The Weather Outside Was Frightful, But The Market Was Quite Delightful
By any measure the winter weather in Boise since mid December has been difficult but the Boise real estate market has not yet felt any major effects. After a slight dip in closed sales in December caused not by the weather, but by an odd spike in December 2015 closings, the market had a very strong performance in January. Closed sales in Ada County numbered 589 which is an 18.8% increase over last year. January is by far the slowest month of the year for closings but we are still off to a good start for the year. To put the seasonal swings of the real estate market in Boise in context consider that in June, the busiest month for sales in 2016, there were 1240 closings—over twice as many as January. And while the weather did not seem to affect closings in January, it did affect pended sales, an indicator of future closings in February and March. Quite simply with frigid temperatures, deep snow, often nearly impassable side roads and several days of school closures January was not a good month to be out looking at houses. As a result pending sales dropped 5% in January and the number of homes available also dropped sharply (-19.4%) although this is only slightly more than the trend (-14%) in recent months. There were almost certainly some houses that might have listed in January had they not suffered water damage either due to ice dams, broken pipes, or crawlspace flooding. The disaster clean up companies have been absolutely swamped. I expect both pending sales and the number of homes for sale to start recovering quickly though and the demand is clearly still there. We are sitting on 2.5 months of inventory and the average days on market is 55. Both these figures are about 30% lower than a year ago. That makes sense given that we are selling 18.8% more homes with 19.4% less inventory than last January.
Prices do continue to rise but the increases still are well within the range that I often refer to as “sustainable”. The average price per square foot ($133) was up 6.4% over 2016 while the average sales price was actually only up 1.9%. Interest rates remain somewhat higher than what the pre-election norm has been but 30 year fixed rates at or just below 4% are popping up again and interest rates are not putting any downward pressure on prices at this point. Matthew Gardner, Chief Economist for Windermere, predicts rates will ease up to about 4.6% by the end of the year and while this could put a squeeze on some buyers as far as qualifying, he also feels that the likelihood of further rate increases as well as a tightening labor market will drive millennials and other first time home buyers off the fence and into home ownership.
SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR JANUARY 2017
*Does not include manufactured homes **see detailed graphs below for more information.
|Type||# Sold||% +/-||% of Total Sold||# For Sale||% +/-||% of Total For Sale||$/SF||% +/-||Average Sold Price||% +/-||Days on Market||% +/-||Months Inventory|
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Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702