May 2018 Market Report

ADA COUNTY HOME SALES REACHED RECORD $404 MILLION IN MAY;
DRIVEN BY INCREASE IN NEW CONSTRUCTION CLOSINGS

Key Takeaways:

  • The total sales dollar volume of all residential real estate sold in Ada County in May 2018 exceeded $400 million for the first time ever in a month, based on data going back to 2005. The previous high point was $371 million in June 2017.
  • This jump in dollar volume was driven by a 60% increase in the number of newly constructed homes that sold compared to May 2017, along with an 8.7% bump in the median sales price — reflecting increasing costs of land, labor, and construction materials.
  • Existing home sales were up just 2% from last year, but persistently low inventory pushed existing home prices up 16.1%, which further contributed to the record sales volume.

Analysis:

The total sales dollar volume of all residential real estate sold in Ada County last month was at the highest level ever in a month (based on data going back to 2005), reaching $404.4 million, an increase of 30.5% over May 2017. The previous high point was in June 2017 at $371.1 million.

May’s jump in volume was driven by a 60.1% increase in the number of new homes that sold compared to May 2017, along with an 8.7% year-over-year bump in the median sales price.

Existing home sales were up just 2% from last year, but persistently low inventory and high buyer demand pushed existing home prices up 16.4%, which further contributed to the record sales volume.

Here’s a closer look at the numbers in total and by market segment:

 

May 18 Ada County Volume Overall

May 18 Ada County Volume New Construction

May 18 Ada County Volume Existing

The monthly volume of home sales exceeded $400 million for the first time in May, due to more newly constructed homes selling at an overall higher price point. This higher price point reflects the increasing costs of land, labor, and construction materials, but as the supply of existing homes stays well below demand, we will see some buyers shift to new construction for more options, even as prices rise.


GEM COUNTY HOME PRICES UP IN MAY 2018

In May 2018, 33 homes sold in Gem County, leaving 58 new and existing homes available for sale at the end of the month — down 4.9% from the same month last year, but up 31.8% from April 2018.

The median sales price for existing homes in Gem County was $188,875 as of May 2018, based on activity over the past 12 months — an increase of 12.1% over the same period last year. For new homes, the median sales price was $206,624 as of May, also based on activity over the past 12 months. This was up 11.0% over the same period in the previous year.

Specifically, in the city of Emmett, closings were down 43.9% year-over-year, as 23 homes sold in May 2018 compared to 41 in May 2017, for existing and new construction combined. Based on activity in both segments over the past 12 months, the median sales price for Emmett was at $183,084 in May 2018, a gain of 9.8% over the same period last year.

Due to the smaller number of homes listed and sold in Gem County — compared to Ada or Canyon County, for example — we look at a longer timeframe to identify trends in home prices, specifically a rolling 12-month median. This helps to smooth out variations in price that may show up in monthly comparisons if there is a very high- or low-priced sale one month and not the next. While this is helpful to understand macro market trends, a consumer who is thinking about buying or selling a home should speak to a REALTOR® to understand the micro trends specific to their specific situation.


RESOURCES:

Additional information about trends within the Boise Region, by price point, by existing and new construction, and by neighborhood, are now available in the May 2018 Ada CountyCanyon CountyGem County, and City Data Market Reports. This includes an explanation of the metrics and notes on data sources and methodology.

Download the latest (print quality) market snapshot graphics for Ada County Existing/ResaleAda County New ConstructionCanyon County Existing/ResaleCanyon County New Construction, and Gem County:

ADA Existing Snapshot - May 18

ADA New Construction Snapshot - May 18

Canyon Existing Snapshot - May 18

Canyon New Construction Snapshot - May 18

Gem Snapshot - May 18

 

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This report is provided by Boise Regional REALTORS® (BRR), a 501(c)6 trade association, representing real estate professionals throughout the Boise region. Established in 1920, BRR is the largest local REALTOR® association in the state of Idaho, helping members achieve real estate success through ethics, professionalism, and connections. BRR has two wholly-owned subsidiaries, Intermountain MLS (IMLS) and the REALTORS® Community Foundation.

If you have questions about this report, please contact Cassie Zimmerman, Director of Communications for Boise Regional REALTORS®. If you are a consumer, please contact a REALTOR® to get the most current and accurate information specific to your situation.

The data reported is based primarily on the public statistics provided by the IMLS, available at: intermountainmls.com. 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).

Q1-2018 Market Report

Q1-2018 Ada County Market Report
Warmer Winter Temps Meant an Early Spring Housing Market

Key Takeaways:

  • Warmer winter temps may have encouraged homebuyers to shop earlier, as the growth in purchase activity during the first quarter was more like what we typically see early in the second quarter of the year.
  • The median sales price is the point at which half of the homes sold for more and half sold for less. For the existing/resale segment, there were approximately 725 homes that sold for less than $273,650 during the first quarter of 2018 in Ada County, and another 725 that sold for more.
  • Prices for existing/resale homes continue to be driven by lack of inventory versus demand, with 33.1% fewer options for buyers to choose from in the first quarter compared to same quarter last year.

Just because there is low inventory doesn’t mean there is no inventory. At the end Q1-2018, there were nearly 1,150 existing and new homes for sale in Ada County across all price points.

Analysis:

During the first quarter of 2018, homebuyers in Ada County purchased 1,450 existing/resale homes and 658 new homes, for year-over-year increases of 7.9% and 26.8%, respectively. Warmer weather over the winter may have encouraged people to shop earlier, as the growth in activity — especially for new construction — is more like what we typically see early in the second quarter of the year.

The Q1-2018 median sales price for existing/resale homes in Ada County was at $273,650, up 21.1% from Q1-2017. The median sales price is the point at which half of the homes sold for more and half sold for less during a certain period. For context, this means that there were approximately 725 existing homes that sold for less than $273,650 during the first quarter of 2018 in Ada County, and another 725 that sold for more.

Prices for existing homes continue to be driven by lack of inventory. Based on the number of homes available for purchase at the end Q1-2018—just 498 properties, —homebuyers had 33.1% fewer options to choose from than the previous year.

Looking at the new construction segment, the Q1-2018 median sales price in Ada County was at $355,085, up 12.1% from the same period last year. This means that there were approximately 329 new homes that sold for less than the median price during the first quarter of 2018 in Ada County, and another 329 that sold for more.

New construction prices primarily reflect the rising prices of labor and materials, as well as lower inventory this year than last year. There were 645 new homes for sale at the end of Q1-2018, down 18.7% from the end of Q1-2017. However, there continues to be more new homes available than existing in Ada County.

Key Metrics:

Q1 Ada County Housing Data by Segment

Q1-2018 Existing Home Median Sales Price

Q1-2018 New Home Median Sales Price



Q1-2018 Gem County Market Report
Low Housing Inventory Persists in Gem County

Q1 Gem County Housing Data by Segment

Homebuyers in Gem County purchased 60 homes during the first quarter of 2018, even with the same quarter last year.

The Q1-2018 median sales price in Gem County was at $189,175, up 9.8% from Q1-2017. The median sales price is the point at which half of the homes sold for more and half sold for less during a certain period. For context, this means that there were approximately 30 homes that sold for less than $189,175 during the first quarter of 2018 in Gem County, and another 30 that sold for more.

Based on the number of homes available for purchase at the end Q1-2018—just 41 properties—homebuyers in Gem County had 43.9% fewer options to choose from this year compared to last year.

Additional information about trends within the Boise region, by price point, by existing and new construction, and by neighborhood, are now available in the March 2018 Ada CountyCanyon County, and Gem County and City Data Market Reports. This includes an explanation of the metrics and notes on data sources and methodology.

Download the latest market snapshot graphics for Ada County Existing/Resale, Ada County New ConstructionCanyon County Existing/Resale, Canyon County New Construction, and Gem County:

ADA Existing Snapshot - March 18

ADA New Construction Snapshot - March 18

 

Canyon Existing Snapshot - March 18

Canyon New Construction Snapshot - March 18

Gem Snapshot - March 18

Download print quality market snapshot graphics for Ada County Existing/ResaleAda County New ConstructionCanyon County Existing/ResaleCanyon County New Construction, and Gem County.

 

 

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NOTE: Monthly housing market data for cities and neighborhoods are fantastic tools for REALTORS® to use when advising their clients about real-time home listing and purchase decisions. Boise Regional REALTORS® (BRR) will continue providing REALTORS® with monthly data as a member benefit and a market intelligence tool but are shifting to a quarterly market analysis schedule for our press releases. This gives us the ability to look at the macro trends in the data that are shaping our region’s housing market, along with the bandwidth to go deeper into additional metrics, geographies, and market segments, in between these quarterly reports.

# # #

This report is provided by Boise Regional REALTORS® (BRR), a 501(c)6 trade association, representing real estate professionals throughout the Boise region. Established in 1920, BRR is the largest local REALTOR® association in the state of Idaho, helping members achieve real estate success through ethics, professionalism, and connections. BRR has two wholly-owned subsidiaries, Intermountain MLS (IMLS) and the REALTORS® Community Foundation.

If you have questions about this report, please contact Cassie Zimmerman, Director of Communications for Boise Regional REALTORS®. If you are a consumer, please contact a REALTOR® to get the most current and accurate information specific to your situation.

The data reported is based primarily on the public statistics provided by the IMLS, available at: intermountainmls.com. 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).

Follow up to a Recent KTVB Story

Hello BRR Members,

You may have seen a recent KTVB story about the real estate market. We were happy that they reached out to us for a take on the stats, as we want to be sure we’re helping you tell the story of the market with facts and data.

However, we know they can’t fit everything into a short segment so wanted to provide you with our full talking points and context around some of the quotes used in the story, for your reference and to share with your clients.

  • Based on data back to 2004, we do see inventory at its lowest point with prices at their highest. It’s a function of supply and demand, as we have more people staying in their homes longer with more people move into the area.
  • The most recent market data reflects the start of the spring market and combines existing and new construction together. The median sales price of existing homes is nearly 35% lower than that of new construction.
  • The full context of the quote, “Boise is still a more affordable,” was that Boise is still a more affordable market when compared to nearby higher priced areas, but we are watching prices, wages, and mortgage interest rates to provide local leaders with the information they need to make decisions about how our community will grow.
  • While prices are growing, we do see the rate at which they are growing has been slowing down for the past few years. As mortgage interest rates rise, a more even pace of growth should continue.
  • “Inventory will be something that buyers will have to work through with their REALTORS® to identify the options they do have.” We know there is a lack of inventory especially at the lower price points, but there are still options available.
  • When asked about the perception that the quality or condition of homes under $250,000 were mostly rehabs or needed a lot of work, we shared that “buyers shouldn’t think they’re going to have to sacrifice too much or do a lot of work” just because they are buying in the lower price points. There are well-maintained homes in all areas and all price points.
  • There are homes in both existing and new construction in all prices points, but lower priced new construction is more likely going to be found in western Ada County or in Canyon County, where new developments are coming online.
  • One positive effect of this market for homeowners is the growth in equity they’ve seen over the past few years. For those who do want to move, they may be able to move up in price point or into new construction or have equity to make improvements on their home to make it more suitable to their needs if they are not interested in selling.

We hope this information is helpful for you. If you have questions or need more, please don’t hesitate to let us know.

BRR is committed to fostering conversation around housing affordability and growth, and what’s needed for our communities.  We’ve been encouraged by the discussions we’ve been a part of with related industry groups of developers, builders, and mortgage lenders; local governments, transportation agencies, and economic development groups; and, engaged neighborhood associations and residents who want to preserve our quality of life. BRR will continue to monitor the local real estate market and provide market research in order to inform our members, decision makers, and the public. We will also continue our advocacy efforts in supporting local initiatives that enhance the value, safety, and livability of our region.

If you’d like to be part of the growth and affordability discussion or have ideas on what you’d like to see BRR doing on behalf of you and your clients, please reach out to me directly.

Sincerely,

Breanna Vanstrom MBA, RCE
Chief Executive Officer
Boise Regional REALTORS®

February 2018 Market Report

ADA COUNTY HOME PRICES HIT RECORD HIGH
AS INVENTORY DROPS TO RECORD LOW

Boise being named one of the fastest growing cities has certainly brought a lot of additional attention to our region lately, but our market reports have been reflecting that growth for months, most evident through buyer demand vs. supply and its impact on home prices.

In February 2018, inventory was down 18.8% from the previous year, with a record low of 1,205 homes available for purchase, compared to 1,513 homes that were under contract, up 16.1% year-over-year. The result was a new high median sales price for Ada County of $297,500, up 16.7% over the same month last year.

In February 2018, inventory was down 18.8% from the previous year, with a record low of 1,205 homes… Click To Tweet

The continual tightening of inventory is a concern, but we’re hearing from some local builders than more homes will be coming this year. New construction homes are more likely to be built in the southern and western parts of Ada County, with Canyon County seeing much of the new development.

In fact, there were 314 new homes for sale in Canyon County in February 2018 versus the 226 in Ada County. This put months supply of new construction inventory in Canyon County at 5.2 months, a balanced level compared to buyer demand — including an encouraging uptick in new supply priced at or below $300,000. Ada County’s months supply of new homes wasn’t quite as abundant at 3.3 months in February.

Those looking to buy this spring should be prepared to make quick decisions and strong offers to be competitive and work with their REALTOR® to stay on top of everything that’s needed to get to the closing table.

An article from REALTOR® Magazine also provides tips for prospective buyers to discuss with their REALTOR® when writing their offers and negotiating terms:

  1. Discuss the contingencies you’re willing to waive ahead of time. If you find yourself in a multiple-offer situation, any concessions you’re willing and able to make regarding inspection results and repairs or being flexible on the closing date may put you in a stronger position than other buyers.
  1. Consider offering a rent-back agreement. Sellers who plan to purchase another home are also going to have a difficult a time finding a place in this tight-inventory environment. Offering sellers the option to rent back their home after closing so they can stay longer while they look for another home could make your offer stand out. This may not be an option for everyone, but if so, be sure you are totally comfortable with the arrangement and ask your REALTOR® to explain every term in the agreement to avoid any confusion.
  1. Be financially prepared beyond the mortgage preapproval letter. If you have any credit issues, clear them up early and be sure you have the funds necessary to close. If there is anything that could stall a transaction upfront or at closing, consider working with a credit counselor or other professional to remove all obstacles before you start looking for a home.

 

MORE GEM COUNTY HOMES UNDER CONTRACT THAN A YEAR AGO

In February 2018, there were 47 homes under contract in Gem County, up 17.5% from February 2017. That left 44 homes available for sale at the end of February, down 2.2% from the same month last year.

Pending sales (or homes under contract) measures buyer demand, while inventory (or homes for sale) measures supply. The relationship between these two metrics is reported as Months Supply of Inventory (or MSI), which was at 2.1 months in February 2018.

A balanced market—not favoring buyers or sellers—is typically when MSI is between 4-6 months of supply. MSI below four months is usually more favorable to sellers, while MSI above six months is usually more favorable to buyers.

Because buyer demand is outpacing supply, as shown through the low MSI calculation, home prices are rising in Gem County. Due to the smaller number of transactions that occur in the area, we use a rolling 12-month median sales price, to get a better idea of the overall trends.

Based on data between March 2017 and February 2018, the median sales price for Gem County was $185,975, an increase of 10.6% over the same period last year.

Read our follow up to the 2018 February Market Report here.

Additional information about trends within the Boise region, by price point, by existing and new construction, and by neighborhood, are now available in the February 2018 Ada CountyCanyon County, and Gem County and City Data Market Reports. This includes an explanation of the metrics and notes on data sources and methodology.

Download the latest market snapshot graphics for Ada CountyCanyon County, and Gem County:

ADA Snapshot - February 18CANYON Snapshot - February 18 GEM Snapshot - February 18

Download print quality snapshot graphics for Ada CountyCanyon County, and Gem County.

# # #

This report is provided by Boise Regional REALTORS® (BRR), a 501(c)6 trade association, representing more than 4,400 real estate professionals throughout the Boise Region. Established in 1920, BRR is the largest local REALTOR® association in the state of Idaho, helping members achieve real estate success through ethics, professionalism, and connections. BRR has two wholly-owned subsidiaries, Intermountain MLS (IMLS) and the REALTORS® Community Foundation.

The data reported 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).

For areas with fewer total transactions, the sales price reported is based on a rolling 12-month median. This smooths out potential month-over-month swings due to seasonality, very high or low sales prices that may occur one month but are not common, or other activity that may not be representative of the overall price trends for the area or market segment.

If you are a consumer, please contact a REALTOR® to get the most current and accurate information specific to your situation.

January 2018 Market Report

No Lag in Demand for Homes in Ada County

Last January, we discussed the effects of a historic snowfall on Ada County’s real estate market, which is quite different from recent stories about the mild winter helping boost new construction.

But despite builders being able to work when they normally cannot, it hasn’t been enough to push new inventory higher than it was last year. Homeowners are also not listing quickly enough to raise existing inventory levels, reasons for which are discussed in BRR’s 2017 year-end market report.

Surprisingly, pending sales (a measure of home buyer demand) were up 32.7% year-over-year, even as the supply of homes was down:

Key Metrics January 2017 January 2018 YOY % Chg
Inventory 1,425 1,213 -14.9%
Pending Sales 1,037 1,376 +32.7%
Difference 388 -163

 

When looking at these numbers, we see there were more pending sales in January 2018 than the number of homes for sale, both in the existing and new construction segments (figures above are combined).

This happened in early 2017, as well, and can occur because homes usually don’t close in the same month they are listed since it can take 30-90 days to do so after an offer is accepted.  So, when inventory is very low, there can be more homes under contract or pending, than available for purchase.

It’s remarkable that we’re seeing pending sales outpace inventory for new construction, too, especially considering the weather has been more favorable for building this winter. These numbers further reinforce the tremendous growth and demand for housing in our area.

The result of this very low supply compared to the very high demand, is that the Ada County median sales price hit a new record high of $279,900 in January 2018, up 16.8% from January 2017.

 

Demand and Supply Pressures Impacting Gem County Home Prices

In January 2018, there were 42 homes under contract in Gem County, up 7.7% from January 2017. That left 47 homes available for sale at the end of January, up 11.9% from the same month last year.

Pending sales (or homes under contract) measures buyer demand, while inventory (or homes for sale) measures supply. The relationship between these two metrics is reported as Months Supply of Inventory (or MSI), which was at 2.2 months in January 2018.

A balanced market—not favoring buyers or sellers—is typically when MSI is between 4-6 months of supply. MSI below four months is usually more favorable to sellers, while MSI above six months is usually more favorable to buyers.

Because buyer demand is outpacing supply, as shown through the low MSI calculation, home prices are rising in Gem County. Due to the smaller number of transactions that occur in the area, we use a rolling 12-month median sales price, to get a better idea of the overall trends.

Based on data between February 2017 and January 2018, the median sales price for Gem County was $183,350, an increase of 10.1% over the same period last year.

Additional information about trends within the Boise region, by price point, by existing and new construction, and by neighborhood, are now available in the January 2018 Ada County, Canyon County, and Gem County and City Data Market Reports. This includes an explanation of the metrics and notes on data sources and methodology.

Download the latest market snapshot graphics for Ada CountyCanyon County, and Gem County:

ADA Snapshot - January 18     CANYON Snapshot - January 18     GEM Snapshot - January 18

 

Download print quality snapshot graphics for Ada CountyCanyon County, and Gem County.

# # #

This report is provided by Boise Regional REALTORS® (BRR), a 501(c)6 trade association, representing more than 4,400 real estate professionals throughout the Boise region, with a focus on Ada and Gem counties. Established in 1920, BRR is the largest local REALTOR® association in the state of Idaho, helping members achieve real estate success through ethics, professionalism, and connections. BRR has two wholly-owned subsidiaries, Intermountain MLS (IMLS) and the REALTORS® Community Foundation.

The data reported 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 Residential Real Estate Market Report

Slide1

For the past few months (and years), we’ve been focusing on the causes and effects of low inventory in our local housing market… and for good reason.

December 2017 marked 39 consecutive months of year-over-year declines in the number of existing homes for sale in Ada County, going back to October 2014.

Metrics Ada Existing
Oct-14 Dec-17 % Change
Inventory (Supply) 1,702 537 -68.4%
Closed Sales (Demand) 542 588 +8.5%%
Months Supply of Inventory 3.2 0.9 -71.8%

 

Inventory of existing homes in Ada County was at 1,702 in October 2014 and at a record-low 537 in December 2017, a decrease of 68.4%. In comparison, there were 542 closed sales in October 2014 versus 588 in December 2017, a modest increase of 8.5%.

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 compared to less than one month in December 2017, a drop of 71.8%. (A balanced market — not favoring buyers or sellers — is typically between 4-6 months supply of inventory.)

Our past reports have looked at why there’s so much demand for housing — growing population due to economic opportunities, out-of-state buyers moving in, and Millennials (a huge population group) “aging into” homeownership — but what’s been more difficult, is understanding the supply side pressures and why homeowners aren’t selling when the market is seemingly in their favor.

Digging deeper into the data for existing inventory, we noticed that just as Ada County’s existing inventory had been declining for the past 39 months, so had existing inventory in Canyon County and Gem County.

So, what happened in October 2014 — or leading up to it — that has homeowners throughout the Boise region staying put?

We’ve identified three potential data-driven explanations — Retirees, Boomerang Buyers, and Housing Affordability — and another more psychological explanation — a feeling of opportunity, whether it be an opportunity to be part of the growth the Boise region is experiencing, or the opportunity to wait and sell when we reach a new market peak. Let’s take a closer look at each of these.


Retirees

Our region’s population is growing, and as shared in previous reports, it’s one of the main reasons demand for housing has increased. But if we look at population by age, the share of our population that has grown the most is adults between 55-74 years old, based on U.S. Census data available starting in 2009:

County 16 to 19
Years Old
20 to 24
Years Old
25 to 44
Years Old
45 to 54
Years Old
55 to 64
Years Old
65 to 74
Years Old
75 Years
Old +
Ada 2.5% 1.3% 0.8% 1.3% 4.7% 8.0% 3.1%
Canyon 2.4% 1.9% 0.8% 1.9% 4.3% 7.1% 1.9%
Gem 1.3% -0.5% -1.1% -0.6% 2.8% 5.1% 1.5%

 

These percentages reflect current residents from the Baby Boomer generation who are nearing retirement and aging into these categories. But they also support what we hear anecdotally from REALTORS® who have clients moving here from out of state to retire, or, are planning to retire in the next few years and purchasing a retirement home here now.

This makes sense as Boise and Meridian, in particular, have been named as best places to live, to retire, to do pretty much anything, mostly because the region boasts many of the amenities today’s retirees are looking for… college town, culture, great downtown, affordability, and access to quality healthcare.

When people purchase retirement homes, they buy with the plan to stay, and those who move into our area to retire don’t typically have another home to sell here. These two factors further constrict the inventory of homes for sale in the existing/resale segment.


Boomerang Buyers

More than 50% of the homes sold in Ada County in 2010 and 2011 were distressed in some way (foreclosure, short sale, bank-owned, or HUD owned). That number fell to 30.8% in 2012 and dropped to 14.1% in 2013. In contrast, the share of distressed home sales was just 1.2% in 2017.

Slide11

For those homeowners who lost their home during the Great Recession, it would take a few years to rebuild the credit and financial resources necessary to buy again. 2013 and 2014 is when we started to see “boomerang buyers” — referring to people who lost homes to foreclosures or short sales — “coming back” to the market. Boomerang buyers purchase homes from available inventory, but would not have an existing house to sell, further constricting existing inventory levels.

Additionally, once back into a home, it’s unlikely these boomerang buyers would look to sell again soon after, due to the enormous emotional toll a foreclosure or short sale can take on a family. And for some, the run-up in local home prices could feel like history repeating, so they may prefer to stay in place than risk moving up to another potentially unaffordable mortgage.

Related to this… many of the homes lost to foreclosures and short sales in 2010 and 2011 were picked up by investors who often turned them into rental properties that they’ve held on to ever since. And why not? The average monthly rent for a single-family home in Ada County grew 41.3% between 2012 and 2017, an increase of nearly $406 per month, according to analysis of data from the Southwest Idaho Chapter of the National Association of Residential Property Managers. These rentals represent thousands of homes that potentially would have been listed (and then counted as existing inventory) had the Great Recession never occurred.

Housing Affordability

Those who purchased a home at the previous high mark in 2006, saw their equity fall 45-56% through 2011. By 2014, prices were recovering, but most were still 15-26% below peak prices.

During that time, many would-be sellers didn’t have the equity to sell and move up, keeping them in place and holding back existing/resale inventory. Comparing 2006 to today’s median sales prices, homeowners are just now seeing prices 7-13% higher after more than a decade of recovery.

In contrast, those who purchased at the bottom of the market in 2011, have seen home prices grow 108-158% throughout the region. On the sell side, they likely have equity to roll into a new home, and those who can move up in price point or purchase new construction may be pleasantly surprised at the inventory available.

However, today’s prices could be out of reach for some, especially when compared to income changes over the same period. Between 2011 and 2017, the median family income for Ada County was up 7.2% but fell 4.5% for Canyon County and 8.9% for Gem County.

Looking more closely at Ada County, the following chart shows a decline in affordability, based on the median price of existing homes, 30-year fixed mortgage rates, and median family incomes, combined to form a Housing Affordability Index rating (also referred to as “HAI”):

Slide14

That said, our market is affordable when compared to the U.S. overall, and to nearby higher priced markets — which is where much of our population growth is coming from. To new residents, prices for new or existing homes seem quite reasonable.

Slide15

Yet while the actual median sales price continues trending upwards — putting major pressure on affordability — the rate at which it does so has been slowing down. 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.

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Year-over-year price gains began falling in mid-2006 through the end of 2009, with fluctuations through 2011. Year-over-year price gains grew consistently through 2012, led by low mortgage rates and more sales at higher price points.

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.

Opportunity to be part of the Growth… or to Cash Out

As noted with retirees, people are finding out what a great place the Boise region is, and they want to be here. The “Second Annual Treasure Valley Survey” from Boise State University indicated that current residents enjoy the quality of life, thriving economy, and neighborhood safety. There is growing excitement and interest in the area, and perhaps people don’t want to miss out by leaving.

So, what’s generated all this buzz about our region and Boise in particular?

According to this Marketplace article from February 2013, Boise’s growth was being driven by “a diversified economy fueled by low-interest rates, high technology, and local talent.”

This Washington Times article from March 2014, further points out, that as the Boise Centre made plans for expansion, hoteliers took notice and made their own plans to build. We’ve seen the results of that with many hotels opening in 2017, including three just in downtown Boise, The Inn at 500 Capitol, Hyatt Place, and Residence Inn. In addition, plans were being made for Simplot’s new downtown headquarters, renovations were underway on The Owyhee, and a remodel of the Riverside Hotel was in the works.

2014 was also when a very visible improvement happened in downtown Boise: “The Pit” was finally filled in. After sitting vacant for more than 25 years, 8th and Main was completed, bringing with it businesses, energy, and excitement.

And what about all of those “top ten” lists that highlight Boise, Meridian, and Idaho? Does that national attention have an impact on our growth? According to Clark Krause, Executive Director of the Boise Valley Economic Partnership (BVEP), it absolutely does: “We win and lose by rankings.”

Clearly, the growth we’ve seen since 2014 — when we began seeing year-over-year declines in existing inventory — not only encouraged people to move here but for those who already lived here, to stay and be part of the opportunities being created, seemingly, every day.

On the other hand, when any market is on an upward swing, there’s a natural inclination to want to “time the market” and cash out near the peak. We’ve heard from some REALTORS® that they have would-be sellers, both homeowners and investors, that are holding on to their properties see just how far prices may climb before listing.

A recent (and very informal) poll of Boise Regional REALTORS®’ Board of Directors found that the primary reasons their clients listed a property were reactionary, done because of a work transfer, change in family circumstances, or investors selling residential properties to free up cash for land or commercial purchases. In contrast, the top reasons their clients bought a home were all “because they wanted to.” Out-of-state buyers moving for lifestyle reasons or to purchase a retirement home (supporting the research on retirees), or, moving to Idaho to be near family.

The combined impact of boomerang buyers coming back, investors and retirees purchasing and holding properties, affordability keeping people in place, as well as the potential opportunities that come from recent growth, seem to be primary reasons we are experiencing historically low levels of existing inventory.

These may also be some of the reasons behind the low inventory nationally. The National Association of REALTORS® (NAR) reports that today, people are staying in their homes for a median of 10 years versus a 6-year median in 2012. It’s difficult to free up existing inventory, particularly entry-level properties, when homeowners aren’t moving — whatever their reason.

The excitement over these opportunities may be held in check by the “cautious optimism” sentiment we’ve been hearing about our market throughout the recovery and into 2018. It appears people aren’t going to let themselves get too comfortable or overconfident just in case the market shifts.

That said, many economic and demographic factors seem to be working in our favor — specifically record high sales volume and low unemployment — leading to confidence from out-of-state investors that some predict will go on for the next few years.

In early 2017, the Idaho Statesman reported that Idaho led the country in job growth and one of the lowest unemployment rates. Based on the most recent stats from the U.S. Bureau of Labor Statistics, as of November 2017, Idaho had just 2.9% unemployment, Ada County was at 2.8% (down 17.6% from November 2016), Canyon was at 3.3% (down 19.5% year-over-year), and Gem County was at 3.5% unemployment (down 16.7% year-over-year).

Then in November 2017, Ada County home sales surpassed the $3 billion-mark for the first time. The year ended with each county experiencing record high sold volume — Ada County’s 2017 sold volume was $3.3 billion, Canyon County reached $944.6 million, and Gem County ended the year at $66.5 million.

What are economists predicting for 2018?

For the U.S. overall, REALTOR.com expects continued price growth, persistence inventory shortages, and increasing mortgage interest rates. An article from Forbes.com echoed much of the same, but in addition, predicted that in more costly markets, renting may become much more affordable than buying.

Locally, purchasing may still be better, but it all depends on location, income, and housing needs. Looking at Ada County, for example, the average monthly rent for a single-family home in Ada County last year was $1,170, based on data from the Southwest Idaho Chapter of the National Association of Residential Property Managers.

In comparison, a monthly mortgage payment (principal and interest only) for an existing home at the median price in Ada County would be approximately $900 per month. This is based on BRR’s housing affordability index calculations, using data as of December 2017.

The major unknown is how the new tax reform will truly impact the economy, and in turn, the housing market. The National Association of REALTORS® has put out a guide for homeowners’ reference, and we’ll continue to watch and report on its effect on our local economy throughout the year.

Want more stats? Have questions?

Visit boirealtors.com for our market reports, released monthly on or after the 12th calendar day. Contact Boise Regional REALTORS® Chief Executive Officer, Breanna Vanstrom, at 208-947-7228 or breanna@boirealtors.com for assistance with these stats or any other association program. Visit our website to learn more about our data sources, methodology, and how to properly cite this data.

Here is a printable, shareable infographic summarizing the 2017  Residential Real Estate Market Report.

2017 Residential Real Estate Market Report Infographic

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This report is provided by Boise Regional REALTORS® (BRR), a 501(c)6 trade association, representing more than 4,400 real estate professionals throughout the Boise region. Established in 1920, BRR is the largest local REALTOR® association in the state of Idaho, helping members achieve real estate success through ethics, professionalism, and connections. BRR has two wholly-owned subsidiaries, Intermountain MLS (IMLS) and the REALTORS® Community Foundation.

The data reported 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.

$3 Billion Worth of Homes Have Sold in Ada County, Setting New Record

Ada County home sales surpassed the $3 billion-mark for the first time, based on Total Dollar Volume figures year-to-date, January 1–November 30, 2017.

Historically, the month of December adds another $100-150 million worth of sales, on average going back to 2005, so we should see Total Dollar Volume exceed $3.1 billion for all of 2017.

Year-to-date through November 2017, nearly 10,000 homes sold in Ada County, up just 2.6% compared to 2016. Breaking this down by property type illustrates the impact limited supply has had on existing home prices, as well as higher building costs on new home prices:

November 2017 Table

As shown in the chart above, existing home sales were nearly even with last year, yet total dollar volume increased by 9.2%. This means that individual home sale prices had to increase, as buyers competed for persistent, limited inventory of existing homes, which was down 13.2% compared to last year at this time.

In contrast, new home sales were up by 10.9% over last year, with a slight uptick in inventory. With a more balanced supply of new homes compared to demand, the 17.9% growth in total dollar volume mostly reflects the increased costs of land, materials, and labor that builders are including in new home prices.

Total Dollar Volume, for existing and new construction combined, has been steadily increasing since 2009. The previous high point was in 2006 when Total Dollar Volume Sold was nearly $2.7 billion. Here’s a historical look at Total Dollar Volume since 2005:

November 2017 Charts

Additional information about trends within each county, by price point, by existing and new construction, and by neighborhood — including monthly statistics for November 2017 — are now available in the monthly 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, Canyon County, and Gem County:

ADA Snapshot - November 17

CANYON Snapshot - November 17GEM Snapshot - November 17

Download print quality snapshot graphics for Ada CountyCanyon County, and Gem County.

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This report is provided Boise Regional REALTORS® (BRR). BRR is the largest local REALTOR® association in Idaho, with over 4,400 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.

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

 

 

 

 

 

 

 

 

# # #

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.

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 has been slowing down.

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

 

 

 

 

 

 

 

 

# # #

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

 

 

 

 

 

 

 

# # #

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.