construction continues to outperform the market as a whole but don’t necessarily help the affordability issue as the price points on newly built homes are typical higher than for resale. Please feel free to contact me with any comments or questions.
Mark your calendars!
Windermere is fortunate to be able to bring our Chief Economist, Matthew Gardner, to Boise for the 3rd year in a row to give a presentation on the Idaho Economic and Real Estate Outlook for 2020. He will be speaking at JUMP! On January 30th. I will have a limited number of tickets for those that contact me. Corporate sponsorships are also available for reserving tables. In the past this has been a great event! Please let me know if you are interested in attending.
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702