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.

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

 

 

 

 

 

 

 

 

# # #

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.

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.

 

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

 

 

 

 

 

 

 

 

# # #

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.

Pending Sales of Existing Homes Outpace Inventory in the Boise Region

Homes under contract, also called “pending sales,” are properties with an accepted offer that should close within 30-90 days. Because homes don’t typically go pending and close during the same month they’re listed, when inventory is very low, there can be more pending sales than homes available to purchase.

For the past three months in both Ada and Canyon County, pending sales of existing homes have outpaced inventory, as buyer demand continued to be strong throughout the spring market.

Ada County Inventory vs Pending Chart 052017 smaller Canyon County Inventory vs Pending Chart 052017 smaller

Taking a closer look at April 2017 in Ada County, 1,107 existing homes went under contract compared to the 891 existing homes that were available for sale. In Canyon County, 556 existing homes went under contract compared to just 401 existing homes available for sale.

Canyon County experienced this same three-month trend in February, March, and April 2016, but it reversed by May 2016. Ada County pending sales were only higher than inventory in April last year.

Low inventory has also affected closed sales figures for existing homes, with year-over-year declines in both counties. This is not a reflection of buyer demand, as seen by the pending sales figures mentioned, but more simply: buyers can’t buy homes that aren’t for sale.

While the National Association of REALTORS® (NAR) is looking to builders to help solve the inventory shortage nationwide, locally, we need additional existing inventory to come online.

Additional information about trends within each county, by price point, by existing and new construction, and by neighborhood, are now available in the April 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 - April 17

CANYON Snapshot - April 17

 

 

 

 

 

 

NOTE: Monthly pending sales data is not available prior to 2011, so the instances referenced are the only times we’ve seen this occur in our data set.

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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.

Low Inventory of Existing Homes Continues to Drive Prices

The continued shortage of inventory compared to buyer demand has pushed the median sales price of existing/resale homes up near the record high in Ada County and set a new record in Canyon County.

As of March 2017, the median sales price for existing homes in Ada County was up 8.4% year-over-year, reaching $233,000. While this was an increase of 5.5% over February 2017, the previous high point was in June 2016 at $239,900.

In Canyon County, the median sales price for existing homes reached $164,700, up 10.2% compared to March 2016, and up 4.8% over February 2017. The previous high point was in July 2016 when the median sales price of existing homes reached $160,450.

While more existing homes are being listed each month as we move further into the spring market, it’s not enough to keep up with buyer demand. This is especially apparent when comparing current inventory to last year’s levels.

According to Lawrence Yun, Chief Economist for the National Association of REALTORS®, the key to fixing the inventory crunch is with homebuilders. They must increase inventory in all prices points to not only help current buyers but also existing homeowners who don’t know where they will move if they sell. As more new inventory becomes available, existing homeowners could move and free up properties in the low to middle price points.

We did see an uptick in the number of new homes for sale compared to last year, but again, existing inventory continued to lag:

Inventory as of March 31st March 2016 March 2017 YOY % Chg
Ada County

Existing/Resale

New Construction

 

1,062

734

 

744

793

 

-29.9%

+8.0%

Canyon County

Existing/Resale

New Construction

 

480

292

 

383

310

 

-20.2%

+6.2%

Builders know there is demand at all price points and they are eager to meet it. However, in order to be profitable, they often build homes at higher price points due to the constraints of higher material costs, land prices, and the shortage of labor. As existing home sellers are able to net more as prices increase, the hope is that they will choose to sell and move up in price point, especially as there are new homes available in the higher price points.

Additional information about trends within each county, by price point, by existing and new construction, and by neighborhood, are now available in the March 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 - March 17CANYON Snapshot - March 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.

 

Spring Hits Ada and Canyon County Housing Markets

As expected, warmer weather brought more buyers out in February, pushing pending sales in Ada County 25.7% higher than the previous month, with 1,303 homes going under contract. Though pending sales were up month-over-month, they were 5.5% lower in February 2017 than in February 2016 because there were fewer homes available to purchase. Speaking of inventory, it was down 16.1% in Ada County from February 2016.

But there was a bright spot on the inventory front — the number of homes for sale was up 4.1% in February 2017 over January 2017. More encouraging, this increase was caused by more existing homes coming online, up 14.0% month-over-month.

The story was similar in Canyon County, where pending sales were 30.8% higher in February 2017 versus January 2017, representing 565 homes under contract. Overall inventory was down 11.5% year-over-year, but the number of existing homes for sale was up 3.0% from January.

This uptick in spring inventory seems to be happening a month sooner than is typical, which should be welcome news to buyers. Through member feedback, we’re hearing that sellers are encouraged by the buyer traffic they’re seeing and the increase in prices.

As shared in previous reports, the area overall median sales price (existing and new construction combined) has been pushed up by the limited supply compared to buyer demand. February 2017 hit a new high median sales price in Ada County of $256,600, led by gains in new construction prices. Canyon County was just $250 shy of reaching its previous median sales price market peak, also due to new construction prices.

A recent report based on data from the Federal Housing Finance Agency (FHFA) actually notes that the Boise metro area has joined cities such as Denver, San Francisco, Nashville, and others, as being “fully recovered” from the recession as prices have surpassed previous market peaks. NAR’s Chief Economist Lawrence Yun also referred to Boise in an interview, reinforcing our market’s likelihood to see continued price appreciation.

While not as strong as new housing, the median sales price for existing homes also rose. In Ada County, the February 2017 median sales price for existing homes was at $220,900, nearly even with January 2017 but up 3.8% from February 2016. Canyon County’s median sales price for existing homes was $157,200 in February 2017, up 6.9% from February 2016 and up 3.4% over January 2017.

Additional information about trends within each county, by price point, by existing and new construction, and by neighborhood, are now available in the February 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 - Feb 17CANYON Snapshot - Feb 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.

Snow Hits January Housing Market… Sort of

While most of the white stuff has melted, January’s historic snowfall had an effect on the local real estate market… sort of.

Between extended school closures, below freezing temperatures, poor road conditions, and even a state of emergency in the City of Boise, many people were focused on shoveling driveways rather than seeing homes. Though purchase activity was down in January compared to last year, it was up from the previous month.

In January 2017, 1,037 homes went under contract in Ada County, down 6.5% from January 2016, but up 5.4% over December 2016. In Canyon County, 432 homes went pending in January 2017, down 1.6% from January 2016, but up 11.3% from December 2016. Homes that are pending typically close within 30-90 days.

Homeowners weren’t as eager to list in January, which pushed overall inventory down further. There were 1,425 homes for sale in Ada County in January 2017, down 15.9% from a year ago and down 4.4% from December 2016. Canyon County had 705 homes for sale in January 2017, down 11.3% from January 2016 and down 12.7% from December 2016.

Those waiting until spring to list their home — for nicer weather or to potentially net more money — should continue to see prices rise over the next few months, however; the rate at which prices are rising has been slowing down, both nationally and locally.

Increases in mortgage rates, which many economists expect in 2017, may further affect price gains. The Mortgage Bankers Association (MBA) is forecasting the 30-Year Fixed Rate Mortgage to reach 4.7% by Q4-2017, 0.9 points higher than Q4-2016 (3.8%) and 0.4 points higher than their forecast for Q1-2017 (4.3%).

To reiterate, slowing price appreciation does not mean that actual prices are going down, nor does it mean that people are losing equity. For those homeowners considering selling, it’s possible their home is worth more than they think. Seek the advice of a REALTOR® to understand what supply and demand looks like in your immediate area, and how home prices have responded as a result.

Additional information about trends within each county, by price point, by existing and new construction, and by neighborhood, are now available in the January 2017 Market Report. This report includes an explanation of the metrics and notes on data sources and methodology. More information about trends in mortgage rates, inventory’s impact on prices, and the slowing rate of price appreciation, view BRR’s 2016 Residential Real Estate Market Report.

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

ADA Snapshot - JanuaryCANYON Snapshot - January

 

 

 

 

 

 

 

 

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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.

Boise Regional REALTORS® 2016 Residential Real Estate Market Report

Record High Prices Due to Record Low Inventory — Not Market Speculation

Year-End 2016 Market Report - no forecast_Page_01

Summary

Despite the fact that the local median sales price reached a new record midway through 2016, there is not an immediate concern of a real estate bubble. Home prices rose last year because of consumer demand versus supply — not speculation as we experienced a decade ago. Further, the local economy is much stronger and credit is more regulated than during the previous market peak, making our current conditions very different. BRR’s 2016 Residential Real Estate Market Report dives into the local inventory and consumer trends that drove real estate in the Boise Region last year, as well as what may occur in 2017. Some key insights from this report include:

2016

  • Median sales price in both Ada and Canyon counties rose in 2016 due to consumer demand versus limited supply — not speculation. 
  • Ada County prices and inventory rose and fell together between 2004 and September 2012.  Since then, inventory has not kept up with demand and is down 28.8% from September 2012, which pushed the median sales price up 40.0%.
  • This is also true in Canyon County, where prices and inventory rose and fell together between 2006 and March 2012.  Since then, inventory has not kept up with demand, down 11.5%. Low inventory plus more higher-priced new construction, pushed the median sales price up 103.7% since March 2012.
  • The demand for housing is due to three factors: economic development, inventory pressures, and new residents moving into the Boise Region.
  • The actual median sales price in both counties continues to trend upwards, but the rate at which it does has slowed down, keeping affordability in check for most. Keep in mind, slowing price gains do not mean actual prices will decline.

2017

  • With a strong employment outlook and expected population growth, the Boise Region should continue to enjoy a strong and growing real estate market.
  • Inventory is needed in all price points in all communities, especially among homes priced below $250,000 — don’t wait for spring!
  • While the lack of inventory is the primary factor delaying many first-time homebuyers (FTHBs), for some it may be student loan debt and/or rising rents. Down payment assistance or grant programs may help offset this.
  • Buyers and builders may begin looking for options at the edges of Ada County, throughout Canyon County, and beyond, however, this may begin to affect commute times in and around the Valley.

 

Analysis

In 2015, Ada County surpassed $2 billion in total dollar volume sold. The first year since 2006. In 2016, the total dollar volume sold in Ada County was $2.95 billion. Up 20.2% from 2015 as more homes sold at overall higher prices.

In June 2016, Ada County’s median sale price reached $253,000 — 2% higher than the previous peak in July 2006. Then, as of December 31, 2016, there were only 1,490 homes for sale in Ada County, 10.5% less than the previous record low of 1,664 from January 2013. This was mostly due to a lack of existing inventory, at just 1.1 months of supply in December 2016. (More at boirealtors.com/existing-housing-inventory-hits-record-low-boise-region.)

Looking at 2016 overall, the median sale price for Ada County landed at $244,900 — up 6.9% from 2015.

In Ada County, prices and inventory rose and fell together between 2004 and September 2012. But since then, inventory has not kept up with demand, down 28.8% from September 2012, pushing the median sales price up 40.0%. It’s a classic example of supply and demand… home prices rose because of consumer demand versus limited supply — not speculative investing and building as was often the case a decade ago.

Slide8

In Canyon County, the 2016 median sale price was $160,000 — up 11.2% from 2015. The median sales price and inventory rose and fell together between Jan 2004 and Sept 2012.

Since then, inventory has not kept up with demand and is down 11.5%. Low inventory plus more, higher-priced new construction pushed the median sales price up 103.7% since March 2012. Inventory was 7.6% higher than the previous record low of 751 in February 2016, and the median sales price was 2.9% lower than the record high of $170,000 from January 2007.

Slide 10

Why so much demand for housing in the Boise Region? Economic development, inventory pressures, and demographics.

Wins in local and statewide economic development thanks to groups like the Boise Valley Economic Partnership (BVEP) and Idaho Commerce are bringing more jobs to our market. And through the efforts of Visit Idaho and local convention and visitors bureaus, there’s a growing interest in our city and lifestyle, attracting residents from higher-priced, nearby markets like Denver, Salt Lake City, Los Angeles, Seattle, and Portland.

 Slide23

Looking at inventory, there seems to be three things that have brought us to historically low levels.

One, some homeowners are choosing to stay in their homes longer, or, are hoping to buy before they list.

Two, some homeowners may have regained enough equity since the recession to “break-even” if they sold, but not enough for a down payment to buy their next home.

Slide16

 And three, there is not enough lower-priced new construction to keep up with demand, or, to make up for restricted supply of existing homes.

Slide17

The demographic (or people) trends we’re seeing include millennials “aging-into” homeownership nationwide, and they are the largest generation in terms of total population. In Idaho and the Boise region, we have a strong 10-year employment outlook which should provide income stability, helping consumers feel confident about purchasing a home. And overall, the Boise Metro’s population is expected to grow 30% by 2020, to 850,000 people.

Slide22

As prices have risen, so have questions about affordability, especially as mortgage rates and student loan debt track up.

Year-over-year changes in the median sales price, existing and new construction combined, generally followed changes in monthly 30-year fixed conventional mortgage rate, except between 2012-2013 when rates dropped, helping to drive more home sales at higher price points. While actual mortgage rates continue to hover near historic lows, they have started trending up. While this may not affect affordability for all buyers, it may limit purchasing power for some, especially at lower price points.

Further, NAR research suggests 71% of renters (first-time homebuyers) and 31% of move-up buyers (current homeowners) surveyed nationwide may be delaying a home purchase by 1-3 years due to their student loan debt.  If those moves had not been delayed, using national figures from 2015, annual home sales could have grown by 2%, and in turn, increased total inventory by 6-7%. While this isn’t a large share of the market, it is further impacting first-time homebuyers desperately seeking inventory. Yet, economists at the Cleveland Fed say despite student loan debt rising, “the average student debt burdens are more than offset by students’ average financial gain in the long-term.”

REALTOR.com® anticipates U.S. home prices will grow 3.9% in 2017 compared to 2016, with slowing price appreciation in most markets. We’re already seeing a slow-down in year-over-year median sales prices each month, in both Ada and Canyon Counties. So even though the actual median sales price continues to trend upwards, the rate at which it does so is slowing down. This should hopefully offset any increases in the mortgage rate that occur in 2017, keeping home prices affordable for most buyers.

Based on research from RealtyTrac, the Boise Region remains affordable for most, especially compared to the U.S. overall. RealtyTrac estimated that the percent of wages needed to purchase a home in Ada County was 40.4% in Q4-2016, nearly even with a year ago. For Canyon County, the percent of wages needed to buy a home was estimated at 37.2% in Q4-2016, up 6.5% from last year. Many economists and analysts calculate the amount of home one can afford based on 28-36% of wages, so while affordable compared to the nation, most households will have to allocate more of their income to housing, based on the growth in home prices.

Average monthly rental rates have continued to increase in both Ada and Canyon Counties, and in 2016, at similar rates to residential real estate. Using comparable year-to-date figures, Ada County’s 2016 median sales price was up 6.9% from the same period the year before, while the average rental rate was up 7.0%. Canyon County’s 2016 median sales price was up 11.2% over 2015, while the average rental rate was up 10.3%.

Slide32

Vacancy rates were also down year-over-year. Ada County’s rental vacancy was estimated to be 2.6% in 2016, down 18.5% from 2015, and in Canyon County, the rental vacancy rate was estimated at 2.7%, down 28.9%.

The shortage in rental options is pushing up rental rates, just as with home purchases. The result, though, for those renters planning to purchase, means that as more of their monthly income goes towards rent, it’s potentially less they can save towards a down payment, further delaying a purchase.

Boise is noted in a report called the “Housing Trilemma,” showing it has the quality of life and economic strength residents’ desire, but it may be becoming unaffordable for some.

 

Slide33

The reason offered by the report echoes what we’re seeing in inventory: “As people flock to cities [with] economic opportunities and a high quality of life, the increased demand for housing makes rents and property prices spike.” To meet demand and help with affordability, more housing options and rental/purchase assistance programs are needed, especially for young and first-time renters and buyers, to “offset the premium required to live in a popular place.”

 

What’s on tap for 2017?

REALTOR.com® anticipates U.S. home prices will grow 3.9% with slowing price appreciation in most markets. This means that even though the actual median sales price should continue to trend upwards, the rate at which it does will slow down.

We’ve already seen this happen in Ada and Canyon Counties, and while the rate at which prices appreciate should continue to stabilize, we could see home prices in Ada County increase on average 6.5% through 2017, and by 5.9% in Canyon County, based on trends since 2013 when prices and inventory trends diverged. *

*No promises.  Past performance is not an indicator of future success. 🙂

Slide37

Higher home prices paired with potential mortgage rate increases could affect affordability for some, but shouldn’t make housing unattainable for most — especially if year-over-year price gains continue to even out or slow down. Again — slowing price gains do not mean actual prices will decline.

Our market should be able to support the estimated price gains as the local labor market improves, and as more people move in from nearby, higher-priced markets.

Inventory is needed at all price points in all communities, especially among homes priced below $250,000. While buyer demand does fluctuate some due to seasonality, it’s been quite consistent year-round for some time, so the idea of “waiting for spring” is not necessary in our current conditions.

While the lack of inventory is delaying some FTHBs, others may be on hold because of student loan debt rising rent and mortgage rates. Down payment assistance programs and grants may be key, and potential homebuyers are encouraged to connect with lenders and their REALTORS® early in the process to understand their options.

Speaking of affordability, more buyers and builders will look for options at the edges of Ada County, throughout Canyon County, and beyond, however, we may see commutes tick up as a result. Based on current conditions, the local economy should be able to support additional price increases as the labor market improves, and as more people move in from nearby, higher-priced markets.

Should there be major, national economic changes that impact residential real estate, they will likely affect the large metro areas first, giving us time to prepare for any shifts. But a “shift” may not be a swing back to a recession… but back to a balanced market. The key: more inventory.

Throughout 2017, we should continue to enjoy a strong and growing real estate market across the Boise Region but we’ll continue to watch affordability and inventory.

Download 2016 Year-End Market Report stat sheets for Ada and Canyon County.

2016 Ada County Residential Real Estate Market Report Stats Sheet2016 Canyon County Residential Real Estate Market Report Stats Sheet

Want more stats? Have Questions?

Visit boirealtors.com/category/market-info 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.

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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.