August 2018 Market Report

MORE NEW CONSTRUCTION SALES DROVE
ADA COUNTY HOMES PRICES HIGHER IN AUGUST

Key Takeaways:

• The median sales price for Ada County reached a new record in August 2018, of $334,400 for existing and new homes combined. This was up 20.3% over the same month last year, and up 4.8% from July.
• Local home prices are being driven by the persistent and historically low inventory of existing homes compared to demand, and more new homes selling at overall higher prices, primarily due to rising construction costs.
• In August 2018, the median sales price of existing homes in Ada County reached $309,200 — a new record — up 9.0% over August 2017. This number mostly reflects homes that went under contract in June and July — when we had the fastest market times on record — indicating that many buyers offered higher prices to be competitive in the face of high demand for the persistent low inventory.

Analysis:

The median sales price for Ada County reached a new record in August 2018, of $334,400 for existing and new homes combined. This was up 20.3% over the same month last year, and up 4.8% from July.

As we’ve shared many times through our market reports, local home prices are being driven by the persistent and historically low inventory of existing homes compared to demand, and more new homes selling at overall higher prices, primarily due to rising construction costs.

On average, the share of monthly homes sales that are new is typically between 22-23%, meaning the other 77-78% of the sales are of existing homes. When the share of new home sales goes over 24% or 25%, we will see overall home prices (looking at existing and new homes together) increase, on average, between 12-14% year-over-year. As the share of new home sales increases, so does the overall median sales price.

This is what’s meant by “overall home price being driven up by more new homes selling.” To further illustrate this trend, the table below shows the share of new home sales for the five months this year in which we’ve had record high prices:

Month	Share of Sales that were New Homes	Overall Median Sales Price	YOY % Change
Mar 2018	30.7%	$308,950	+23.6%
May 2018	28.0%	$305,000	+16.4%
Jun 2018	26.7%	$324,647	+18.5%
Jul 2018	25.2%	$319,000	+18.2%
Aug 2018	26.8%	$334,400	+20.3%

 

But new home prices are just half of the story.

In August 2018, the median sales price of existing homes in Ada County reached $309,200 — a new record — up 9.0% over August 2017. This number mostly reflects homes that went under contract in June and July — when we had the fastest market times on record — indicating that many buyers offered higher prices to be competitive in the face of high demand for the persistent low inventory. Inventory is needed in all prices points, and that’s eventually what will help our market come back in to balance.

In comparison, the median sales price for new construction was at $386,470 in August 2018, up 8.6% over August 2017, and the most recent record high for the new home segment was $393,705 in June 2018.

If our market conditions of low inventory and high demand continue, there is no guarantee we’ll see prices drop significantly over the next few months.  However, those thinking about selling or buying shouldn’t be concerned with ‘timing the market,’ because the best time to buy or sell is when it fits your needs and circumstances. If you’re thinking about making a move, talk to your REALTOR® to explore your options.

HOUSING INVENTORY DROPS AGAIN IN
GEM COUNTY WHILE DEMAND REMAINS STRONG

In August, we saw the supply of Gem County homes drop 5.3% from the month before. August also marked the 45^th month of consecutive year-over-year declines in the overall (existing/resale and new construction combined) supply of housing for Gem County.

However, the lack of inventory didn’t deter sales — or prices. Closings were up with 42 homes sold in Gem County, an increase of 55.6% from August 2017. The median sales price for homes that sold in Gem County was $195,489 in August, based on activity over the past 12 months — up 12.3% over the same period last year.

A persistently low supply of homes is only half of the story, the other factor is demand. Looking at the supply-demand ratio of months supply of inventory — which takes the number of homes for sale divided by the average number of sales by month — there were 1.9 months in August 2018, down 20.8% from August 2017. A balanced market—not favoring buyers or sellers—is typically between 4-6 months of supply. Homes that closed in August spend an average of 22 days on the market before going under contract, 24.1% faster than in August 2017, and another indication of strong demand.

Based on activity in both existing/resale and new construction homes over the past 12 months, the median sales price for the city of Emmett was at $189,900 in August, a gain of 1.7% over the same period last year. Home sales were also up with 35 homes sold in August 2018, compared to 22 in August 2017, an increase of 59.1%.

With these market conditions of low inventory and high demand, homes are selling fast. If you’re thinking about making a move, work with your REALTOR® to understand your options and be ready to make an offer quickly when the right home comes on the market.

RESOURCES:

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

Download the latest (print quality) market snapshot graphics for Ada County, Ada County Existing/Resale, Ada County New Construction, Canyon County, Canyon County Existing/Resale, Canyon County New Construction, and Gem County.

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

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

The data reported is based primarily on the public statistics provided by the IMLS, available at: intermountainmls.com. These statistics are based upon information secured by the agent from the owner or their representative. The accuracy of this information, while deemed reliable, has not been verified and is not guaranteed. These statistics are not intended to represent the total number of properties sold in the counties or cities during the specified time period. The IMLS and BRR provide these statistics for purposes of general market analysis but make no representations as to past or future performance. The term “single-family homes” includes detached single-family homes with or without acreage, as classified in the IMLS. These numbers do not include activity for mobile homes, condominiums, townhomes, land, commercial, or multi-family properties (like apartment buildings).