Lots Of Buyers But Very Little To Buy
What a difference 2 months make! In May the Boise real estate market looked like it was going to take a significant hit volume wise due to COVID-19. Sales were down 29.1% from the previous year and although predictions were that it would be a short slowdown, most felt that until the virus was under control the market would continue to be affected. In June with COVID-19 cases starting to edge up but restrictions on movement eased and most business re-opened things turned around and there was a modest 3.6% increase in closed sales. In July with cases surging in the Treasure Valley, the bars closed again, and a mask mandate in many areas, what did sales do? They shot up 23.1%. While at the same time inventory withered to unheard of lows pushing prices into record territory once again.
Despite an uncertain economic future, but aided by record low interest rates and a continued influx of out of state buyers who perceive Boise as a relative oasis from the pandemic and civil unrest that has occurred in many areas, the market is on fire. The only problem is there is literally almost nothing to buy. While 1509 homes sold in July there are only 924 for sale. At the current sales rate that means there is only .6 (six tenths) of one month of inventory, definitely a record low. Inventory (924 homes) was down 48.6% from a year ago and even new construction, which has been the saving grace for inventory in recent years, saw the number of homes for sale drop 49% to 365. As you might expect the situation is particularly dire for buyers in the lower price points. While there were only 56 homes under $300K for sale in Ada County last month, 221 sold which equates to .3 months of inventory. That means they are basically selling instantaneously. But sales under $300K were actually down 43.2% as a result of having no inventory while the higher price points fared better. Sales of homes between $300K and $500K were up 44.8%, while sales of all homes above $500K were up a whopping 92.3%.
Prices are responding accordingly and hit new records just about anyway you slice it. The average price per square foot in the Boise real estate market broke $200 for the first time hitting $201, a 13.6% increase from 2019. The average sales price meanwhile was $441K up 14.8%. These types of price increases only serve to confirm that we are heading for an affordability crisis to some degree as average incomes are not rising at anywhere near the same pace. The incredibly low interest rates have softened the blow somewhat, but at some point we are going to have to confront the issue of affordability in our market. And yes, there are lots of cash rich buyers from out of state fueling the flames. Don’t expect that to change anytime soon, I’m afraid.
SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR JULY 2020
*Does not include manufactured homes **see detailed graphs below for more information.
|Type||# Sold||% +/-||% of Total Sold||# For Sale||% +/-||% of Total For Sale||$/SF||% +/-||Average Sold Price||% +/-||Days on Market||% +/-||Months Inventory|
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Windermere Real Estate/Boise Valley
1412 W Idaho St.
Boise, ID 83702