Boise (Ada County) Real Estate Market Report for January 2013

Homes sales typically drop off a cliff in January, and this year was no exception. There were 374 closed single family residential sales (including condos and townhomes) in January compared to 547 in December, a 31.6% drop.  No real surprise there.  What was surprising was that January closings were 10.7 below January 2012.  Monthly sales through all of 2012 had  been strong and shown healthy increases over 2011 even in the face of very low inventories.  So what happened in January?  January closings for the most part are the result of contracts that were signed in November and December.  So the question is really, “What happened in November and December?”.  Hard to say if factors such as the election, low inventory, lower consumer confidence as indicated by the tepid sales of Christmas gifts, fiscal cliff fears, or as some fear, that the economy in general is starting to sputter again had any effect. Maybe.  But the good news is pending sales, an indicator of future closings,  look strong and were up 2.5% versus 2012.  Remember things really started to ramp up at the beginning of 2012 so if we can post strong year to year numbers in the first quarter of 2013 we should have another good year.


Boise (Ada County) Market Stats for January 2013



# Sold

% +/-

% of Total Sold

# For Sale

% +/-

% of Total For Sale


% +/-

Average Sold Price

% +/-

Days on Market

% +/-

Months Inventory















Non Distress




























Short Sale














New Construction















So while closed sales were down in January the other two major market indicators, inventory and prices continue their recent trends.  Inventories are very low and continuing to drop and prices are surging at a worrisome rate.  Inventory dropped to 1762 in Ada County which is lower than at any time since at least 2005, which is as far as my database goes back. Distressed properties were 23.9% of available inventory and were 20.6 of all closed sales compared to 48.2% last year.  There are only 39 bank owned properties available currently compared with 104 in January of last year.


Prices quite frankly are scary right now.  The average price per square foot was up an incredible 25.9% while the average sales price was up 27.1%! This continues to be partly due to the diminishing numbers of distressed properties and the new construction renaissance.  Certainly the very low inventories have to, as any student of economics would expect, be causing upward pressure on prices as well.  The question, eerily reminiscent from 2005-6, is how sustainable is this rate of increase?  We have a lot of ground to make up after tumbling for 5 years but is it desirable to make it all up in just a couple years? Most would say that type of volatility is not good for the long term health of the market and I would have to agree.  Higher prices may start to force some buyers out of the market thus correcting itself.  Fewer buyer means more inventory and downward pressure on prices in theory. That is something that didn’t really happen in 2005-6 because of the ability of just about anyone with a pulse to get a loan.  Lending requirements are much tougher now so there is a good chance things will start to cool down a bit.  Also investors who flooded into the rental market when the cost to buy versus what they could rent for was strongly in their favor may start to back off as the math doesn’t pencil so well.


The next six months could very interesting indeed.  For buyers this continues to be a good time to buy as prices are still well below the peak and interest rates remain very low.  Low inventory is making it difficult for some buyers to find desirable properties in their price range though.  For sellers, things are definitely looking up, although in many cases, they are still unable to sell without being underwater.  This may be part of the blame for such low inventories right now.  There are sellers who want to sell but are keeping their properties off the market until they feel they can get a price that will prevent them from coming to closing with cash or short selling.


As always your questions, comments, and above all, referrals are welcome. 


Posted on February 12, 2013 at 12:34 pm
Cam Johnson | Category: Uncategorized

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