Home Sales Rebound Sharply from 2 Month COVID-19 Slump
Homes sales in the Boise real estate market seem to be on a roller coaster. Sales were increasing moderately through March and then dropped sharply in April (-17.4%) and May (-29.1%) presumably due to COVID related factors. As the state gradually progressed through the re-opening process sales took off and while up a modest 3.6% in June, this represents a positive swing of over 30% in one month. But the bigger story is that while demand continues to be extremely strong, supply is critically low. We have been in a strong seller’s market with near record low inventory and market times for the last 2 years or so but in June the number of homes for sale dropped 36.7% versus a year ago. More homes sold in June (1237) than are currently for sale (1158) meaning that inventory is below one month—0.9 months to be exact. Looking back I could only find one other time in the last several years that inventory in the Boise real estate market has fallen below one month. This coupled with an average days on market of 33 days makes it very difficult for many buyers to find a home in the current market. As the number of COVID cases increases and some cities and possibly the state consider scaling back on re-opening plans it remains to be seen if sales will take another hit.
Prices have responded to the critically low supply as expected and were in record territory in June. Even during the 2 months that sales suffered due to COVID, prices continued to increase but in June the average price per square foot was up 12.5% versus 2019 tying the record set in May of $198/ square foot. The average sale price also increased sharply, rising 8.4% to $427K, a new record. While I have mentioned a looming affordability issue in our market in the past, in June affordability concerns did not hold the market back. There seem to be plenty of buyers with the ability to pay even as prices break new records almost every month.
SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR JUNE 2020
*Does not include manufactured homes **see detailed graphs below for more information.
|Type||# Sold||% +/-||% of Total Sold||# For Sale||% +/-||% of Total For Sale||$/SF||% +/-||Average Sold Price||% +/-||Days on Market||% +/-||Months Inventory|
|Distressed (REO or Short Sale)||1||0||0.1||1||-66.7||0.1||$139||-25.3||$265K||-8.3||30||+114.3||1.0|
I would expect some degree of volatility, at least on the volume side, to continue as we remain in uncharted territory with regards to COVID and the longer term economic impacts. If a recession as severe as is predicted does take hold one would assume that there will be some pressure on real estate prices in our market as well but based on past performance I can’t say that with any certainty. Stay well and be safe!
Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702