Boise Real Estate Market Report for August 2019

Sales Slowdown Continues in August

The number of homes sold in Ada County dropped 10% in August versus a year ago to 1113 homes, continuing a trend that has been with us for almost a full year now. Year to date sales are off 2.5% and while supply continues to increase (+2.9% in August) I still believe the primary constraint on market volume is lack of affordable supply not lack of demand.  And while the average days on market was up 30.8% from a year ago it is still at only 34 days, just over half of the 60 days that is considered indicative of a stable market. At the current rate of sales there is only 1.6 months of available inventory, well into “Strong Seller’s Market” territory.

The key words in the last paragraph were “affordable supply”, because even as unit sales have dropped prices continue to increase steadily at a rate significantly higher than overall inflation.  Unfortunately prices are also still rising faster than average wage growth in our market and an “affordability crisis” is looming (or already here). The average price per square foot in August was $180, up 7.1%, while the average sales price jumped to a new record of $398K (+8.2%). For more and more buyers, especially first timers and/or Millennials, buying a home in Ada County is out of reach.  The net effect of this continues to be muted by the influx of cash rich out of state Buyers but as the markets where those Buyers tend to come from slow down, as they are doing,  we may see a further drop off in sales, that is more demand driven. As pointed out in one of my recent reports, the “sweet spot” for the market has moved up to around $350K.  That is already too high for many buyers who already live here.  With real estate prices rising 8-10% per year and wages only going up 3-4% there is bound to be fewer qualified buyers as time goes on.  Low interest rates have helped the situation but we can’t count on them to stay low forever, even though they have done so far longer than most experts predictions.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR AUGUST 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
All 1113 -10.0 100 1823 +2.9 100 $180 +7.1 $398K +8.2 34 +30.8 1.6
New Construction 320 +3.9 28.8 820 +2.6 45.0 $186 +6.3 $426K +1.9 57 +21.3 2.6

 

Canyon County 541 +5.7 100 764 +20.5 100 $152 +16.0 $285K +16.8 32 +23.1 1.4

 

One interesting note that would tend to support the theory that lack of affordability may be starting to have an adverse effect on sales in Ada County, is that in Canyon County, where prices are significantly lower, sales were up 5.7% ( as opposed to -10.0% in Ada County).  And not only were unit sales up but prices were way up.  The average price per square foot  ($152) was up 16.0% while the average sales price ($285K) was up 16.8%.  Compare those to Ada County where the numbers were 7.1% and 8.2% respectively, about half the rate in Canyon County.  Of course if prices keep going up at that rate it won’t be long before Canyon County has it’s own affordability crisis.

Please feel free to contact me with your comments and questions. 

Cam Johnson

Realtor®

Windermere Real Estate/Boise Valley

1412 W Idaho St.

Suite 120

Boise, ID 83702

208-258-2222 Office

208-283-3664 Cell

camjohnson@windermere.com

Posted on September 18, 2019 at 1:55 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , , ,

Boise Real Estate Market Report for February 2019

More Options For Homebuyers This Spring, Market Continues to Calm

Based on your feedback and a desire to make this report even easier to digest in a short amount of time I am trying a new format this month. Rather than “conversational” text this month’s highlights will be presented in bullet point form. Please feel free to let me know what you think. A spreadsheet and graphs are included as always, but the bullet points are intended to summarize and highlight that information.

• Number of homes for sale 1455 (+18.2% vs Feb 2018)
• 4th straight month of positive year over year inventory, 2nd month in a row of double digit increases
• Closed sales (707) up 1.7% in February
• First monthly increase since October. Sales trend has been generally negative since last July
• Inventory at 2.1 months, 4th straight month over 2.0 after being at or below 2 for well over a year
• Average Days on Market at 52, highest since February 2018
• Average Days on Market are twice what they were in August (26)
• Average price per square foot in Ada County $171, up 11% vs 2018
• Lowest percentage increase in one year
• Average Sales Price $360K, up 6.8%
• Lowest percentage increase in almost 2 years
• New construction inventory up 23.4% (901), Sales up 14.3%
• 37.2% of homes sold in February were new construction
• 61.9% of homes for sale in February were new construction
• In Canyon County sales and inventory trends similar to Ada County but prices continue to surge
• Average $/sf +20.5%, Average sale price +19.2%

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR FEBRUARY 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
All 707 +1.7 100 1455 +18.2 100 $171 +11.0 $360K +6.8 52 -13.3 2.1
New Construction 263 +14.3 37.2 901 +23.4 61.9 $174 +7.4 $403K +4.7 78 -11.4 3.4

 

Canyon County 298 -4.2 100 643 +18.0 100 $141 +20.5 $255K +19.2 44 -21.4 2.2

 

 

Cam Johnson
Realtor®
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Suite 120
Boise, ID 83702
208-258-2222 Office
208-283-3664 Cell
208-258-2230 Fax

camjohnson@windermere.com

Posted on March 21, 2019 at 11:48 am
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , ,

Boise Real Estate Market Report for December 2018

Sales Continue to Slide but Prices at Record Level 

The Boise Real Estate Market in December was marked by sharply falling sales and sharply rising prices.  An odd couple to say the least. December’s 14.8% decline was the fourth in the last five months and sales for the most recent quarter combined are off 10.5% versus last year. Also for the 2nd straight month, after literally years of declines, the number of homes for sale was up 5.7% and pending sales, an indicator of future market activity were off 5.1%. Normally this would be bad news for sellers and at some point this will likely be the case, but for now prices seem unaffected by the drop in sales and are at record or near record levels. The average price per square foot was up 17% to $172/sf., a new record.  Meanwhile the average sales price was $363,000 (+16% )second only to the $368,000 recorded in August.  Even as the trend of declining sales has deepened the rate at which prices are rising has accelerated.  In November the average price per square foot and average sales price were up 12.3% and 13.6% respectively.

Conventional wisdom would say that a drop in sales is somehow a result of a drop in demand and that at some point prices should reflect that.  Until recently though it seemed a lack of supply was the primary market force keeping sales in check.  The demand was there but there was nothing to buy.  Now although inventory is still very low by historical standards we are seeing the number of homes for sale rise compared to a year ago with no apparent effects on the upward march of prices…so far.  Current inventory based on the rates of homes selling stands at 2.2 months the highest in almost a year, while the average days on market is 41 a 4.7% decline from last year. As a reminder, 6 months of inventory and 60 days on market are widely seen as indicative of a stable or “neutral” market as far as how much leverage buyers and sellers have.  So we are still in a strong seller’s market despite the sharp drop in sales. Continued in migration, stabilizing interest rates, and a generally strong local economy and job market seem to be enough to keep the party going.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR DECEMBER  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
All 750 -14.8 100 1640 +5.7 100 $172 +17.0 $363K +16.0 41 -4.7 2.2
New Construction 256 +11.3 34.1 1019 +14.0 62.1 $175 +10.1 $413K +9.0 57 +1.8 4.0

 

Canyon County 312 -9.0 100 641 -14.5 100 $136 +13.3 $250K +16.3 38 -9.5 2.1

One other area in the latest Boise real estate market numbers worth pointing out is the role of new construction in the current mix of homes for sale and being sold.  While overall sales were down 14.8%, sales of new homes ( not including custom build jobs) were up 11.3% and the number of new homes for sale jumped 14% versus last year. The 256 new homes sold in December was 34.1% of all homes sold while the 1019 new homes for sale represented 62.1% of all homes listed. Without new construction the market would be in serious trouble on the supply side.  For example, sales of pre-owned homes were off 24% in December and 10.5% for the most recent quarter.  This may be helping boost prices as newly constructed homes tend to be priced above the overall market average.  Currently the average price per square foot for new construction is $175 (vs $170 for re-sale homes), while the average sales price for a newly built home is $413,000 (vs. $337,000 for re-sale).

Based on what is happening in other markets around the country and predictions for a nationwide economic slowdown and possible recession in the coming months, I still believe that the current double digit price increases are unsustainable and we will see a gradual flattening of the price curve in the coming months.  Supply for the time being will likely stay pretty tight even with all the new construction occurring because there hasn’t been a strong enough trigger to get existing homeowners to sell.  Many who would like to sell and take a profit are worried that they won’t be able to find a replacement home that meets their needs and their budget.  Until sellers feel like they may be missing out on peak pricing if they don’t sell we will continue to see very few existing homes on the market compared to historical averages.

Please feel free to contact me with you comments and questions. 

Cam Johnson

Realtor®

Windermere Real Estate/Boise Valley

1412 W Idaho St.

Suite 120

Boise, ID 83702

208-258-2222 Office

208-283-3664 Cell

208-258-2230 Fax

camjohnson@windermere.com

Posted on January 15, 2019 at 3:03 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , , ,

Boise Real Estate Market Report for November 2018

Volume Continues to Drop, Prices Slow to React

First, my apologies. Due to technical issues I was not able to distribute a report last month but should be back on track moving forward. Fortunately, you didn’t miss much and the overall Boise real estate market trend remains the same. Sales volume is slowing and is now below where we were a year ago while prices continue to rise, albeit a tad slower than they were during the frenzy of this past spring and summer. There were 887 closed sales in Ada County in November, 6% below November 2017 and approximately 15% below October. The drop from October is largely seasonal but the year over year drop has occurred in 2 of the last 3 months and appears to be the trend as pending sales were also down 3.7% in November. Meanwhile for the first time in literally years, the number of homes for sale was actually up 5.4% compared to last year. There were 1859 homes listed and at the current rate of sales this is 2.1 months of inventory. While still historically very low it is only the second time in over a year we have had 2 or more months of inventory. Average days on market also ticked up to 35, again still historically low and indicative of a strong seller’s market but slightly above levels we saw this summer.

In talking to other agents and brokers there has been a palpable change in the feel of the market. This is also reflected nationally. For months we have been hearing that some of the nation’s previously hot markets such as New York, Seattle, San Francisco, and Portland were experiencing a slowdown. This past week the Wall Street Journal reported that a similar shift is occurring in some smaller markets such as Las Vegas, Phoenix, and Tampa. Bidding wars have been replaced by price reductions and inventory which was non-existent a few months ago has in some cases doubled. There are also more and more predictions of a recession in 2019. Fox News (sorry) reported last week that half of US CFOs say a recession, largely trade and tariff driven, will occur in 2019. While this will likely have some effect on housing, in markets like Boise the impact may be somewhat muted by continued in-migration due to quality of life and relative affordability. For more information on the national picture please check out Windermere Chief Economist Matthew Gardner’s 2019 Economic Forecast.

Meanwhile prices in the Boise real estate market continue to go up in double digits. The average price per square foot was $167 in November, up 12.1% versus 2017, but down 2.3% from October. The average sales price was $350K (+13.6%) but this was down about 2% from October. There is some normal seasonal fluctuation in prices so the numbers I would key in on are the year vs year ones. It is also typical for prices to lag behind a shift in volume. In the case of the last big recession, the market shift occurred in 2006 but prices didn’t peak until summer 2007. While in the current scenario prices may not fall much, if at all, the rate of increase has already dropped from the 15-18% per year that we saw this summer to the 12-13% we are seeing now. I still feel anything over 10% is not really sustainable given current wage growth and inflation so if we continue to slow down it may be a good thing for the overall health of the market.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR NOVEMBER 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
All 887 -6.0 100 1859 +5.4 100 $167 +12.1 $350K +13.6 35 -14.6 2.1

New Construction 241 +15.9 27.2 1010 +14.8 54.3 $172 +5.5 $401K +7.2 50 -24.2 4.2

Canyon County 382 +0.5 100 718 -9.9 100 $139 +20.9 $248K +18.7 29 -32.6 1.9

There are likely many reasons for the market shift that has begun in Boise. The usual culprits are definitely in play here: rising interest rates, prices forcing some buyers out of the market, declining consumer confidence in the national economy. But in our market unemployment is low, wage growth is strong and in-migration continues so the overall effects may be fairly mild compared to some more volatile markets. Still, we are near what I would consider the peak of the current pricing cycle so Buyers may decide to wait for prices to possibly drop while Sellers who have been sitting out may jump in to cash out at the peak. Both those will serve to accelerate the trend—fewer buyers and more inventory. Quite the opposite of what the market has brought the last few years.

Happy Holidays to you all. Please feel free to contact me with your comments and questions.

 

Cam Johnson
Realtor®
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Suite 120
Boise, ID 83702
208-258-2222 Office
208-283-3664 Cell
208-258-2230 Fax

camjohnson@windermere.com

Posted on December 20, 2018 at 1:51 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , , , , ,

Boise Real Estate Market Report for September 2018

That Predicted Market Shift?  I Think It Has Started…

For the last few months I have been describing subtle signs of storm clouds on the horizon that might lead to a much predicted shift in the market.  In September some big drops from those clouds started hitting my windshield.  Closed sales in September in Ada County (931) dropped 18.1% from a year ago, the biggest such drop since the market bottomed out in 2010-11. Furthermore sales dropped 21% in one month from August to September 2018, a much larger drop than would be expected due to normal seasonal slowdown. Pending sales dropped 3.8% while the number of homes for sales also dropped 7.3%. The drop in the number of homes for sale, while significant, is much smaller than the 15-25% drops we have become used to. As a result inventory at the current rate of sales rose to 2.1 months.  While this is still historically very low it is actually the highest it has been in the Boise real estate market in 18 months. Blame for the sharp drop in sales lies with the usual suspects: lack of available inventory, rising interest rates, and prices outpacing wage growth. Lack of affordability is continuing to force some buyers out of the market despite strong demand from out of state and repeat buyers.

Despite the drop in sales prices are still barreling ahead, but have moderated their upward spiral slightly and typically we would expect a real flattening in the price curve to lag several months behind the turning point in sales. The average price per square foot actually did drop  slightly from August to $167 but was still 12.1% ahead of September 2017.  The average sales price dropped a significant $19K from August but managed a 15.9% increase over last year.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR SEPTEMBER  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
All 931 -18.1 100 1944 -7.3 100 $167 +12.1 $350K +15.9 34 -2.9 2.1
New Construction 249 +2.0 26.7 881 +8.8 45.3 $173 +6.8 $395K +9.1 62 -1.6 3.5

 

Canyon County 379 -17.6 100 753 -23.9 100 $137 +17.1 $252K +19.4 24 -27.3 2.0

 

New construction sales continue to grow despite the overall decline in the market although in September sales were only up a modest 2% from 2017.  26.7% of all homes sold in Ada County were new in September a slight uptick from August (25.8%). More significantly, the number of new homes for sale rose 8.8% from a year ago and represented 45.3% of all available homes.  These figures do no include custom build jobs which are not typically reported in the MLS, but suffice it to say that new construction is a driving force in the market right now. If you back out new construction from the number of homes sold in September, sales of pre-existing homes dropped 23.6% compared to a year ago. Not surprisingly with the high demand for construction labor and materials, the average sale price of a new home runs about 18% higher than for a re-sale home.  The difference is actually probably larger than that if you try to compare “Apples to Apples” as far as size, condition, etc.. New construction tends to be on average larger and in better condition than older homes in established and historic neighborhoods.

Looking forward, most “experts” are predicting that current trends will continue although the pricing curve should slowly start to flatten.  It remains to be seen whether we will actually see prices drop in the next 6-12 months or merely stabilize at a more sustainable growth pace more in tune with overall inflation.

Please feel free to contact me with your comments and questions.  Also for those interested in hearing Windermere’s Chief Economist, Matthew Gardner, give his economic analysis and forecast for the Treasure Valley please plan to join us Thursday, October 25 from 10:00-11:30AM at JUMP in downtown Boise.  You can register for this free event here: https://www.eventbrite.com/e/presentation-by-matthew-gardner-windermeres-chief-economist-tickets-49746412860.

You can also just show up but be aware seating may be limited.  This was a great event last year and hope you can make it this year! 

Cam Johnson

Realtor®

Windermere Real Estate/Boise Valley

1412 W Idaho St.

Suite 120

Boise, ID 83702

208-258-2222 Office

208-283-3664 Cell

208-258-2230 Fax

camjohnson@windermere.com

Posted on October 11, 2018 at 3:07 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , ,

Boise Market Report for August 2018

Sales Stutter While Prices Keep Rolling 

In August the Boise real estate market revealed some subtle signs that the wheels of a predicted market shift may in fact be starting to turn.  One month does not define a trend but there are indicators worth watching as we head into fall.  First, the number of closed sales in Ada County fell 4.2% to 1179 versus last August, not a huge decline, but the largest we have seen in quite some time.  Secondly, pending sales, an indicator of future market activity dropped 7.9% in August.  This will likely be reflected in September and October’s closings. Lastly, while still down 13.7% from a year ago the number of homes for sale increased 13.4% from July meaning there were over 200 more homes available than in the previous month.  Albeit inventories are still near historic lows but are inching up lowly.  We had 1.5 months of inventory in August up from a low of just 1.0 in May and only slightly below last August’s 1.7 months. Average days on market were a remarkable 26 days, still indicative of a very strong seller’s market.

Booming new construction in the Boise real estate market had a significant effect on the numbers and helped soften the blow of dropping sales. Sales of newly built homes increased 17.8% and were 25.8% of all sales in August.  While sales of all homes dropped 4.2%, if you remove sales of new homes, sales of pre-existing homes dropped 10.1% while the number of pre-existing homes for sale was off 25.1%.  Homeowners just aren’t putting their houses on the market and as long as prices continue to explode we can probably expect more of the same. Once the market senses it has peaked expect a wave of inventory.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR AUGUST  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
All 1179 -4.2 100 1771 -13.7 100 $169 +15.0 $369K +19.4 26 -23.5 1.5
New Construction 304 +17.8 25.8 799 +6.3 45.1 $175 +9.4 $418K +14.5 47 -30.9 2.6

 

Canyon County 490 -1.2 100 634 -33.3 100 $132 +14.8 $245K +16.1 26 -18.7 1.3

Speaking of prices, the stumble in closings has yet to impact upward price trends as demand remains very high. The average price per square foot rose to $169, a record high, and 15% higher than last year.  That means buyers paid on average $22/sf more than they did a year ago.  Meanwhile the average sale price was $369,000 up $10K (2.7%) just from July and $60K (19.4%) over the last year. As prices continue to soar affording a house becomes more and more difficult for some buyers particularly first timers.  Many are forced to rent in an already tight rental market here in Boise.  Oddly enough this isn’t true everywhere even in other hot markets.  Bloomberg recently published an article with the headline, “Rental Glut Sends Chills Through the Hottest US Housing Markets” describing Seattle as having the biggest drop in rental prices of the 50 biggest cities. It says there is now a glut of newer amenity rich centrally located apartments that are fighting for tenants.  So far this has not really affected Boise despite the large number of apartments going up including many downtown.

It will remain to be seen whether the drop in sales was a hiccup or a trend in the Boise real estate market, but with the national media suggesting that at least in some markets a change is already underway I’m betting we are not far behind.  Please feel free to contact me with you questions and comments. 

Cam Johnson

Realtor®

Windermere Real Estate/Boise Valley

1412 W Idaho St.

Suite 120

Boise, ID 83702

208-258-2222 Office

208-283-3664 Cell

208-258-2230 Fax

camjohnson@windermere.com

Posted on September 14, 2018 at 10:47 am
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , ,

Boise Real Estate Market Report for June 2018

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
All 1247 -4.2 100 1561 -21.2 100 $166 +13.7 $363K +17.1 28 -20.0 1.3
New Construction 314 +1.6 25.2 680 -5.9 43.4 $172 +8.2 $411K +12.3 63 -17.1 2.2

 

Canyon County 499 -1.0 100 604 -26.5 100 $129 +13.2 $245K +17.2 23 -25.8 1.2

 

 

 

 

Cam Johnson

Realtor®

Windermere Real Estate/Boise Valley

1412 W Idaho St.

Suite 120

Boise, ID 83702

208-258-2222 Office

208-283-3664 Cell

208-258-2230 Fax

camjohnson@windermere.com

Posted on July 18, 2018 at 9:22 am
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , ,

Boise Real Estate Market Report for February 2018

Sales and Prices Continue Winter Surge 

The Boise real estate market had a second straight month of both double digit unit sales and price increases.  The number of closed sales in Ada County was up 22.6% in February to 679.  Part of the percentage increase can be attributed to the closing “hangover” from last year’s January “Snowmaggedon”.  But sales were also up 5.4% from the previous month when the effects of the weather on closings had not yet been felt. All in all a very strong showing considering year to year sales trends were negative in November and December.  At that time I attributed the slowdown to the lack of inventory, which is valid. But in February we managed to sell 22.6% more homes despite having 14.8% less inventory to choose from.  There were only 1231 active listings in February, which I believe is the lowest number since well before the last boom—nearly 15 years ago.  This translates into 1.8 months of inventory based on the current rate of sales and is the 12th straight month that inventory has been at 2 months or lower.  New construction is trying to fill the gap, and 33.9% of all homes sold in February were new, but there just aren’t enough houses out there to meet the current demand.

So you guessed it, prices are going through the roof. Prices have actually been increasing in the Boise real estate market since bottoming out in the 1st qtr of 2011, but for the most part at an orderly sustainable pace meaning in the 5-10% range annually.  In the last few months we have seen a substantial uptick in the rate at which prices are increasing.  The average sales price in February in Ada County was $339,000 up 17.3% from 2017 while the average price per square foot ($154) was up 10.7%.  Not only are these both record levels but consider that we only just broke the $300K threshold for average sales price in June of last year and we are already at $339K.   I’m not using the “B word” yet but the market certainly seems to be headed in that direction.  The question is with demand so high how long will it take for enough people to get priced out of the market to cause a correction?  Hard to say especially since relatively cash rich buyers migrating here are a significant part of the buyer pool in our market. After all we were just named by Forbes as the fastest growing city in the country.

But ultimately we will need good job and wage growth and low interest rates, not just lifestyle,  to keep things going.  Unemployment is low, wage growth is solid although off a low base, and interest rates, while still low have creeped up recently.  And compared to other states our overall economy is kind of in the middle of the pack.  Business Insider recently ranked Idaho as the 20th best economy in the nation saying, “Idaho’s December 2017 unemployment rate of 2.9% was the seventh lowest in the country, and its nonfarm payroll job growth rate of 2.1% between December 2016 and December 2017 was the eighth highest. But Idaho had the second-lowest Q3 2017 GDP per capita of just $42,046, and the fifth-lowest December 2017 average weekly wage of $759.36.”

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR FEBRUARY 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
All` 679 +22.6 100 1231 -14.8 100 $154 +10.7 $339K +17.3 61 -6.2 1.8
Non Distress 673 +24.4 99.1 1226 -13.8 99.6 $155 +10.7 $340K +17.2 60 -6.2 1.8
REO 3 -66.7 0.4 2 -84.6 0.2 $120 +7.1 $245K +13.4 46 +130.0 0.7
Short Sale 3 0 0.4 2 -75.0 0.2 $117 +4.5 $195K -31.3 108 -60.4 0.7
New Construction 230 +41.1 33.9 730 -11.8 59.3 $162 +8.7 $387K +11.8 88 -6.4 3.2

 

Canyon County 301 +36.8 100 545 -16.7 100 $117 +11.4 $215K +13.2 57 -5.0 1.8

 

Overall it remains a challenging time for buyers in a very strong Seller’s Market.  The normal spring influx of new listings to the market may provide some relief as will new construction but prices will likely continue to rise sharply as well. Please don’t hesitate to contact me with your questions and comments and please share this report with anyone you would like.  As always your referrals are the highest compliment.  Thanks! 

Cam Johnson

Realtor®

Windermere Real Estate/Boise Valley

1412 W Idaho St.

Suite 120

Boise, ID 83702

208-258-2222 Office

208-283-3664 Cell

208-258-2230 Fax

camjohnson@windermere.com

 

*All reports are published March 2018, based on data available at the end of February 2018. All reports presented are based on data supplied by the Intermountain MLS. Intermountain MLS does not guarantee or is not in anyway responsible for its accuracy. Data maintained by the Intermountain MLS may not reflect all real estate activities in the market. Information deemed reliable but not guaranteed.

Posted on March 15, 2018 at 4:44 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , , ,

Boise Real Estate Market Report for January 2018

Sales Rise and Prices Explode in January

After two straight months of year over year sales declines, in January closed sales in Ada County were up 8.2% to 644.  While this is still well below the 851 homes sold in December, January is usually by far the slowest month of the year. Last year’s Snowmageddon may have had some impact on sales in the latter part of January 2017 but the main negative effects on sales were in February and early March.  Regardless, January’s numbers are strong especially when you consider that the inventory of available homes was down 12.7% from a year ago. While the average days on market crept up a bit to 47 days this was still 14.5% lower than 2017 and the total months of inventory based on the current rate of sales was a very tight 2.0.  New construction continues to provide much needed inventory. In January 63.5% of all homes available were newly constructed or under construction while there were 171 closed sales (+27.6%).

While prices have been rising steadily for years in response to the high demand and low inventory, in January prices exploded.  The average price per square foot hit $153, a new record and a 15% increase from last January and a 4.1% increase in just one month from December 2017.  The average sales price hit $326K,  also a new record, $12,000 (+3.8% ) above December 2017 and a whopping 22.6% above January of last year.  As with closed sales, the winter weather may have had some impact last year especially towards the end of the month but I think most of this year’s surge in prices is due to the fundamental market forces of very low inventory coupled with very high demand.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR JANUARY 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
All` 644 +8.2 100 1271 -12.7 100 $153 +15.0 $326K +22.6 47 -14.5 2.0
Non Distress 638 +10.0 99.1 1264 -12.2 99.5 $153 +14.2 $327K +21.6 47 -13.0 2.0
REO 4 -71.4 0.6 2 -71.4 0.2 $132 +33.3 $248K +41.7 41 -42.3 0.5
Short Sale 0 -100.0 0.0 4 -60.0 0.3 0 -100.0 0 -100.0 0 -100.0 4.0
New Construction 171 +27.6 26.6 807 -6.9 63.5 $161 +7.3 $385K +17.0 63 -22.2 4.7

 

Canyon County 269 +35.2 100 624 -13.8 100 $114 +11.8 $223K +21.2 48 -12.7 2.3

As mentioned last month, the new tax law could have some impact on our real estate market as the allowable deductions have changed.  Most of the changes will be largely unnoticed here though as compared to higher priced areas and because of how high demand is currently.  Also in the news is the revelation that after years of reports that Millennials  were not as likely to purchase a home as previous generations because they value experiences over things, now the analysts are saying the opposite:  the nationwide housing boom is being driven by first time home buyers primarily Millennials.

A couple other tidbits: we reached somewhat of a milestone in January in that for the first time since at least the end of the previous upcycle in 2007, there were 0, read: ZERO short sales in Ada County in January.  While 4 REO (bank owned) properties did close, “distressed” sales as a whole only represented six tenths of one percent of the market.  Compare that to the roughly 50% figure when the market bottomed out in 2010-11.  We’ve come a long way baby!

Secondly, for those of you who were fortunate enough to see Windermere Chief Economist, Matthew Gardner when he spoke in Boise last fall, or who have in interest in the statewide real estate market, you may want to take a look at his latest report on the Idaho real estate market for the 4th quarter of 2017. Click HERE to view the report.

Please don’t hesitate to contact me with your comments and questions and remember I am never too busy for your referrals. And whether you ski or not, don’t forget to Pray for Snow! 

Cam Johnson

Realtor®

Windermere Real Estate/Boise Valley

1412 W Idaho St.

Suite 120

Boise, ID 83702

208-258-2222 Office

208-283-3664 Cell

208-258-2230 Fax

camjohnson@windermere.com

Posted on February 16, 2018 at 2:05 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , , ,

Boise Real Estate Market Report for November 2017

Low Inventory Flattens Sales but Not Prices

In a trend that has persisted for most of this year the number of closed sales in the Boise real estate market is being held in check because of the lack of available inventory. There were 903 closed sales in Ada County in November, down 0.1% from 2016. While we have had a few months with solid year over year gains, YTD sales overall are up a modest 3.3%, which might be surprising to many especially given all the coverage of how “crazy” the market is.  What is crazy is how little inventory there is even though demand is very high.  November inventory was 1764 which is off 9.3%,  while year to date inventory is down 13.1%.  So we have managed to squeeze 3.3% more sales out of 13.1% less inventory, a clear sign of a strong seller’s market. New construction continues to boom and provide much needed inventory but at a higher price point than resale property. In fact 49.9% of the available homes in November were new construction but the prices for those homes were at an average 30% premium over resale property.

While the average days on market has climbed somewhat to 41 from a low of 31 in July it is still well below the 60 days that is considered a stable even market.  The last time we were at 60 days or more was in February(65).  Remember Snowmageddon? All that being snowed in stuff kept people from buying and selling houses.  Even though the bulk of the nastiness was in December and January, it’s impact on the market was mostly evident in February since most sales take 30-45 days to close. In all fairness, average days on market normally is seasonal and almost always is at its highest in the winter months. Also seasonally driven, the months of available inventory edged up slightly from October and sits at 2 months even.  November was the first time this figure has reached 2 since…you guessed it, February (2.6).  Six months of inventory is considered stable and anything below 3 months is considered a strong sellers market.  The last time we broke the 3 month threshold was in January of 2016.

So with super low inventory and super high demand market prices have reacted accordingly.  When compared to 2016 we are seeing strong increases, but November’s numbers came in just slightly below the all time records that we hit in October, although we have been at or near all time highs every month since the spring.  The average price per square foot was $150 in November, up 10.3% from 2016 but down $1 from October’s record.  Meanwhile the average sale price was $308K, a tick below October’s $310K, but still up 11.2% from last November.

 

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR NOVEMBER 2017

*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
All` 903 -0.1 100 1764 -9.3 100 $150 +10.3 $308K +11.2 41 -21.2 2.0
Non Distress 897 +0.7 99.3 1750 -8.5 99.2 $150 +10.3 $308K +10.4 40 -21.6 2.0
REO 3 -66.7 0.3 4 -75.0 0.1 $84 -26.3 $183K +2.2 79 -16.0 1.3
Short Sale 3 -25.0 0.3 10 -28.6 0.6 $117 +13.6 $384K +116.9 125 -23.3 3.3
New Construction 201 -2.0 22.3 880 -3.0 49.9 $163 +8.7 $372K +12.4 67 -1.5 4.4

 

Canyon County 369 -2.1 100 797 -14.0 100 $115 +11.7 $209K +11.9 43 -12.2 2.2

 

While the Republican tax bill, if it passes, could have some nationwide impact on the housing industry, the local market factors that I have identified consistently in my reports will likely remain in place.  Low unemployment, reasonable income growth, and continued in-migration due to lifestyle and affordability (for some) will likely keep our market humming at least in the short term.  I continue to believe reduced affordability caused by quickly rising home prices outpacing income growth for locals will be the factor that has the most effect on our local market.

Please feel free to contact me with your questions and comments.  Happy Holidays to all and Best Wishes for a Healthy and Prosperous New Year! 

Cam Johnson

Realtor®

Windermere Real Estate/Boise Valley

1412 W Idaho St.

Suite 120

Boise, ID 83702

208-258-2222 Office

208-283-3664 Cell

208-258-2230 Fax

camjohnson@windermere.com

Posted on December 13, 2017 at 1:27 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , ,