November was a Hot Month for Boise Real Estate Sales
While the temperatures may have been dropping, if anything, the Boise real estate market was heating up. Closed sales at 885 were 32.3% ahead of 2015 despite the continued lack of adequate inventory. The number of homes for sale dropped 9.7% from a year ago to 1945 and this translated into 2.2 months of inventory—still firmly in “strong seller’s market” territory. Not surprisingly home are selling on average 10 faster than last year with the average days on market currently sitting at 52. Whatever pre-election jitters people may have had did not deter people from buying homes in Boise.
Speaking of the election, The Wall Street Journal proclaimed “Home Loans Enter Uncertain Era” in a November 14th headline. They were referring to potential changes that may occur under the new administration and cited two main areas of concern—interest rates and regulation. While it remains to be seen what will happen long term with interest rates for the short term the roughly ½ point spike that occurred right after the election has already started to reverse itself and has had no major impact on the market. As for regulation, speculation is that Trump and a Republican controlled Congress wil look to loosen lending regulations and therefore allow more people to purchase homes. While this is generally positive, too much freedom has consequences lest we forget the lessons learned in the last bust. The new regulations have been very effective in preventing the type of bubble that many markets, Boise included, experienced 10-12 years ago. So while I believe a common sense look at what regulations could be modified or repealed is good, I also appreciate that with the new rules our market has prospered and maintained sustainable price increases since 2011.
November is a good example of that. While sales jumped over 30% and inventory is very tight, prices continue to rise at only a moderate clip especially when one adjusts for overall inflation. The average sales price in Ada County in November was $277,000 up 3.7% while the average price per square foot jumped 7.1% to $136. As I reported last month prices are basically at record highs now even compared to the peak in 2006. One difference with our current situation is that the increase in prices has been, for the most part, slow and steady and has taken a full 5 years to get back to those 2006 levels. If you remember, the rate at which prices were increasing starting in 2004 through 2006 was much steeper. Anyone could get a loan so prices took off. This time around that is not the case and the growth in the market has been much more “real” in my opinion.
SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR NOVEMBER 2016
*Does not include manufactured homes **see detailed graphs below for more information.
|Type||# Sold||% +/-||% of Total Sold||# For Sale||% +/-||% of Total For Sale||$/SF||% +/-||Average Sold Price||% +/-||Days on Market||% +/-||Months Inventory|
Just for comparison sake even though this report covers only Ada County, I ran the number for Canyon County (Nampa, Caldwell, Middleton, etc.) and the trends are very similar albeit on a smaller scale. Closed sales were up 31.2% while inventory is down 5.5%. Average sale price at $186K is up 8.8% while the average price per square foot at $103 was up 7.3%. There are 2.5 months of inventory in Canyon County and the average days on market is 49 which is down 15% from a year ago. Very impressive numbers indeed.
Thanks as always for your comments, questions, and referrals. I hope you and yours all have a fantastic Holiday season and 2017 brings health, happiness, and
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702
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