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|
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!
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702