The Calm Before The COVID-19 Storm?
First of all, I hope you are all well and safe. We have all experienced a once in a lifetime (I hope) event in the last 30 days and as you know the situation is still changing by the hour with much more to come. Plus we had an earthquake!
That being said, in March the Boise real estate market was relatively unaffected by the public health, economic and cultural upheaval which began to manifest itself in our area approximately 30 days ago. In fact March was another very strong month for Boise real estate. Sales and prices were both up in double digits and inventory remains at record or near record lows. One can only assume that this is the proverbial calm before the storm and that real estate will be both directly and indirectly impacted by COVID-19. The severity of those impacts on Boise real estate remain to be seen but by virtually all measures our economy and social habits have seen the swiftest, most dramatic changes in modern history. We know nothing about how long this will last or what the lasting impacts on employment, financing, and investment will be. In the past I have often made predictions for the short term future of the Boise real estate market with the disclaimer of, “barring any unforeseen macro-economic or political events.” Our current situation definitely qualifies! The only prediction I can make is that change is definitely coming to the market. There are too many moving parts to say with any certainty if the changes will primarily benefit buyers or sellers, although I suspect that buyers/investors who have cash may be presented with some opportunities in the coming months. Not much of a prediction since cash is king in almost all difficult markets. There have already been significant changes to so called Jumbo Loans, which are mortgages above the limit for “conventional” loans which is currently $510,400. Many banks and investors are either no longer writing Jumbo loans or have significantly changed their underwriting on these loans. Windermere’s chief economist, Matthew Gardiner, provides a brief overview of some of the changes in this video.
Here is what happened in Boise Real Estate in March: Closed sales (995) were up 10.9% versus 2019 while pending sales were off slightly- a possible precursor of things to come. The number of homes for sale dropped 7.9%, but this has been the trend for, literally, years in our market. Inventory remains very very tight with only 1.4 months of supply currently available and the average days on market is also very low at 45 days, a 13.5% drop from last March. Prices are not surprisingly continuing to rise by double digits. The average price per square foot was $195, a 12.1% annual increase and a new record high. The average sold price also set a new record at $424K (+13.7%). I could throw in something here about how those types of price increases are unsustainable given the current rate of wage growth and overall inflation, but I suspect that will be a moot point very soon.
SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR MARCH 2020
*Does not include manufactured homes **see detailed graphs below for more information.
|Type||# Sold||% +/-||% of Total Sold||# For Sale||% +/-||% of Total For Sale||$/SF||% +/-||Average Sold Price||% +/-||Days on Market||% +/-||Months Inventory|
Please feel free to contact me with your comments, questions and referrals. Stay well and stay safe!!
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702