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®

More New Construction Homes Available Than Existing in Ada County

Ada County hit another record low for inventory in December 2017, with just 1,391 homes for sale — a 6.6% drop from December 2016. While we’ve discussed the lack of inventory at length in our previous market reports, a new twist on the inventory shortage showed up in the December 2017 numbers…

There were 317 more new homes for sale in Ada County in December 2017 than existing homes. The actual numbers reported for Ada County were 854 new homes, compared to 537 existing homes on the market in December 2017.

Looking back at the year, there were five months that this happened, but December 2017 had the largest spread. (We saw this once in December 2016, but never before then in our ten-year data set.)

As reported by the National Association of REALTORS® (NAR), we need builders to bring more product online to pull us out of our local – and nationwide – inventory shortage, so an increase in new construction is welcomed.

But some question if this strategy could lead to another wave of overbuilding like we saw in the mid-2000s. At that time, new construction was more speculative, which led to more new houses than there was demand. Today’s new construction inventory levels are much more in line with buyer demand for new homes, which has increased with the Boise region’s population growth.

The Months Supply of Inventory figures for new construction in Ada County over the past 4-5 years indicate a general balance between supply and buyer demand. In December 2017, the months supply of new homes was at 4.1 months. A balanced market—not favoring buyers or sellers—is typically between 4-6 months of supply.

December 2017 Chart

That’s a good starting point for builders, as they’re not too far behind demand right now. Although, we did see the months supply of new homes dip below 4.0 months last summer, so the more product that can get started now, the better.

A mix of price points among newly constructed homes will also be necessary, but that’s proved difficult with the rising cost of land, labor, and materials. This was evident in December 2017, as Ada County’s median sales price for new homes saw a record high of $361,030, up 13.5% from December 2016. (In comparison, the median sales price of existing homes in Ada County was at $254,250 in December 2017.)

Additional information about trends within Ada County as well as Canyon County, by price point, by existing and new construction, and by neighborhood, are now available in the December 2017 Market Report. This 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 - December 17   CANYON Snapshot - December 17    GEM Snapshot - December 17

Download print quality snapshot graphics for Ada County, Canyon 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 4,300 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.