Boise Real Estate Market Report for May 2020

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
All 895 -29.1 100 1585 -2.8 100 $198 +10.6 $412K +7.3 27 -20.6 1.8
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
New Construction 284 -26.8 31.7 813 +0.9 51.3 $201 +10.4 $456K +10.1 51 -26.1 2.9

 

Canyon County 410 -23.2 100 627 -6.3 100 $161 +9.5 $306K +15.0 31 -20.5 1.5

 

Please feel free to contact me with your questions and comments and above all 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 June 10, 2020 at 11:52 am
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , ,

Boise Real Estate Market Report For April 2020

COVID-19 Starts to Affect Boise Real Estate Market With More To Come. 

After a very strong March that was seemingly unaffected by the current global pandemic, the Boise real estate market shifted gears dramatically in April and I believe we can expect more to come.  How long these changes take to fully manifest themselves, how serious they are, and how long they last in the Boise market, which is otherwise still fundamentally solid, is the million dollar question.  After posting impressive numbers in March closed sales reversed course dramatically in April.  We went from 995 sales in March (+10.9% year over year) to 843 in April (-17.4%).  That is quite a swing for one month.  Furthermore typically sales tend to ramp up in the Spring peaking in June or July but this year sales in April dropped over 15% from March.  More ominous is the fact that pending sales, a good indicator of future sales trends, dropped 32.2% year over year.  And the number of homes for sale (1551) was up 3.9%, something we haven’t seen much of in the last several years, and while inventories remain extremely low by historical standards so far, they inched up in April.  We went from 1.4 months of inventory in March to 1.8 months in April.  Expect that number to rise even further in the coming months, but we have a long way to go before it would be considered high (6+ months).

Prices, not surprisingly, have not yet really responded to the dramatic slow down in sales.  It maybe 3-6 months before they catch up.  How much they drop, or at least slow down the rate of increase, will depend on if dropping buyer demand is the primary reason for the slowdown in sales or if other factors are in play. For now the price train keeps rolling…The average price per square foot was up 9.6% in April to $194.  This actually was a slight drop from the record of $195 in March but it is hard to say if that was COVID related or just a “normal” fluctuation.  Meanwhile the average sales price was up 10.2% to $409K.  This was also a drop from the $424K average in March but the March figure seems to have been a bit of an outlier when looking at the overall trends in the last 12 months.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR APRIL 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 843 -17.4 100 1551 +3.7 100 $194 +9.6 $409K +10.2 34 -24.4 1.8
Distressed (REO or Short Sale) 0 -100.0 0 3 +50.0 0.2 0 -100.0 0 -100.0 N/A N/A 0
New Construction 293 -17.5 34.8 820 +4.7 52.9 $195 +10.8 $444K +11.3 67 -22.1 2.8

 

Canyon County 497 +5.7 100 664 +10.1 100 $162 +12.5 $295K +8.9 36 +2.9 1.3

 

Back to the million dollar question.  While no one knows for sure how big a hit the Boise real estate market will take or how long it will last there are a few things we do know:

  1. Many Idahoans have lost their jobs either temporarily or permanently.  While many of these were in the service and retail industries, so not necessarily current homeowners or active buyers, there are still significant numbers of people who will struggle to make their mortgages or who have shelved their plans to buy because of the economic disruptions caused by the pandemic.  While there are some forbearance and/or mortgage relief programs in place we should expect default rates to rise.  Matthew Gardner, Windermere’s chief economist, recently reported on forbearance and provides some good info for those who aren’t very familiar with the term. With more defaults will come more short sales and REO sales, something we haven’t seen in recent years.  In fact I stopped including them in my report because they were basically non-existent after being as high as 50% of all sales during the Great Recession (2008-10). I added them back in this month to establish a baseline for the future.  As you can see above, we had exactly zero distressed sales in April.
  2. Both income disruptions for potential buyers and wavering consumer confidence will likely drive demand down at least temporarily. Some buyers will be forced to retreat from the market while others may not be comfortable taking on a mortgage until we see how things pan out. Current homeowners that were considering trading up may also tap the brakes.  On the flip side, in-migration could actually increase as COVID causes some in harder hit areas to pull the trigger on a move to Idaho, which at least so far has been relatively lightly affected. Also, if prices actually drop, expect some speculative buying by cash rich investors. And interest rates remain very low so even buyers that need to finance will find favorable terms with one major exception.
  3. For now Jumbo loans have dried up.  Many banks simply have stopped doing them while others have changed their underwriting on these types of loans to all but effectively stop doing them.  This will undoubtedly have an impact on the upper end of our market—basically everything over about $600K.
  4. This is not going to be a repeat of the Great Recession, of which the housing market was a root cause.  This disruption has nothing to do with housing although clearly it will affect housing.  Matthew Gardner, weighs in on this subject as well in another short video that you might find interesting.
  5. If we are able to continue the process of re-opening the economy that has already begun the disruption to the Boise real estate market should be relatively small and short lived because the foundation remains strong. That of course is a huge “if”. A second (or third) wave of infection that results in renewed shutdowns or a lengthier period of reduced or no income for many people will clearly have more significant impacts on housing.
  6. The construction industry locally has been relatively unaffected so far as construction was deemed “essential” and continued through the stay at home order.  There have been some supply stream and workforce disruptions none the less but overall nothing major yet.  However, some builders, anticipating at least a temporary drop in demand have paused and are being cautious about over building spec homes.  My guess is as soon as they feel the worst is over they will resume building at full steam ahead.Please feel free to contact me with questions and comments and 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 May 11, 2020 at 2:27 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 , , , , , , , , , , ,

Boise Real Estate Market Report for August 2019

Sales Slowdown Continues in August

The number of homes sold in Ada County dropped 10% in August versus a year ago to 1113 homes, continuing a trend that has been with us for almost a full year now. Year to date sales are off 2.5% and while supply continues to increase (+2.9% in August) I still believe the primary constraint on market volume is lack of affordable supply not lack of demand.  And while the average days on market was up 30.8% from a year ago it is still at only 34 days, just over half of the 60 days that is considered indicative of a stable market. At the current rate of sales there is only 1.6 months of available inventory, well into “Strong Seller’s Market” territory.

The key words in the last paragraph were “affordable supply”, because even as unit sales have dropped prices continue to increase steadily at a rate significantly higher than overall inflation.  Unfortunately prices are also still rising faster than average wage growth in our market and an “affordability crisis” is looming (or already here). The average price per square foot in August was $180, up 7.1%, while the average sales price jumped to a new record of $398K (+8.2%). For more and more buyers, especially first timers and/or Millennials, buying a home in Ada County is out of reach.  The net effect of this continues to be muted by the influx of cash rich out of state Buyers but as the markets where those Buyers tend to come from slow down, as they are doing,  we may see a further drop off in sales, that is more demand driven. As pointed out in one of my recent reports, the “sweet spot” for the market has moved up to around $350K.  That is already too high for many buyers who already live here.  With real estate prices rising 8-10% per year and wages only going up 3-4% there is bound to be fewer qualified buyers as time goes on.  Low interest rates have helped the situation but we can’t count on them to stay low forever, even though they have done so far longer than most experts predictions.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR AUGUST 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 1113 -10.0 100 1823 +2.9 100 $180 +7.1 $398K +8.2 34 +30.8 1.6
New Construction 320 +3.9 28.8 820 +2.6 45.0 $186 +6.3 $426K +1.9 57 +21.3 2.6

 

Canyon County 541 +5.7 100 764 +20.5 100 $152 +16.0 $285K +16.8 32 +23.1 1.4

 

One interesting note that would tend to support the theory that lack of affordability may be starting to have an adverse effect on sales in Ada County, is that in Canyon County, where prices are significantly lower, sales were up 5.7% ( as opposed to -10.0% in Ada County).  And not only were unit sales up but prices were way up.  The average price per square foot  ($152) was up 16.0% while the average sales price ($285K) was up 16.8%.  Compare those to Ada County where the numbers were 7.1% and 8.2% respectively, about half the rate in Canyon County.  Of course if prices keep going up at that rate it won’t be long before Canyon County has it’s own affordability crisis.

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

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 September 18, 2019 at 1:55 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , , ,

Boise Real Estate Market Report for July 2019

Volume Down But Prices Keep Rising 

It starting to sound all too familiar: In July closed sales in the Boise Real Estate Market were down but prices keep rising.  There were 1203 closed sales in Ada County last month a modest 1% drop from a year ago but as in recent months the issue seems to be a lack of inventory not a lack of demand.  Even though there were over 15% more homes available for sale, based on the current rate of sales this represents only 1.5 months of inventory. Homes that do come on the market are still selling quickly—the average days on market is 30, indicative of a strong Seller’s market.

Prices continue to reflect the strong demand even though actual unit volume has been flat or down for months.  The average price per square foot was $182 in July, up 9% from 2018 and a new record high.  Meanwhile the average sold price jumped 7% to $384K but was actually down from June’s record high of $395K.  I’m guessing a few high dollar sales may have skewed the data in June.  The good news is that while prices are still showing solid increases the percentage has dropped into the single digit range, which I believe is more “sustainable” than the 15-18% increases we have seen as recently as a year ago.  By “sustainable” I mean that when wage growth and overall inflation are considered the current real estate price increases don’t suggest we are headed for a bubble or that large chunks of potential buyers will get priced out of the market in the near future especially as long as interest rates stay low.  30 year fixed rates under 4% for conventional loans are the norm right now.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR JULY 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 1203 -1.0 100 1798 +15.1 100 $182 +9.0 $384K +7.0 30 +3.4 1.5
New Construction 300 +3.4 24.9 872 +27.9 48.5 $183 +6.4 $418K +3.5 62 -1.6 2.9

 

Canyon County 515 +2.0 100 715 +26.8 100 $149 +13.7 $277K +10.4 31 +10.7 1.4

 

For the short term I believe we can expect more of the same as the combination of low interest rates, a relatively strong local economy, and continued in-migration from generally higher priced markets will continue to drive demand and affordability, though under pressure from prices that have been rising steadily for over 7 years, is still good compared to other large metro areas in the West. For a look beyond Ada County at statewide trends please review the latest Gardner Report for Idaho in Quarter 2 as presented by Windermere Chief Economist Matthew Gardner. Please feel free to share your questions and comments.  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

 

Posted on August 7, 2019 at 3:19 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , ,

Boise Real Estate Market Report for April 2019

New Construction Drives Volume and Record High Prices

In the Boise real estate market, where overall volume has been generally declining for several months, new construction has provided a critical shot in the arm. Overall sales were actually up 3.5% in April for only the 3rd month in almost a year.  This is the result of a massive surge in homebuilding that saw new home sales increase by 54% in April compared to 2018.  If you back out new construction from the overall sales figures a different story emerges—sales of previously owned homes were down 12.2% in April. New construction accounted for 35.2% of all homes sold and 52.3% of all the homes for sale. Builders seem to be finding lots to build on in Ada County even with land prices at a premium. The primary focus of construction activity in Ada County is East (Barber Valley and Micron area) and South (Lake Hazel area) of downtown Boise with a smattering of in-fill projects in the West, NW, and on the Bench.

The number of homes for sale in the Boise market continues to rise, both new and pre-existing.  There were 1496 total homes listed in April (+16.9%) with 783 (+21.4) being new construction. Both days on market and months of inventory continue to be very low despite the increase in supply as there seems to be plenty of demand. While average days on market (46) actually jumped 35.3% from a year ago this is still well below the 60 days that is seen as “normal”. And based on the current rate of sales there is only 1.5 months of inventory available, indicating we are still in a very strong Seller’s Market.

Not surprisingly, prices hit new records again in April although the percentage gain has slowed somewhat but is still in double digits.  The average price per square foot jumped 10% to $176 while the average sales price was up 10.3% to $375K. Both of those numbers are new records.  Interestingly enough, even though new construction is driving volume in the market right now price trends for new construction are underperforming the overall market.  The average price per square foot of $176 was up only 3.5% from a year ago while the average sales price of $400K was actually down slightly (-0.2%) from 2018. This compares to gains of 12.7% and 12.8% respectively for the re-sale market. Also interesting, the average price per square foot of new homes ($176) was actually lower than that for re-sale homes ($177).  I can’t remember ever seeing that happen. It seems like builders are building homes in the market’s sweet spot which seems to be in the mid 300’s. Of course this data does not include any custom homes or build jobs that are not reported to the MLS, but of the listed homes the pricing gap between new and re-sale homes is as low as I can recall.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR APRIL 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 989 +3.5 100 1496 +16.9 100 $176 +10.0 $375K +10.3 46 +35.3 1.5
New Construction 348 +54.0 35.2 783 +21.4 52.3 $176 +3.5 $400K -0.2 87 +22.5 2.3

 

Canyon County 456 +5.3 100 603 +21.1 100 $144 +15.2 $272K +16.2 35 -14.6 1.3

 

With interest rates staying steady or even dropping slightly, continued in migration, and an overall healthy local job market expect more of the same in the coming months. The increase in supply has helped some buyers find a new home but rising prices and reduced affordability in relation to wage growth will continue to make it difficult for many buyers to keep from getting priced out of the market. Sellers continue to have most of the leverage in any negotiations.  Please feel free to contact me with your comments and questions.  Have a great summer!

 

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

208-258-2230 Fax

camjohnson@windermere.com

 

*All reports are published May 2019, based on data available at the end of April 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 May 15, 2019 at 10:55 am
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , ,

Boise Real Estate Market Report for March 2019

In Spite of Rising Supply Prices Hit New Record in March 

Good news and bad news for home buyers in the Boise Real Estate Market in March.  After years of record low inventory, supply has started to build, giving Buyers more choices. In spite of this and a recent trend of lower sales volume, prices continue to go up and reached new record highs in March thus reducing Buyer’s buying power.

There were 877 closed sales in March in Ada County a drop of 6.6% from a year ago. This continues a generally negative sales trend that began last July, after several years of increasing unit sales volume. Meanwhile, the number of homes for sale (1489) was up 20.4%, marking the 5th straight month of year over year increases and the 3rd month of double digit percentage increases in supply.  Inventory at 1.7 months based on the current rate of sales, is still below the 2 month threshold that the market has struggled to top in the last two years and while inventory is increasing we are still in what is considered a strong seller’s market. You may remember, 6 months of inventory is considered a stable market where buyers and sellers have roughly equal leverage in negotiations. We haven’t seen that much inventory in at least 5 years. The average days on market, reflecting higher supply and lower sales, has also been on the rise, and at 51 days is 15.9% above last March. This is approaching the 60 days that many consider indicative of a “stable” market.

Any additional leverage buyers may have gained in the last few months because of the rise in supply is not being reflected in prices so far. The average price per square foot in the Boise Real Estate Market jumped 11.5% to $174/sf, a new record high.  Similarly, the average sales price jumped to $375,000, a 10% increase over last year and also a new record high. The average sales price jumped $16,000 from February although this was probably the result of a handful of high dollar closings in March rather than a true reflection of the market. The only good news for buyers as far as pricing goes is that interest rates remain near historical lows and the consensus is that they will remain relatively stable for the remainder of this year.  Lenders also seem to be getting creative as far as offering new products that will help buyers getting squeezed by higher prices  find an acceptable alternative to a “vanilla” conventional loan. Fortunately we are not seeing a widespread return to the types of irresponsible lending that occurred during the 2004-2007 boom.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR MARCH 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 877 -6.6 100 1489 +20.4 100 $174 +11.5 $375K +10.0 51 +15.9 1.7
New Construction 325 +19.9 37.1 819 +19.7 55.0 $176 +10.7 $405K +10.4 87 +10.1 2.5

 

Canyon County 381 -11.6 100 615 +10.6 100 $137 +12.3 $253K +5.0 45 -11.8 1.6

 

New construction continues to drive the market even as supply of existing homes starts to tick up. While overall sales of homes were down 6.6%, sales of new homes surged 19.9% and represented 37.1% of all sales in March.  Supply is also rising with 819 new homes listed (+19.7%) representing 55% of all available homes for sale. Despite all the apartment building going on there seem to be plenty of buyers for new single family homes. As summer approaches expect new construction to continue to flourish.

Overall, buyers have more properties to choose from but continue to feel the pressure on affordability and buying power as strong demand causes prices to keep rising. Expect more of the same as 2019 rolls on although I do expect a gradual flattening in the price curve if the current trend towards higher supply and lower sales continues. With the spring and summer selling season kicking into gear things will continue to be challenging for buyers particularly in the under $300k segment of the market.  Please feel free to contact me with your comments and questions.

 

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

208-258-2230 Fax

camjohnson@windermere.com

Posted on April 13, 2019 at 10:15 am
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , ,

Boise Real Estate Market Report for January 2019

Double Digit Price Increases Despite Falling Sales and Rising Inventory  

In what is threatening to become a trend, in January the Boise real estate market witnessed the counterintuitive combination of sharply dropping sales, rising inventory and strong price increases.  Closed sales for the month (604) were off 8.8% versus 2018 and the number of homes for sale shot up 17.5% to 1494. At the current rate of sales this represents 2.5 months of inventory, still very low, but the highest in two years.  The average days on market at 51 was up 8.5%, also indicating the market is slowing somewhat. Given modestly rising interest rates, uncertainty over the effects of the tax “reform” passed in 2017 and relative lack of affordability caused by higher prices the slowdown is not a surprise.

Neither is the fact that prices are often slow to react to market shifts, but in this case the percentage increase in prices has remained in double digits despite several months of declining market volume.  In fact the average price per square foot in the Boise real estate market hit a new record high in January of $173, 13.1% above a year ago. Meanwhile the average sales price was up 11.7% to $363,000, the second highest ever. Most experts feel that gradually prices will fall more into step with market activity but it could take several more months.

In the meantime people are wondering if we are experiencing a price bubble.  Certainly double digit price increases in the face of dropping market volume and rising inventory are unsustainable but that doesn’t necessarily mean the bottom will drop out as it did in the last recession.  The foundation of the market is much more solid than it was then with stricter lending practices, a generally healthy economy and job market and continued in-migration to the Boise area. For another look at the outlook for Idaho, please review the latest report prepared by Windermere’s chief economist Matthew Gardner. As we all know real estate is local and while the general outlook for Boise is relatively strong despite the recent slowdown in sales, the national picture may be less rosy.  A recent article in Business Insider paints a much bleaker picture of doom and gloom for the housing and mortgage industries.  It is worth a read even if it doesn’t directly apply to our market.

 

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR JANUARY 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 604 -8.8 100 1494 +17.5 100 $173 +13.1 $363K +11.7 51 +8.5 2.5
New Construction 211 +20.6 34.9 955 +18.3 63.9 $178 +11.3 $414K +8.4 69 +9.5 4.5

 

Canyon County 273 -1.8 100 622 -0.3 100 $137 +20.2 $256K +15.3 50 +4.2 2.3

 

As mentioned last month, new construction continues to buck the trend and is in some ways the “saving grace” for the market right now. Despite the slowdown in the overall market sales of newly built homes (not including custom build jobs) surged 20.6% in January and represented almost 35% of all homes sold. The number of new homes for sale was also up sharply (+18.3%) and made up 63.9% of the total available inventory. Prices for new homes were increasing at a similar pace to existing homes.  The average price per square foot ($178) was up 11.3% while the average sales price was $414,000 up 8.4%.

While the current stats offer a glimmer of hope for buyer we remain in a strong seller’s market.  Even though the multiple offers and bidding wars are not as common as they were last summer buyers are still generally dealing with lower than average inventory and decreasing affordability in the face of ever increasing prices.  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

208-258-2230 Fax

camjohnson@windermere.com

Posted on February 14, 2019 at 3:46 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , ,

Boise Real Estate Market Report for December 2018

Sales Continue to Slide but Prices at Record Level 

The Boise Real Estate Market in December was marked by sharply falling sales and sharply rising prices.  An odd couple to say the least. December’s 14.8% decline was the fourth in the last five months and sales for the most recent quarter combined are off 10.5% versus last year. Also for the 2nd straight month, after literally years of declines, the number of homes for sale was up 5.7% and pending sales, an indicator of future market activity were off 5.1%. Normally this would be bad news for sellers and at some point this will likely be the case, but for now prices seem unaffected by the drop in sales and are at record or near record levels. The average price per square foot was up 17% to $172/sf., a new record.  Meanwhile the average sales price was $363,000 (+16% )second only to the $368,000 recorded in August.  Even as the trend of declining sales has deepened the rate at which prices are rising has accelerated.  In November the average price per square foot and average sales price were up 12.3% and 13.6% respectively.

Conventional wisdom would say that a drop in sales is somehow a result of a drop in demand and that at some point prices should reflect that.  Until recently though it seemed a lack of supply was the primary market force keeping sales in check.  The demand was there but there was nothing to buy.  Now although inventory is still very low by historical standards we are seeing the number of homes for sale rise compared to a year ago with no apparent effects on the upward march of prices…so far.  Current inventory based on the rates of homes selling stands at 2.2 months the highest in almost a year, while the average days on market is 41 a 4.7% decline from last year. As a reminder, 6 months of inventory and 60 days on market are widely seen as indicative of a stable or “neutral” market as far as how much leverage buyers and sellers have.  So we are still in a strong seller’s market despite the sharp drop in sales. Continued in migration, stabilizing interest rates, and a generally strong local economy and job market seem to be enough to keep the party going.

SUMMARY BOISE (ADA COUNTY) MARKET STATS FOR DECEMBER  2018

*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 750 -14.8 100 1640 +5.7 100 $172 +17.0 $363K +16.0 41 -4.7 2.2
New Construction 256 +11.3 34.1 1019 +14.0 62.1 $175 +10.1 $413K +9.0 57 +1.8 4.0

 

Canyon County 312 -9.0 100 641 -14.5 100 $136 +13.3 $250K +16.3 38 -9.5 2.1

One other area in the latest Boise real estate market numbers worth pointing out is the role of new construction in the current mix of homes for sale and being sold.  While overall sales were down 14.8%, sales of new homes ( not including custom build jobs) were up 11.3% and the number of new homes for sale jumped 14% versus last year. The 256 new homes sold in December was 34.1% of all homes sold while the 1019 new homes for sale represented 62.1% of all homes listed. Without new construction the market would be in serious trouble on the supply side.  For example, sales of pre-owned homes were off 24% in December and 10.5% for the most recent quarter.  This may be helping boost prices as newly constructed homes tend to be priced above the overall market average.  Currently the average price per square foot for new construction is $175 (vs $170 for re-sale homes), while the average sales price for a newly built home is $413,000 (vs. $337,000 for re-sale).

Based on what is happening in other markets around the country and predictions for a nationwide economic slowdown and possible recession in the coming months, I still believe that the current double digit price increases are unsustainable and we will see a gradual flattening of the price curve in the coming months.  Supply for the time being will likely stay pretty tight even with all the new construction occurring because there hasn’t been a strong enough trigger to get existing homeowners to sell.  Many who would like to sell and take a profit are worried that they won’t be able to find a replacement home that meets their needs and their budget.  Until sellers feel like they may be missing out on peak pricing if they don’t sell we will continue to see very few existing homes on the market compared to historical averages.

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

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

208-258-2230 Fax

camjohnson@windermere.com

Posted on January 15, 2019 at 3:03 pm
Cam Johnson | Category: Monthly Real Estate Market Reports | Tagged , , , , , , , , , ,