RECORD ADA COUNTY HOME PRICES TEMPERED BY LOW MORTGAGE RATES
Key Takeaways:
- The median sales price for Ada County reached a new record of $354,405 in June 2019. This was up 10.0% over the same month last year.
- Ada County home prices continue to be driven by a decreasing supply of lower-priced existing homes compared to demand, new homes selling at overall higher prices due to rising construction costs, as well as increased purchasing power due to low mortgage rates.
Analysis:
Home prices have continued to climb in Ada County, reaching a record median sales price of $354,405 in June 2019. This was up 10.0% over the same month last year. The median sales price for both existing and new homes were also at record highs in June, at $339,945, and $419,040 respectively. While we can’t point to any one factor for the hike in prices, we have identified three reasons we’re seeing these types of numbers in Ada County.
There continues to be a shortage of housing, particularly in the lower price points. This has caused the share of higher-priced home sales to continue to rise, further driving up the median sales price for the existing segment, as well as the market overall. The uptick in existing inventory of 13.2% year-over-year in June was no match for the fact that we’ve seen demand consistently outpace supply for the last several years, as indicated by the fact that the Months Supply of Inventory (or MSI) was 1.1 months in the existing segment. A balanced market—not favoring buyers or sellers—is typically between 4-6 months of supply.
As we’ve noted previously, the rise in new construction home prices is due to the increasing costs of land, materials, shortage of skilled labor, as well as consumer preferences. A recent report from the National Association of REALTORS® (NAR) says that, “Job openings in construction in May 2019 outpaced the number of workers looking for construction jobs.” This shortage of workers has hampered housing starts nationwide and has an impact on the type of product and at what price point builders are able to build.
Yes, prices are up, but low mortgage rates are helpful for buyers and may also be influencing what homes buyers purchase and at what price point. Since lower rates equates to lower monthly payments, buyers may be selecting a more expensive home that still fits their budget. Low mortgage rates also fuel demand for housing, as those who have been waiting for rates to drop to start shopping for homes.
We’ll be taking an in-depth look at these trends and additional data for Ada County in our forthcoming mid-year market report. It will also touch on buyer and seller demographics, challenges, and a comparison of today’s market and our previous peak in 2007.
JUNE 2019 ELMORE COUNTY HOUSING MARKET UPDATE
As of June 2019, the median sales price for homes in Elmore County reached $169,744; an increase of 10.9% compared to the same time last year and a new record high. Due to the smaller number of transactions that occur in the area, we use a rolling 12-month median sales price to get a better idea of the overall trends. Prices continue to be driven home buyer demand and persistently low inventory.
Speaking of low inventory, June marked 53 months of consecutive year-over-year declines in inventory — leaving 69 homes on the market at the end of the month, down 17.9% from June 2018. The Months Supply of Inventory (or MSI) in Elmore County dropped to 1.3 months — down 23.5% from the same month last year.
The MSI metric measures the relationship between pending sales (which measures buyer demand) and inventory (which measures supply). A balanced market— not favoring buyers or sellers — is typically when MSI is between 4-6 months of supply. MSI below four months is usually more favorable to sellers, while MSI above six months is usually more favorable to buyers.
There were 51 closed sales in Elmore County last month — up 27.5% from the same month last year. Homes that closed in June spent an average of 47 days on the market before going under contract, 62.1% slower than in June 2018 when the average days on market was 29.
We’ll be taking an in-depth look at these trends and additional data for Elmore County in our forthcoming mid-year market report. It will also touch on buyer and seller demographics and the unique circumstances of the area’s housing market.
JUNE 2019 GEM COUNTY HOUSING MARKET UPDATE
As of June 2019, the median sales price for Gem County was at $214,000, an increase of 11.3% over the same period last year. We use a rolling 12-month median sales price to get a better idea of the overall trends due to the smaller number of transactions that occur in the area. Home prices have been driven by persistently low inventory versus demand.
There were 18 homes sales in June, down 18.2% from June 2018, and down 52.6% from last month. However, there were 56 pending sales, up 7.7% from a year ago, so we’ll likely see those sales close in the next month or two. This left 50 homes available for sale at the end of the month, down 31.5% year-over-year.
Pending sales (or homes under contract) measures buyer demand, while inventory (or homes for sale) measures supply. The relationship between these two metrics is reported as Months Supply of Inventory (or MSI), which was at 1.3 months in June 2019, down from 2.3 months a year ago.
A balanced market — not favoring buyers or sellers — is typically when MSI is between 4-6 months of supply. MSI below four months is usually more favorable to sellers, while MSI above six months is usually more favorable to buyers.
Although home sales were down a bit, the homes that are selling are selling fast. The homes that sold in June spent an average of 18 days on the market before going under contract, so buyers need to be prepared to move quickly when shopping for home in Gem County.
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, Elmore 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, Elmore County and Gem County. Since Canyon County is not part of BRR’s jurisdiction, we do report on Canyon County market trends. Members can access Canyon County snapshots and reports in the Market Report email, or reach out to us directly at cassie@boirealtors.com or annie@boirealtors.com.
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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. 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).
