Boise Real Estate Market Report For September 2020

As Prices Skyrocket Affordability Becomes Bigger Concern 

Record low inventory and very high demand continued to send Boise real estate prices soaring in September with no short term changes in sight.  But affordability is also suffering and may spell trouble down the road.  Closed sales in the Boise real estate market in September (1307) were up 34.3% vs September 2019 while the number of homes for sale was almost 70% lower than at this time last year.  Average days on market dropped to a record low of 26 days and based on the current rate of sales we have just 0.4 months of inventory.  While new construction sales were up 41.6% this was not enough to significantly relieve the pressure on inventory, although if you exclude new construction the average days on market drops to 16 and the available inventory is only 0.3 months.  To put it in perspective average days on market of 60 days and 4-6 months of inventory is considered a stable market. No matter how you slice it we are in an unprecedented seller’s market. Another example of this was highlighted in an article in The Idaho Statesman earlier this week describing how desperate buyers are forgoing home inspections and appraisal contingencies in order to compete with multiple offers on virtually every house available. Both these strategies carry enormous risk for buyers—risks they are forced to take to be successful in the current market.

The average price per square foot jumped 15.2% to a record high $212 while the average sales price jumped 19% year over year to $470K, also a record.  The combination of record low interest rates and an continued influx of cash rich out of state buyers has kept demand very high despite the lack of inventory.  A couple of factors may be discouraging existing homeowners from selling exacerbating the inventory shortage.  First with record low interest rates, many existing homeowners have been able to re-finance and drop their rates 25% or more and have chosen to do so rather than sell.  Also many homeowners (myself included) have come to realize that with prices as high as they are they literally couldn’t afford to by a comparable home in the market today, let alone trade up.  Even those looking to downsize are finding that their options are both few and more expensive than they can afford. As Windermere’s Chief Economist Matthew Gardner warns in a recent report, this may be leading us closer to an affordability crisis.  In the Boise real estate market, this is already starting to happen.  As shown above, the average sales price is up 19% in the last year while wages are growing in the 3-4% range.  While this doesn’t necessarily affect cash buyers, it is putting the pinch on those buyers trying to qualify for a mortgage.  If they can’t afford to pay more they look for other ways to stay in the game like waiving contingencies ,as mentioned above. Matthew also points out that if interest rates begin to rise (they can’t go much lower) then the buying power of those seeking financing will diminish even more quickly.  He says a rate increase of 1% roughly equates to a 10% drop in the price a typical buyer can afford.  As long as the rates stay low and there are lots of cash buyers out there the demand for homes in our market may not be affected that much but when rates inevitably rise we may see a real shift in the market dynamics.  Something to keep an eye out for—similar to a bubble but with different root causes than the one we saw in 2006-2007. Of course, other “macro” factors such as COVID may also have an impact but as we saw this spring, at least in our market, the initial reaction to the pandemic was no more than a short lived blip on the radar.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR SEPTEMBER 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
All 1307 +34.3 100 573 -69.2 100 $212 +15.2 $470K +19.0 26 -27.8 0.4
New Construction 395 +41.6 30.2 338 -63.1 60.0 $204 +9.7 $458 +8.3 50 -18.0 0.9

 

Canyon County 563 +19.5 100 199 -77.5 100 $171 +15.5 $343K +21.6 24 -20.0 0.4

 

Please feel free to contact me with your questions and comments and thanks for reading! 

Cam Johnson

Realtor®

Windermere Real Estate/Boise Valley

1412 W Idaho St.

Suite 120

Boise, ID 83702

208-258-2222 Office

208-283-3664 Cell

camjohnson@windermere.com

http://IdahoWindermere.com

Posted on October 14, 2020 at 1:10 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , , ,

Boise Real Estate Market Report for June 2020

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
All 1237 +3.6 100 1158 -36.7 100 $198 +12.5 $427K +8.4 33 0 0.9
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
New Construction 376 +24.9 30.4 638 -26.6 55.1 $198 +7.6 $466K +8.4 64 -7.2 1.7

 

Canyon County 568 +7.8 100 457 -38.7 100 $165 +15.4 $317K +15.7 33 0 0.8

 

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! 

Cam Johnson

Realtor®

Windermere Real Estate/Boise Valley

1412 W Idaho St.

Suite 120

Boise, ID 83702

208-258-2222 Office

208-283-3664 Cell

camjohnson@windermere.com

http://IdahoWindermere.com

Posted on July 10, 2020 at 1:56 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , ,

Boise Real Estate Market Report for January 2020

Boise Real Estate Volume and Prices Both Sizzle in January 

You probably have already seen the headlines in the local media about home prices reaching a new record high in January. While it makes for good headlines and is no doubt true, is it really news? Not if you have been following the market either with or without the help of this report.  Our market bottomed out from the Great Recession approximately 9 years ago and since the 2nd quarter of 2011 has seen steadily climbing prices and strong volume.  While I don’t recall the exact month where we not only eclipsed the high price points from the previous boom but also set a new record, suffice it to say it was years ago—2017 or 2018.  Since then the market has continued to grow and prices have continued to go up steadily, meaning that with very few exceptions we reach a new record high for prices every month. Noteworthy but hardly breaking news.  The real headlines will come when we see a month when prices actually drop.  Well, if January is any indication, we may be waiting awhile for that to happen.

The average sold price for Boise real estate in January was $405,000 a 12.2% increase from 2019 and a new record, don’t you know! Meanwhile the average price per square foot rose 7.5% to $186 (actually not a record—it was $191 in December). And volume, which in most of 2019 seem to be constrained by a dearth of available existing homes for sale, surged 25.4% ahead of last January with 780 homes sold.  New construction led the charge with 308 homes sold (+41.3%) and represented 39.5% of all homes sold and 66.7% of all homes for sale. Inventory continues to be extremely low at 1.6 months although the average days on market (58) is actually 16% higher than last January. The trends in Canyon County are fairly similar.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR JANUARY 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
All 780 +25.4 100 1221 -18.3 100 $186 +7.5 $406K +12.2 58 +16.0 1.6
New Construction 308 +41.3 39.5 815 -14.7 66.7 $193 +7.8 $444K +7.5 84 +25.4 2.6

 

Canyon County 337 +17.8 100 695 +11.7 100 $152 +10.9 $290K +13.3 48 +2.0 2.1

On January 30 Windermere was honored to host our Chief Economist, Matthew Gardner, who in what has become an annual event,  gave an excellent presentation on the Economic and Housing Outlook for 2020 both for the nation and the local market.  While he had lots of positive things to say about our local economy and housing market he also cautioned that affordability is becoming a real problem.  Those of you who follow this report know that I have expressed my concerns about affordability for well over a year and Matthew’s data serves to emphasize this issue.  His slides are very informative and I am happy to share them in PDF form with anyone who is interested.  The file is rather large so I am not including it here since many email servers limit the size allowed, but if you would like to see his presentation slides please contact me and I will arrange to get them to you.  Another look at affordability from the 30,000 foot level and not just related to housing can be found in this recent article in the Atlantic.  It argues that in what is hailed by some as the best US Economy in decades American families continue to be bled dry and it is only the corporations and the super wealthy that are truly benefitting.  So much for trickle down economics!

Please feel free to contact me with your questions and comments. 

Cam Johnson

Realtor®

Windermere Real Estate/Boise Valley

1412 W Idaho St.

Suite 120

Boise, ID 83702

208-258-2222 Office

208-283-3664 Cell

camjohnson@windermere.com

Posted on February 18, 2020 at 12:25 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , , ,

Boise Real Estate Market Report for November 2019

Volume Up Slightly While Prices Surge By Double Digits 

Overall the number of closed sales was up 1.3% in November in the Boise real estate market with new construction leading the way. Of the 935 closed sales 304 (32.5%) were new construction.   Sales of new homes rose 19.2% for the month while sales of previously owned homes dropped by 5.5%.  This continues to be a function of lack of available inventory not lack of demand.  While inventories were starting to creep up slightly in the last few months, in November the number of homes for sale (1642) was down 11.7% from a year ago and also down about 12% from October. Fall and winter tend to be much slower than the summer months but the drop in numbers year over year indicates we definitely are not out of the woods yet as far as low inventories go. The average days on market of 42, while 20% higher than last November still is very low for this time of year and we are still in the “Strong Seller’s Market” range as far as inventory goes with only 1.8 months available based on the current rate of sales.

Prices have been rising since 2011 but in recent months the rate of increase had dropped into the mid to high single digits.  Not so in November when the average price per square foot rose 11.4% to $186 and the average sales price rose 15.7% to $404,000.  Both of those are, not surprisingly, new record highs.  The double whammy of low inventory and rapidly rising prices continues to put the pinch on potential buyers more and more of whom are either being priced out or are frustrated to the point of giving up and seeking alternative housing.  The means renting for many and moving in with family for some.  Were it not for the fact that interest rates continue to hover under 4% this “crisis” would be even more acute.  That time may come sooner than we think, although Windermere Chief Economist Matthew Gardner believes only modest increases in interest rates are on the horizon.  He recently published his Economic and Real Estate Outlook for 2020 in the form of a short video.  It is worth a listen and is packed with good information, plus his accent is so cute! Matthew is coming to Boise on January 30 at 10:00 am for a presentation at JUMP on the Idaho economy and real estate market.  In the past these have been very informative and well attended.  If you are interested in going please let me know.  Admission is free but seating is limited and a ticket is required.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR NOVEMBER 2019

*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
All 935 +1.3 100 1642 -11.7 100 $186 +11.4 $404K +15.8 42 +20.0 1.8
New Construction 304 +19.2 32.5 922 -8.7 56.2 $194 +12.1 $455K +13.5 62 +29.2 3.0

 

Canyon County 380 -5.2 100 860 +19.8 100 $153 +10.9 $284K +15.0 35 +20.7 2.3

Please feel free to contact me with any questions or comments or if you know someone who would like to receive this report once a month.  Special thanks to those that have referred friends and family this year.  Referrals are the highest compliment I can receive and I really appreciate them! Best wishes for the Holidays and for a thriving 2020! 

Cam Johnson

Realtor®

Windermere Real Estate/Boise Valley

1412 W Idaho St.

Suite 120

Boise, ID 83702

208-258-2222 Office

208-283-3664 Cell

camjohnson@windermere.com

http://IdahoWindermere.com

 

*All reports are published December 2019, based on data available at the end of November 2019, except for the today stats. All reports presented are based on data supplied by the Intermountain MLS. Intermountain MLS does not guarantee or is not in anyway responsible for its accuracy. Data maintained by the Intermountain MLS may not reflect all real estate activities in the market. Information deemed reliable but not guaranteed
Posted on December 14, 2019 at 1:46 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , ,

Boise Real Estate Market Report for October 2019

Ada County on Simmer While Canyon County Heats Up 

The Boise real estate market in October for the most part stayed true to recent trends—sales flat to slightly down while prices continue to rise.  In Ada County closed sales were off 2.1% from October 2018 although they were up 9.2% from September 2019. New construction is bucking that trend and sales were up 8.6% to 317 last month. The overall average days on market did take a jump to 41 days (+32.3%) but the months of available inventory remains critically low at 1.8. Prices meanwhile continue to go up at near a double digit pace.  The average price per square foot in October was $184, up 8.2% and a new record, while the average sold price jumped 9.9% to $390K.

A lot has been said about a looming affordability crisis in the Boise real estate market, and one symptom of that is evident in comparing Ada and Canyon County.  Buyers seeking more affordable options seem to be finding them in Nampa, Caldwell, and Middleton. While sales in relatively more expensive Ada County are flat to down, in Canyon County, where the average price of a home is over $100K lower, sales are showing a moderate gain– up 3.7%.  And prices in Canyon County are skyrocketing which may eventually narrow the gap. The average price per square foot in Canyon County was $153 in October (also a new record) and was 15.9% higher than last year.  Similarly, the average sold price jumped 18.8% to $285K.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR OCTOBER 2019

*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
All 1056 -2.1 100 1865 -1.7 100 $184 +8.2 $390K +9.9 41 +32.3 1.8
New Construction 317 +8.6 30.0 981 +4.5 52.6 $190 +6.7 $433K +5.1 67 +45.7 3.1

 

Canyon County 452 +3.7 100 898 +16.9 100 $153 +15.9 $285K +18.8 34 +21.4 2.0

 

Expect the current trends to continue in the short term with the usual seasonal drop off that occurs each winter.  With interest rates still low, a generally strong economy, and a steady supply of people moving to Idaho we continue to be able to kick the affordability can down the road.  At some point it may reach somewhat of a “breaking point” and the market may need to correct itself but for now that doesn’t seem to be happening.  Please feel free to contact me with your questions and comments.  

Cam Johnson

Realtor®

Windermere Real Estate/Boise Valley

1412 W Idaho St.

Suite 120

Boise, ID 83702

208-258-2222 Office

208-283-3664 Cell

camjohnson@windermere.com

http://IdahoWindermere.com

Posted on November 8, 2019 at 12:47 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , , ,

Boise Real Estate Market Report for September 2019

Homes Sales Up Slightly in September But There’s A Catch… 

The number of closed sales in the Boise real estate market was up slightly in September versus a year ago, seemingly bucking the recent trend of declining sales.  There were 967 closed sales in Ada County (+0.9% vs 2018) but looking back also reveals that September 2018 was a particularly slow month bracketed by relatively strong sales in both August and October.  Looking at the results on a quarterly basis provides a more realistic view of the market in this case and sales for the most recent 3 months are off 2.5% year to year.  Also telling is the fact that sales from August to September of this year dropped 14.5%, although much of that can be attributed to the normal seasonal drop off in sales heading into fall.  Inventory continues to be near historic lows at 1.9 months while the average days on market is up 5.9% to 36, also still near historic lows.

Several people have asked why I pay so much attention to sales trends when all they really care about are price trends.  “Is my house going up in value or going down?”  “As a buyer am I going to pay less if I buy now or wait?” are the most common questions I hear.  Well, typically prices are influenced by supply and demand and market trends in those areas generally are good predictors of future pricing trends.  Prices tend to lag somewhat in real estate, so a drop in sales (demand) and/or an increase in inventory (supply) may not be reflected in sales prices for several months.  For example,  Boise real estate has been slowing volume wise for most of this year but prices continue to rise much faster than is sustainable. The rate has dropped off somewhat from the scorching 15%+ annual increases we saw in 2016-18 but we are still flirting with double digit increases now even as volume is flat to down.  In September the average price per square foot in the Boise market was $180, up 7.8% and tied for the record high set last month.  The average sale price meanwhile was up 13.2% to $395,000 or $46,000 higher than one year ago. The obvious conclusion here is that demand is not the problem, the supply of available homes, especially “affordable” ones, continues to be the biggest barrier to market sales growth.  The average list price of homes for sale in the Boise real estate market is currently $504,000– not affordable for most buyers.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR SEPTEMBER 2019

*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
All 967 +0.9 100 1858 -4.4 100 $180 +7.8 $395K +13.2 36 +5.9 1.9
New Construction 278 +9.9 28.7 915 +3.9 49.2 $186 +7.5 $423K +6.8 61 -1.6 3.3

 

Canyon County 471 +20.8 100 884 +17.4 100 $147 +7.3 $282K +11.0 30 +20.0 1.9

 

Barring any unexpected macro-economic or political changes I believe we can expect more of the same in the Boise real estate market in the near future.  Continued in-migration (not just from California!), a relatively strong economy, and very low interest rates will continue to drive the demand side while our struggles with adequate supply of affordable options for buyers will also likely continue. New construction continues to outperform the market as a whole but don’t necessarily help the affordability issue as the price points on newly built homes are typical higher than for resale.  Please feel free to contact me with any comments or questions.

Mark your calendars!

Windermere is fortunate to be able to bring our Chief Economist, Matthew Gardner, to Boise for the 3rd year in a row to give a presentation on the Idaho Economic and Real Estate Outlook for 2020.  He will be speaking at JUMP! On January 30th.  I will have a limited number of tickets for those that contact me. Corporate sponsorships are also available for reserving tables. In the past this has been a great event! Please let me know if you are interested in attending. 

Cam Johnson

Realtor®

Windermere Real Estate/Boise Valley

1412 W Idaho St.

Suite 120

Boise, ID 83702

208-258-2222 Office

208-283-3664 Cell

camjohnson@windermere.com

Posted on October 9, 2019 at 2:33 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , , , ,