Fast-Moving Housing Market Continues to be Driven by Demand

Despite rising home prices, today’s housing market doesn’t have much else in common with the market we saw prior to the recession.

The Boise Region’s housing market is being driven by real home buyer demand, not speculation, which was common a decade ago. And as we’ve mentioned before, the increase in demand and lack of inventory has pushed up home prices.

The Boise Region’s housing market is being driven by home buyer demand, not speculation. Click To Tweet

That demand for housing can be seen in the data (real or speculative) by looking at the Days on Market.

Days on Market metric (or DOM) counts the average number of days between when a property was listed and when an offer was accepted.

For example, in Ada County, home sales that closed in September spent an average of 32 days on the market before going under contract, 23.8% faster than in September 2016.

DOM doesn’t factor in the time between accepting an offer and closing (which can vary based on the time it takes to complete home inspections, repairs, financing, etc.), so it is a good indicator of the demand for housing, and how quickly sellers find buyers.

DOM is seasonal, meaning homes generally go under contract faster in the spring and summer and slower in the fall and winter. To see the overall trend, we used a 12-month rolling average to remove seasonality. Based on those figures, DOM for Ada County has been trending down since 2009, and since 2014, DOM has been tracking closely with falling inventory.

September 2017 DOM Trends Ada County - web

DOM Chart

The very low DOM of 32 days on average, between February 2006 and January 2007, shows just how quickly buyers were snatching up homes, despite having plenty of inventory to choose from. In the past year or so we’ve experienced quite the opposite — low DOM and very low inventory.

September 2017 DOM Trends Canyon County - webPrior to the recession, Canyon County saw a similar trend with shorter average DOM despite plenty of inventory to meet demand. Since late 2013, DOM has been tracking closely with inventory, indicating increasing demand as inventory drops.

While that historical comparison is another helpful distinction between today’s market and the pre-recession market, it’s not much consolation for today’s buyers who are often required to make quick decisions because of limited inventory. Unless there is a sudden influx of inventory or a quick drop in demand, we expect the market to continue to move quickly, even if we see some slight increases in Days on Market through the winter.

Additional information about trends within each county, by price point, by existing and new construction, and by neighborhood, are now available in the September 2017 Market Report. This report includes an explanation of the metrics and notes on data sources and methodology.

Download the latest market snapshot graphics for Ada County and Canyon County:

ADA Snapshot - September 17CANYON Snapshot - September 17

 

 

 

 

 

 

 

 

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This report is provided Boise Regional REALTORS® (BRR). BRR is the largest local REALTOR® association in Idaho, with over 4,300 members and two wholly-owned subsidiaries — the Intermountain Multiple Listing Service, Inc. (IMLS) and the Boise Regional REALTORS® Foundation. This report is based primarily on the public statistics provided by the IMLS, available at: intermountainmls.com/Statistics/Static.aspx. These statistics are based upon information secured by the agent from the owner or their representative. The accuracy of this information, while deemed reliable, has not been verified and is not guaranteed. These statistics are not intended to represent the total number of properties sold in the counties or cities during the specified time period. The IMLS and BRR provide these statistics for purposes of general market analysis but make no representations as to past or future performance.  || The term “single-family homes” includes detached single-family homes with or without acreage, as classified in the IMLS. These numbers do not include activity for mobile homes, condominiums, townhomes, land, commercial, or multi-family properties (like apartment buildings). If you are a consumer, please contact a REALTOR® to get the most current and accurate information specific to your situation.

BRR Endorses City Council Candidates

Boise Regional REALTORS® (BRR) is pleased to announce the following candidate endorsements for city council races throughout Ada County.

Boise

  • Seat 2: Frank Walker
  • Seat 4: TJ Thomson
  • Seat 6: Holli Woodings

Meridian

  • Seat 2: Joe Borton
  • Seat 4: Treg Bernt
  • Seat 6: Josh Cummings

Star

  • Seat 3: Michael Keyes
  • Seat 4: David Hershey

Eagle

  • Miranda Gold and Robert Koellisch

Kuna

  • Richard Cardoza and Paul Schepper

Garden City

  • Elfreda Higgins and Jeff Souza

As real estate professionals, it’s our responsibility to engage in the political process by selecting candidates and supporting issues that protect homeownership access, private property rights, and promote economic growth. BRR’s endorsement process is thoughtful and deliberate in selecting candidates who best represent our industry and homeowners. The Public Policy Committee, comprised of REALTOR® and affiliate members with diverse backgrounds and political party affiliations, interviews candidates and determines the best recommendations for election endorsements.

Elections will be held on November 7, 2017. For information on the candidates, registration, and where to vote, please visit https://adacounty.id.gov/elections/. For information requests regarding these endorsements, please contact Soren Dorius, BRR Director of Government Affairs, at 208-947-7237 or soren@boirealtors.com.

Many thanks to BRR's Public Policy Committee for interviewing the candidates and making recommendations for support. Pictured: Chelsea Hough, Soren Dorius, Phil Mount, Steve Cox, Gail Hartnett, Susan Weaver, Julie DeLorenzo, and Jessica Perreault.

Many thanks to BRR’s Public Policy Committee for interviewing the candidates and making recommendations for support. Pictured top row: Chelsea Hough, Soren Dorius, Phil Mount, Steve Cox. Bottom row: Gail Hartnett, Susan Weaver, Julie DeLorenzo, and Jessica Perreault.

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Boise Regional REALTORS® (or BRR) represents more than 4,300 real estate professionals throughout the Boise region, providing resources to help members conduct their businesses professionally, ethically, and successfully. BRR has two wholly-owned subsidiaries, the Intermountain MLS and the Boise Regional REALTORS® Foundation. Visit boirealtors.com, intermountainmls.com, and boirealtors.com/realtor-foundation/ for more information.

2017 Annual Membership Meeting Recap

Thanks to everyone who attended BRR’s Annual Membership Meeting at JUMP on September 28, 2017! In case you missed it, here’s a recap of the day…

President Katrina Wehr started the morning by welcoming members, congratulating BRR Past President Carey Farmer on being named IR REALTOR® of the Year, sharing the many successes so far this year with a video, and recognizing our CEO, Breanna Vanstrom, in honor of Association Executive Appreciation Day.

Andy Enrico, BRR’s Bylaws Committee Chair, presented the proposed Bylaws changes which were unanimously approved by the membership. These changes will go into effect on January 1, 2018.

Gail Hartnett, BRR’s Nominating and Elections Committee Chair, and Katrina Wehr announced the winners of the 2018 Director Elections, as follows…

  • 2018 Vice President — Michelle Bailey
  • 2018-2019 Treasurer — Bob Van Allen
  • 2018-2020 BRR Director — Becky Enrico-Crum
  • 2018-2020 State Director — Krista Deacon
  • 2018-2020 National Director — Gail Hartnett

Our 2018 officers and newly elected Directors will begin their terms on January 1, 2018.

Below is a video of the BRR vote on the Bylaws changes and announcing the election results:

BRR Annual Membership Meeting Election Results and BylawsThis live stream is for informational purposes only. If you are not present, you will not be able to vote.

Posted by Boise Regional Realtors on Thursday, September 28, 2017

 

The morning wrapped up with a panel discussion on “Engaging Consumers Through Emerging Technologies” featuring Dave Conroy, R&D Engineer for NAR’s Center for REALTOR® Technology & CRT Labs; Dr. Anthony Ellertson, Director of the Games, Interactive Media and Mobile Technology Program at Boise State University; moderated by Eric Jensen, REALTOR® and Vice President of the Intermountain MLS.

 

2017AMM-6

Dave Conroy spoke about the importance of smart home tech and emphasized its importance to consumers, and shared resources from CRT Labs, like guides for understanding Smart Home devices and a Smart Home Checklist to help sellers reset devices.  Check out these links to learn more:

He also offered some smart home closing gift ideas:

Dave will be at the NAR Conference in Chicago, and he encouraged anyone who was attending to tour the CRT Labs while they are there.

Dr. Ellertson explained the difference between virtual reality and augmented reality, sharing that augmented reality is what will likely become more common in our day-to-day lives. He explained that the award-winning Virtual Nursing Simulation that his department developed, saved the nursing program thousands of dollars in nursing mannequin costs, was more flexible, and found to be just as effective as traditional training methods. His presentation also touched on the potential uses for beacons, Meta glasses, and other emerging devices.

The afternoon keynote speaker was REALTOR® Leigh Brown, whose presentation on the “Seven Deadly Sins of Real Estate,” had the audience constantly laughing, all while challenging REALTORS® to higher levels of professionalism, setting priorities, and putting their clients—and families—first.

2017AMM-35

The Annual Membership Meeting also featured roundtable discussions, networking, and a  Vendor Showcase featuring 29 companies!

Event Photo Gallery

It was a great day at JUMP that would not have been possible without the support of our vendors and sponsors. Special thanks to our event sponsors:

And finally, a big thank you to our Presenting Sponsor, Pillar To Post Home Inspectors — Greg Henke, Jeb Stogdell and Mark Uecker.

PillarToPost-Henke.Stogdell.Uecker

 

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Ada County Home Prices Reach New Record in August While the Pace of Growth Steadies

Three main factors continue to drive housing demand in Ada County — increased economic development, limited housing supply, and a growing population — resulting in a record high median sales price in August 2017 of $278,000, up 9.6% from a year ago.

Yet while the actual median sales price continues trending upwards, the rate at which it does so… Click To Tweet Think of it like driving your car up a hill: as the road gets steeper, the speed at which you drive decreases. You’re still gaining ground, just not as quickly.

MSP vs YOY Percent Change in Median Sales Price for Ada County

In January 2015, the Ada County real estate market began to see steadier, year-over-year price growth each month, at 7.9% on average through August 2017. Looking back to January 2012 (when the market recovery began) through December 2014, year-over-year price growth fluctuated each month at a much higher average of 13.2%.

These early fluctuations were closely tied to changes in mortgage interest rates.

Rising home prices are great for sellers and our economy overall, but eventually, can cause affordability concerns for buyers, even with low mortgage interest rates. Slowing price increases could be an early indicator of the market coming back into balance, but as long as consumer demand outpaces the number of homes for sale, that low supply vs. high demand relationship should keep actual prices moving up.

Canyon County is experiencing the same slowing price growth. From January 2012 to December 2014, the average monthly, year-over-year median sales price increase was 18.9%, compared to the average for January 2015 to August 2017 of 10.5%. The actual median sales price in Canyon County for August 2017 was not a new record, but it was up 11.0% from August 2016 to $183,000.

Additional information about trends within each county, by price point, by existing and new construction, and by neighborhood, are now available in the August 2017 Market Report. This report includes an explanation of the metrics and notes on data sources and methodology.

Market Report - August 2017_Page_03

Download the latest market snapshot graphics for Ada County and Canyon County:

ADA Snapshot - August 17

CANYON Snapshot - August 17

 

 

 

 

 

 

 

 

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This report is provided by the Ada County Association of REALTORS®, which began doing business as Boise Regional REALTORS® (BRR) in 2016. BRR is the largest local REALTOR® association in Idaho, with over 4,300 members and two wholly-owned subsidiaries — the Intermountain Multiple Listing Service, Inc. (IMLS) and the Boise Regional REALTORS® Foundation. This report is based primarily on the public statistics provided by the IMLS, available at: intermountainmls.com/Statistics/Static.aspx. These statistics are based upon information secured by the agent from the owner or their representative. The accuracy of this information, while deemed reliable, has not been verified and is not guaranteed. These statistics are not intended to represent the total number of properties sold in the counties or cities during the specified time period. The IMLS and BRR provide these statistics for purposes of general market analysis but make no representations as to past or future performance.  || The term “single-family homes” includes detached single-family homes with or without acreage, as classified in the IMLS. These numbers do not include activity for mobile homes, condominiums, townhomes, land, commercial, or multi-family properties (like apartment buildings). If you are a consumer, please contact a REALTOR® to get the most current and accurate information specific to your situation.

Ada and Canyon County Housing Inventory Down for 34 Consecutive Months

At Boise Regional REALTORS® (BRR), we feel like we’ve been talking about low inventory for months… and for good reason.

A few weeks ago, Zillow’s Chief Economist Svenja Gudell posted on Twitter: “Inventory down YoY for 25 consecutive months now. We’re just past 2-years into the #inventorycrisis.” While we never like when the term “crisis” is used to describe the housing market, the sentiment reflects the pressure that many home buyers are feeling caused by the low inventory levels, especially for existing homes.

Ada and Canyon County Housing Inventory Down for 34 Consecutive Months Click To Tweet

Gudell’s comments were based on nationwide trends, so what does this look like in the Boise Region?

Based on monthly data, inventory of existing homes in both Ada and Canyon counties has been down year-over-year for 34 consecutive months, starting October 2014. Let’s break this down by inventory (supply) and pending sales (demand)…

Metrics Ada Existing Canyon Existing
Oct-14 Jul-17 % Chg Oct-14 Jul-17 % Chg
Inventory (Supply) 1,702 1,238 -27.3% 886 600 -32.3%
Pending (Demand) 628 1,078 +71.7% 307 537 +76.6%
Months Supply of Inventory 3.2 1.4 -56.3% 3.3 1.5 -54.5%

 

Inventory of existing homes in Ada County was at 1,702 in October 2014 and 1,238 in July 2017, a decrease of 27.3%. In comparison, there were 628 pending sales in October 2014 versus 1,078 in July 2017, an increase of 71.7%. Pending sales are homes under contract that should close within 30-90 days.

Looking at months supply of existing inventory — which takes the number of homes for sale divided by the average number of sales by month — there were 3.2 months in October 2014 in Ada County to 1.4 months in July 2017, a drop of 56.3%. (A balanced market—not favoring buyers or sellers—is typically between 4-6 months supply of inventory.)

In Canyon County, inventory of existing homes was at 886 in October 2014 and 600 in July 2017, a decrease of 32.3%. In comparison, there were 307 pending sales in October 2014 versus 537 in July 2017, an increase of 76.6%. That put months supply of inventory at 3.3 months in October 2014 compared to 1.5 months in June 2017, a drop of 54.5%.

How has the decrease in supply and increase in demand influenced home prices in the Boise Region? The median sales price of existing homes in Ada County increased 34.2% between October 2014 and July 2017, and increased 42.2% in Canyon County during that same period, illustrating BRR’s familiar refrain of how home prices are being driven by demand compared to supply.

Additional information about trends within each county, by price point, by existing and new construction, and by neighborhood, are now available in the July 2017 Market Report. This report includes an explanation of the metrics and notes on data sources and methodology.

Download the latest market snapshot graphics for Ada County and Canyon County:

ADA Snapshot - July 17

CANYON Snapshot - July 17

 

 

 

 

 

 

 

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This report is provided by the Ada County Association of REALTORS®, which began doing business as Boise Regional REALTORS® (BRR) in 2016. BRR is the largest local REALTOR® association in Idaho, with over 4,000 members and two wholly-owned subsidiaries — the Intermountain Multiple Listing Service, Inc. (IMLS) and the Boise Regional REALTORS® Foundation. This report is based primarily on the public statistics provided by the IMLS, available at: intermountainmls.com/Statistics/Static.aspx. These statistics are based upon information secured by the agent from the owner or their representative. The accuracy of this information, while deemed reliable, has not been verified and is not guaranteed. These statistics are not intended to represent the total number of properties sold in the counties or cities during the specified time period. The IMLS and BRR provide these statistics for purposes of general market analysis but make no representations as to past or future performance.  || The term “single-family homes” includes detached single-family homes with or without acreage, as classified in the IMLS. These numbers do not include activity for mobile homes, condominiums, townhomes, land, commercial, or multi-family properties (like apartment buildings). If you are a consumer, please contact a REALTOR® to get the most current and accurate information specific to your situation.

2017 Mid-Year Housing Summit Recap


Thanks to everyone who attended the 2017 Mid-Year Housing Summit from Boise Regional REALTORS®. If you missed the event, don’t worry! A summary of the discussions and links to the various presentations are available here.

Highlights from the Treasure Valley Policy Survey

Vaughn-BRR presentation_image

Dr. Justin Vaughn, Co-Director of the Center for Idaho History & Politics at Boise State University, presented the highlights from the most recent Treasure Valley Policy Survey, which gauged opinions and perceptions of Treasure Valley residents on a variety of topics, such as living and working in the Treasure Valley, economic development, taxes, education, transportation, and housing.

 

Justin Vaughn

The survey was conducted in September 2016, and the key findings were that residents view life in the Treasure Valley very positively, especially the quality of life, citing it as a good place to raise a family and build a career. The top reasons for living here included low crime, low cost of living, and a strong economy. The survey also found that there is concern about the pace of growth, and divided attitudes among Treasure Valley residents about how to fund affordable housing. For more details on the survey’s findings, download Dr. Vaughn’s presentation.

2017 Mid-Year Residential Real Estate Update

Mid-Year Housing Summit 2017 UPDATED 07122017 - shareable_image

Boise Regional REALTORS® CEO Breanna Vanstrom presented the market update.

Market Update

The Mid-Year Summit is an opportunity to take a step back halfway through the year to evaluate how the market has performed, compared to the same time last year. You can view the slides here, watch a video captured via Facebook Live, or read a summary of Breanna’s presentation below…

BRR Market Update presented by BRR CEO Breanna Vanstrom

Posted by Boise Regional Realtors on Thursday, July 20, 2017

Ada County homes sales are on track to surpass the $3 billion-mark for the first time in 2017. Year-to-date through June 2017, the total dollar volume sold was at $1.46 billion, which was 7.4% higher than the same time last year. The total dollar volume sold Canyon County year-to-date through June 2017, was at $ 417.1 million, which was 14.7% higher than through June of 2016.

BRR’s message to members has been consistent this year and last year: “Our housing market is growing from consumer demand vs. supply — not from speculation as was common a decade ago.” In addition, increased sales prices for newly constructed homes have also been pushing up the total dollar volume figures in 2017.

Three things continue to drive demand for housing in the Boise Region: increased economic development, limited housing supply putting pressure on inventory, and a growing population.

Yet while the actual median sales price continues to trend upwards, based on these factors, the rate at which it is increasing has been slowing down. Year-over-year price gains grew consistently through 2012, led by low mortgage rates and more sales at higher price points.

While the actual median sales price for both counties continues to trend upwards, the rate at which it does so has been more balanced since January 2015. It is important to explain that this slowdown in growth does not mean demand is waning. In fact, year-over-year demand is up, and in just the past few months, the number of pending sales have outpaced inventory.

How does this level of demand vs. supply, increasing (but leveling) prices affect affordability?

The National Association of REALTORS® (NAR) Housing Affordability Index (HAI), and an index value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced existing home. An index above 100 signifies that a family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced existing home. The higher the number the more affordable homes are in comparison to the median income.

BRR replicated NAR’s formula using local data to calculate HAI for Ada County on an annual basis and compare it to NAR’s index for the country overall. In 2016, Ada County’s HAI was at 174.8, a decrease of 2.8% compared to 2015, but 4.5% higher than the U.S. overall.

Our market is still affordable when compared to the nation as well as the Western and Pacific Northwestern regions. Looking at NAR’s figures, based on metropolitan statistical areas (MSAs), the Boise City-Nampa MSA was more affordable than Salt Lake City, Denver, Portland, and Seattle, in 2016. For markets with similar populations, we were more affordable than Cape Coral, FL, Colorado Springs, CO, and Lakeland, FL, but less affordable than Winston-Salem, NC, Syracuse, NY, and Akron, OH.

Certainly, the local economies, demographics, and other factors of the markets cited affect affordability in each area, but the comparison is a helpful benchmark as Boise’s growing population is a driver of home prices relative to supply.

So what can REALTORS® do to help their clients in these current market conditions? Three things: strategic prospecting, strategic listing terms, and setting expectations.

REALTORS® can look to their prospects and databases to identify property owners who could sell but don’t also need to buy, or buy locally. For example, people relocating for retirement or work, investors looking to cash-out single-family properties; or, “default” landlords — people who retained a home after a move or another purchase because they couldn’t afford to sell it previously (either didn’t have the equity, needed a quick move, etc.) and have been holding that property as a rental.

To help prospective sellers nervous about listing their home and not being able to find a place to move, consider making the acceptance of a purchase offers contingent on the successful purchase of another home or completion of new construction, rent-back agreements, or maybe extended closing periods.

To help keep buyer and seller expectations in line with the market, here are a few tips:

  • REALTORS® can review market comps regularly, talking to sellers about price adjustments or changing terms, based on what has sold, to avoid buyer fatigue or disinterest if the home is on for “too long.”
  • Discuss the differences between offer prices and appraisals, and what to do when there’s a gap.
  • With home inspections, help sellers determine what should be fixed instead of moving on to another buyer who “might not ask them to fix” the repair in question. For buyers, if they ask for too many repairs or concessions, could they lose the house and have to start over?
  • Most importantly, know your market stats specific to your listings — it is not a seller’s market for everyone, so don’t over promise what you can deliver if you know days on market or supply of homes in a particular segment may not generate a quick sale or multiple offers.

Investing in Our Community Panel Discussion

2017 Housing Summit Flyer 7.5.2017 - panel discussion

The last presentation of the summit was a panel discussion featuring Clark Krause, Executive Director of Boise Valley Economic Partnership (BVEP); Georgia Meacham, REALTOR® and housing advocate; Jeff Sayer, Managing Partner at Rectify Horizons; and moderator Chase Craig, REALTOR® and Vice Chair for BRR’s Data Strategies Advisory Group.

The topic of the panel was “Investing in Our Community,” and the discussion focused on developments happening in our region and around the state, as well as resources from the National Association of REALTORS®. The panelists talked housing affordability, innovative ideas for affordable housing, cost of living, quality of education, and wages. They also touched on factors businesses consider when looking to relocate or expand to the Boise region. Two recurring themes in the discussion were talent and infrastructure. We need to invest in, and attract capital for, building infrastructure and educating our workforce, both of which are needed as we continue to grow.

How does this all relate to BRR members? REALTORS® may sell homes, but they also change their communities. Georgia encouraged REALTORS® to get involved at the local, state, and national association level, to participate in the association’s community outreach efforts, and to invest in RPAC (the REALTOR® Political Action Committee) to protect homeownership and the real estate industry.

Panel

Event Photo Gallery

Buyer Demand and New Construction Pricing Drive the Boise Region’s Home Prices to Record Highs

Ada County’s median sales price in June 2017 reached $273,950, an increase of 8.7% over June 2016. The median sales price in Canyon County reached $184,000 last month, an increase of 12.4% compared to last year. Both were record highs.

Three things continue to drive prices up in the Boise Region: consumer demand, lack of inventory, and higher-priced new construction — not market speculation as was common a decade ago.

To measure each of these market drivers, we took a deeper look at activity for pending sales, months supply of inventory, and the median sales price for new construction.

Pending Sales is a key indicator of consumer/homebuyer demand, counting the number of homes under contract that should close within 30-90 days. In June 2017, there were 1,854 pending sales in Ada County, up 7.5% from the previous year. In Canyon County, there were 750 pending sales, up 10.8% from the previous year. In both counties, the year-over-year increase in pending sales was primarily due to new construction as buyers are finding it harder to find existing inventory, especially in the lower price points.

Months Supply of Inventory (sometimes referred to as absorption rate or supply-demand ratio) takes the number of homes for sale divided by the average number of closed sales. A balanced market—not favoring buyers or sellers—is typically between 4-6 months of supply.

In June 2017, the months supply of inventory for existing/resale and new construction combined was at 1.7 months in Ada County, down 15.0% from June 2016. Canyon County was at 1.8 months of inventory in June 2017, down 18.2% from the previous year. Here’s how that breaks down by each segment and by price point:

MSI tables 062017

June’s market data is indicating a more balanced new construction market in Canyon County, at 4.4 months of supply, an increase of 4.8% from last year. Also, buyers who prefer an existing home may have more luck in Canyon County, especially if they’re looking to purchase at $300,000 or above.

Ada County’s inventory for both existing and new lags behind demand in all price points, with a few exceptions: existing or new construction homes priced over $700,000, and at least in June 2017, new construction priced $160-$199,999, primarily in Kuna and Garden City.

Median Sales Price is the price at which half the homes sold for more, and half sold for less. Because more newly constructed homes are selling at higher price points, it’s bringing up the overall median price in both counties.

In June 2017, the median sales price for new homes in Ada County was $345,450, up 14.3% over June 2016. Further, 20.3% more new homes sold in June 2017 than June 2016. In Canyon County, the median sales price for new homes was $239,495, up 6.8% compared to last year, and 33.3% more new homes sold year-over-year.

For comparison, existing home sales in Ada County were down 3.5% year-over-year (due to fewer homes being available to purchase), and the median sales price was at $255,000, up 6.3% over June 2016.  In Canyon County, existing home sales were up 8.9% and the median sales price was at $175,350, up 11.9% over June 2016.

Additional information about trends within each county, by price point, by existing and new construction, and by neighborhood, are now available in the June 2017 Market Report. This report includes an explanation of the metrics and notes on data sources and methodology.

Download the latest market snapshot graphics for Ada County and Canyon County:

ADA Snapshot - June 17CANYON Snapshot - Jun 17

 

 

 

 

 

 

 

# # #

This report is provided by the Ada County Association of REALTORS®, which began doing business as Boise Regional REALTORS® (BRR) in 2016. BRR is the largest local REALTOR® association in Idaho, with over 4,000 members and two wholly-owned subsidiaries — the Intermountain Multiple Listing Service, Inc. (IMLS) and the Boise Regional REALTORS® Foundation. This report is based primarily on the public statistics provided by the IMLS, available at: intermountainmls.com/Statistics/Static.aspx. These statistics are based upon information secured by the agent from the owner or their representative. The accuracy of this information, while deemed reliable, has not been verified and is not guaranteed. These statistics are not intended to represent the total number of properties sold in the counties or cities during the specified time period. The IMLS and BRR provide these statistics for purposes of general market analysis but make no representations as to past or future performance.  || The term “single-family homes” includes detached single-family homes with or without acreage, as classified in the IMLS. These numbers do not include activity for mobile homes, condominiums, townhomes, land, commercial, or multi-family properties (like apartment buildings). If you are a consumer, please contact a REALTOR® to get the most current and accurate information specific to your situation.

 

Fuel Your Business: Understanding Appraisals Recap

 

At the June Fuel Your Business Luncheon, Donna Jacobsen of Silvercreek Realty Group and Appraise It Now, Jon Nishikawa of 24 Hour Appraisals, and Eric Thornfeldt of Thornfeldt Appraisal Services, Inc., explained the appraisal process, shared their experiences and discussed how agents might help prepare their clients for the appraisal.

The following is a summary of the discussion in a Q&A format; the content has been edited for length and clarity.

You can also watch the Facebook Live recording of this event.

Are there different types of appraisals? How are they different?

There are various types of appraisals — appraisals for loans, or for collateral management. For example, some lenders do quick drive-by appraisals for home equity lines. There are also differences between commercial and residential appraisals. Appraisals can also be done for consulting, pricing, estates, and liquidation, etc., the differences are based on the intended use.

Most appraisals are for conventional, FHA, VA, purchases, and refinances. FHA requires an inspection.

A common misconception is that the value of a property is the price at which a seller is willing to sell. Keep in mind, that is not the figure the lender is asking the appraiser to determine. The lender needs to make certain the loan is secure, based on history and comparables. An agent simply saying, “the market is hot,” doesn’t cut it as a valid comparable.

The appraiser has a lockbox key and can let themselves into the property. Should the listing agent attend the appraisal?

The preference about meeting an appraiser at the property varies by appraiser. They do value an agent’s input and would like to see comparables (and info about the listing, like if there were multiple offers) PRIOR to the appraisal, do so either by meeting at the property, leaving info on the counter, or emailing it to them ahead of time.

Here are some tips if you do decide to meet for the appraisal:

  • Feel free to be there during the appraisal, just don’t hang out with them the entire time. It can be difficult to work quickly if the listing agent is there, talking a lot and/or trying to help with measurements.
  • Appraisers prefer if the listing agent (or an assistant) doesn’t tell them how to appraise a property.
  • Don’t rush the appraiser to finish because you need to leave, you don’t have to present through the whole process.
  • Allow them room to work and don’t distract them when they are trying to focus.
  • TIP: If the listing is vacant and you want the appraiser to contact you before going to the property, change the showing instructions to “See LA.”

What kind of information should real estate agents be providing the appraiser?

Confirm the final purchase price with the appraiser—they may not be aware of counter offers. They don’t appraise to contract price, but it’s good to let them know what the final price is.

Share your logic behind pricing with the appraiser as they don’t want to be “deal killers.”

Provide a list of improvements and/or upgrades. Providing good comparables and any inside information you know about comparables.  Once the appraisal is done, it isn’t likely to be changed. Provide your input upfront, not afterward.

How should agents prepare their clients – buyers and sellers – for the appraisal?

Appraisers aren’t there to inspect a home for cleanliness, but the nicer it is, the easier it is to appraise. Put away dogs, repair anything that’s damaged, pick up clutter, and flush toilets, to make it as presentable as possible. Remember, they will take pictures of all the rooms. If it’s an FHA loan, make sure there is access to the crawlspace and attic. Also for FHA, if the house was built before 1978, advise your seller to fix any peeling paint. Get rid of anything that could cause safety issues, for example, hazardous waste.

What is one thing you wish REALTORS® knew about appraisals?

Appraisers are looking for the most similar, recent, closest sales as comps. They are not trying to prove your purchase price. On pricing, Jon made this analogy, “It’s kinda like a murder scene, appraisers show up, look at the evidence and we come up with a suspect. Agents already have their suspect (or price) in mind, so they look at the evidence, and how to frame who they want to.”

Understand that appraisers have rules they must follow and forms they have to fill out. Forms are “interesting gadgets” that find a way to prove the value of the property, and they require a high comp, low comp, and one comp in between. If they can’t meet that requirement, something is wrong with the appraisal. Appraisers can’t arbitrarily use comparables. Properties need to have “similar utility.”

Price per square foot may be good for marketing but is useless for valuations. Pricing a house per square foot is as relevant as pricing cars per pound. No one is going to trade a white Hyundai for a white Lexus even though they are both the same color, have four doors, and go 65 mph.

When it comes to the appraisal results, keep in mind that the definition of “market value” for Fannie Mae appraisals is the most probable price, not the highest price, not the lowest price, not the purchase price. Lenders want to be sure they are secure with the asset.

What are the consequences for appraisers if they don’t accurately value a property?

If these appraisals hit a certain Risk Score, it goes back out into the field to another appraiser to be reviewed. If the reviewer finds that good comps weren’t used, it can be labeled as fraudulent and/or incompetent, and a discipline process can be started.

How much value do you give to a home with a view, a 2nd or 3rd bay garage, or and RV garage?

It depends. Appraisers use match paired analysis, where they compare the same properties. For example, if the exact same homes are compared and one has the 3rd bay and one doesn’t, and the one with the 3rd bay sells for $8,000 more, then the market says that 3rd bay is worth about $8,000.

There isn’t a set number. Appraising is part science and part art, and the art is learning how the market reacts to different features. For example, construction value is important on the high-end homes and isn’t as important to starter homes.

Should you disclose the appliances to be included in the RE-21, if it’s not on the MLS?

Appliances that are built-in are “fixtures” (with the exception being a stove, which is considered a fixture). Refrigerators, washers, and dryers are considered “personal property” since they can be removed. If someone takes a stove, the value is adjusted because that fixture isn’t included. FHA requires appraisers to state which appliances are included.

What are appraisers required to do now versus three years ago?

Appraisers are now required to take photos of every room, fill out additional forms showing market trends, etc., which has doubled the time it takes to do an appraisal. Forms have been standardized, and they are limited to certain descriptions and ratings that they can use. Appraisers are more micromanaged now than in the past.

What are your hurdles, now that you’re hired by a third party?

There is less pressure from lenders and agents, which is nice.

How much of a challenge is it to add closing costs to the sale price? Does it push on value?

Yes, it does. With FHA, when comparing two of the same homes, and the subject home does not have any concessions, the appraisal will come in $4,000 low. With conventional, it’s a little easier. Just because you up the price for concessions, it doesn’t mean that the appraiser can value it higher. It does make it a riskier loan, and the bank will be sensitive to the value. It’s important to report concessions.

Do you ever look at previous appraisals on a property?

No.

What can a homeowner do to their yard to increase the value the most?

Curb appeal and landscaping helps marketability but doesn’t necessarily impact the value, since landscaping is a personal preference. However, sprinkler systems do add value. A really nice paver system and outdoor kitchen may be considered in reconciling final value, but not as a line item adjustment.

Are the fees for appraisals changing?

Nationally, our area is still inexpensive when it comes to appraisals. In Portland, they are paying $1,200 for an appraisal if they want to get it back in two weeks. For a standard appraisal in our area, the range is about $375-$600.  VA is changing the appraisal fee to $600 on July 1, 2017.

If an agent has an appraisal come in low and knows of another comp that will close in the next few days, is there a reconsideration of the value that can be done with that comp closing?

If you’d like the appraisal to be reconsidered, the first thing you can do is read the appraisal. Look for mistakes — if there is a mistake, the odds are much better that you’ll get a reconsideration. Your comps need to be a good alternative to the comps the appraiser used.

They value the property based on the date of the appraisal. If you know a deal like that is coming up, tell the appraiser before, so they can deal with it.

They are required to use three to four comps on sold, one or so on active, and one or so for pending. FHA is now asking for two actives and two pendings.

At what point does a square footage discrepancy (between public record and what the appraiser measures) impact value?

Don’t rely on public records for square footage, assessors often get the square footage wrong. Measure your listing yourself and then correct the square footage in the MLS.

Any discrepancy from +/-50-100 square feet will make an adjustment, or if it’s a very large home, a difference of +/-200 square feet will be an adjustment to value. When looking for comps, look for ranges in square feet above and below the listed size.

 

Sellers Take Note: No Signs of a Slow Down in Summer Home Sales

In May 2017, the average Days on Market (the cumulative number of days between when a property is listed and when it goes pending) for homes in Ada County was at 33 days and Canyon County was at 36 days. Factor in an additional 30-60 days to close and homes listed in the upcoming weeks may sell at some of the highest prices of the year. Based on monthly averages going back to 2004, homes that close in June, July, and August typically fetch the highest prices.

While inventory of existing homes is still tight in both counties compared to last year (down 15.3% in Ada County and down 20.6% in Canyon County compared to May 2016), there have been month-over-month improvements in the number of existing homes for sale, as more sellers hope to secure a summer closing.

  • February to March 2017, existing inventory grew by 8.8% in Ada County and by 23.2% in Canyon County
  • March to April 2017, existing inventory grew by 19.8% in Ada County and by 4.7% in Canyon County
  • April to May 2017, existing inventory grew by 25.3% in Ada County and by 14.2% in Canyon County

These inventory numbers are encouraging but more existing homes — especially priced under $300,000 — are needed to keep up with buyer demand.

The low inventory combined with the rate of pending sales resulted in an 11.8% year-over-year decrease in months supply of existing homes for sale in Ada County, ending at just 1.5 months of inventory. In Canyon County, the months supply of existing inventory was at 1.3 months in May 2017, down 23.5% year-over-year. (A balanced market is typically between 4-6 months of supply.)

Demand for new homes remained strong as this segment saw a 23.8% year-over-year increase in pending sales in Ada County and 20.1% in Canyon County. The months supply of new inventory was at 3.8 months and 4.2 months for Ada and Canyon counties, respectively, as of May 2017.

Additional information about trends within each county, by price point, by existing and new construction, and by neighborhood, are now available in the May 2017 Market Report. This report includes an explanation of the metrics and notes on data sources and methodology.

Download the latest market snapshot graphics for Ada County and Canyon County:

ADA Snapshot - May 17CANYON Snapshot - May 17

 

 

 

 

 

 

 

 

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This report is provided by the Ada County Association of REALTORS®, which began doing business as Boise Regional REALTORS® (BRR) in 2016. BRR is the largest local REALTOR® association in Idaho, with over 4,000 members and two wholly-owned subsidiaries — the Intermountain Multiple Listing Service, Inc. (IMLS) and the Boise Regional REALTORS® Foundation. This report is based primarily on the public statistics provided by the IMLS, available at: intermountainmls.com/Statistics/Static.aspx. These statistics are based upon information secured by the agent from the owner or their representative. The accuracy of this information, while deemed reliable, has not been verified and is not guaranteed. These statistics are not intended to represent the total number of properties sold in the counties or cities during the specified time period. The IMLS and BRR provide these statistics for purposes of general market analysis but make no representations as to past or future performance.  || The term “single-family homes” includes detached single-family homes with or without acreage, as classified in the IMLS. These numbers do not include activity for mobile homes, condominiums, townhomes, land, commercial, or multi-family properties (like apartment buildings). If you are a consumer, please contact a REALTOR® to get the most current and accurate information specific to your situation.

Are You Affected by the 2017 Spring Flooding in Ada County? Could You Be?

2017 Spring Flooding Slider

We’ve compiled some resources to help you keep track of river levels and locate sandbags and shelter areas if needed:

Flood tips from the American Red Cross of Greater Idaho:

Heed Flood Warnings:

Listen to your local radio and TV stations for updated flood information. A flood WATCH means flooding or flash flooding is possible in your area. A food WARNING means flooding or flash flooding is already occurring or will occur soon in your area. When a flood or flash flood warning is issued for your area, head for higher ground immediately and stay there.

Stay away from flood waters:

If you come upon a flowing stream where water is above your ankle or if you come across a flooded road while driving, stop, turn around and go another way. If you are caught on a flooded road and waters are rising rapidly around you, get out of the car quickly and move to higher ground.

Share preparedness tips with every member of your household. The best protection is to be prepared.

Advocacy Efforts:

Leaders from Boise Regional REALTORS® (BRR) joined more than 9,600 REALTORS® from around the country in Washington, D.C. last month, to advance key real estate issues on behalf of current and future homeowners during the National Association of REALTORS® (NAR) 2017 REALTOR® Legislative Meetings.

BRR leaders met with Idaho Senators Crapo and Risch, and Representatives Labrador and Simpson on Capitol Hill to discuss the reauthorization of the NFIP, as well as the importance of protecting the mortgage interest deduction and 1031 tax-deferred exchanges. These kinds of programs and incentives are essential tools for sustainable homeownership.

troubled waters