Sales Take a COVID Hit But Prices Keep Rising
As expected sales in the Boise real estate market dropped sharply in May due to COVID related restrictions and hesitancy among Buyers. I use the word “hesitancy” rather than point to a lack of demand because I believe that Buyers are still looking to buy in the Boise real estate market but for various reasons mostly related to COVID, either were unable or unwilling to pull the trigger on a purchase in March and April. I believe that assuming that we continue on the slow path back to “normalcy” this will be short lived and the numbers in May would suggest that is the case. While closed sales for the month (895) dropped 29.1% from a year ago, pending sales were only off 2.1% which bodes well for June and July closings. Pending sales also were up 51.8% from April. Meanwhile the number of homes for sale in May was 2.8% lower than in 2019, which is actually a good showing in the inventory starved market that we have been in for the last several years. Speaking of which, despite the drop in closings, the average days on market has also been dropping and sits at a very low 27 days. This is a significant drop from the 45 days we saw in March (58 in January) and along with our current inventory, which sits at only 1.8 months, conforms that we remain in a very strong Seller’s market.
So it comes as no surprise that even with a sharp drop in closings, prices continue to flirt with and in some cases break records. The average price per square foot sits at $198 (+10.6% vs 2019), a new record, while the average sales price was $412K, the second highest on record after March at $424K. This was a 7.3% increase from a year ago and I would not be surprised to see this not only hit a new record again in the coming month’s but also return to the double digit annual percentage increases that have been the norm the last year or so. Demand remains strong and anecdotally I am hearing that bidding wars and above asking sale prices are back in force particularly in the lower price points. Many (myself included) expect a stronger than ever surge of in-migration in the coming month’s as more and more people flee the higher priced coasts where COVID and other factors continue to degrade the quality of life compared to Boise. The national picture isn’t quite as rosy but even experts like Windermere’s Chief Economist Matthew Gardner are not predicting prices to actually drop long term. His latest report indicates there may be a small short term drop in the next few months but that by year’s end prices on a nationwide scale will be back in plus territory.
SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR MAY 2020
*Does not include manufactured homes **see detailed graphs below for more information.
|Type||# Sold||% +/-||% of Total Sold||# For Sale||% +/-||% of Total For Sale||$/SF||% +/-||Average Sold Price||% +/-||Days on Market||% +/-||Months Inventory|
|Distressed (REO or Short Sale)||2||0||0.2||2||-33.3||0.1||$138||+181.6||$261K||+90.5||23||-81.9||1.0|
Please feel free to contact me with your questions and comments and above all stay well and be safe.
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702