2017 Residential Real Estate Market Report

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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.

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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”):

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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.

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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.

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.

 

$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.

Many Reasons for Lack of Entry-Level Housing Inventory in Ada County

October 2017 marks a full three years of falling inventory, specifically in the number of existing homes for sale in Ada County. October 2017 marks a full three years of falling inventory for existing homes in Ada County. Click To TweetThere were 1,023 existing homes for sale in Ada County in October 2017, down 8.3% from October 2016, and down nearly 40% from October 2014 when the decline began.

There are many reasons the Boise Region is facing a lack of homes for sale—particularly for those priced below $250,000.

  • The most obvious reason for the increased demand for housing, overall, is the local population growth.
  • The combination of low mortgage rates and rising rents often make purchasing more affordable than renting.
  • Builders—especially those setback by the recession—haven’t kept up with the demand for lower- to-mid-priced homes, and increasing costs for labor, land, and materials won’t allow many to do so anytime soon.
  • Many municipalities’ existing planning, zoning, and permitting rules can’t manage the influx of project requests, further slowing down potential housing development, even those projects a city may want to approve.
  • The availability of lower-priced homes is further limited by people choosing to stay in their homes longer—10-year median today vs. 6 years in 2012— rather than moving up in price point and freeing up entry-level properties for first-timers.
  • When lower-priced homes do become available, investors can often outbid buyers and then flip the property to a higher price point, or turn it into a higher-priced rental property.

So how do we break out of this low inventory cycle and reach a more balanced market? While there are no simple answers, a collaborative approach between property owners, builders, REALTORS®, and policymakers, is our best bet.

 Property Owners

Homeowners and investors who purchased at the bottom of the market—right around January 2012—or who wanted to sell during that time but couldn’t afford to do so, should talk to a REALTOR® to understand their true market value, estimate their equity position, and better understand their options.

For those who are able to move up in price point or purchase new construction may be pleasantly surprised at the inventory that is available.

Investors who own single-family rentals may find that it’s a great time to get those properties back on the market, perhaps adding larger multi-family units or commercial properties to their portfolio, or using the proceeds to make improvements to other properties.

 REALTORS®, Builders, and Policymakers

Together, REALTORS®, builders, and policymakers must evaluate local ordinances and zoning, planning, and permitting processes, the costs associated with developing land and infrastructure, and the long-term plans we have for our community, to collaboratively plan for and build homes that strengthen and support the growth of our area, while also protecting the quality of life we all enjoy.

With a mix of carefully planned new construction development, and incremental inventory added by current property owners, we can hopefully stave off affordability concerns by bringing balance back to the market.

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

CANYON Snapshot - October 17

 

 

 

 

 

 

 

 

Download print quality snapshots for Ada County and Canyon 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.

Is it a Seller’s Market for Everyone? A Tale of Two Homes in Ada County

A recent USA Today article discusses how high demand and low supply have made it a seller’s market,  especially for lower-priced homes. However, “that does not mean every house will sell or sell quickly.”

Sellers can still overprice in a competitive housing market if they don’t work with a REALTOR® to provide them with the most current and accurate data specific to their home.

The Boise Region is certainly experiencing that high demand, low supply dynamic; however, there is a segment of the market that is quite balanced and potentially susceptible to overpricing.

To get a local look at this national trend, we analyzed Ada County data from September 2017 — percent of original list price received, supply of inventory, and days on market — for existing homes priced below $250,000 and above $700,000.

In Ada County, the percent of the original list price received at closing was 97.9%, on average for existing homes across all price points. This means that sellers reduced their price after listing or through negotiations with a buyer by about 2%.

A Tale of Two Ada County Homes

Taking a closer look at different price points, though, we see that existing homes listed at or above $700,000 received 90.3% to 94.8% of their original list price in September 2017. Compare that to existing homes listed at or below $250,000, which received 99.0% of their original list price, on average.

This makes sense when looking at supply by price point. As of September 2017, existing homes listed at or below $250,000 only had 0.6 months of supply, meaning buyers have to compete for homes with strong offers and are limited on what they can negotiate on, in most cases.

Compare that to existing homes listed at or above $700,000 or more, where there was at least 5.6 months of supply in September 2017, reflecting a more balanced market. As indicated by the percent of original list price received numbers, because buyers have more to choose from at this price point, they also have more room to negotiate on price.

The article notes that, “If a listing is overpriced and sits on the market for too long, it gets stale. Potential buyers will see the time on market and click past your listing, often without even looking at it.”

In Ada County, the average number of days between when an existing home was listed and went under contract — referred to as “days on market” — was at 25 days in September 2017, down 5 days from September 2016.

But again, looking at the top and bottom price points as of September 2017, existing homes listed at or above $700,000 spent an average of 60 days or more on the market, compared to just 14 days, on average, for homes listed at or below $250,000.

“Every market, city, neighborhood, and home will be different, even within the price points cited,” said Katrina Wehr, 2017 President of Boise Regional REALTORS® and Associate Broker with Keller Williams Realty Boise. “Which is why we always recommend home buyers and sellers work with a REALTOR® to get the most current and accurate information specific to their situation.”

 

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This report is provided Boise Regional REALTORS® (BRR), which 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 information is based on data from IMLS as of October 31, 2017, for existing, single-family homes sold in September 2017 as reported to IMLS. 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, multi-family properties (like apartment buildings), or new construction single-family homes. IMLS data is 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. 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

 

 

 

 

 

 

 

 

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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 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.

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.