For years now, Boise Regional REALTORS® has reported on how the demand for homes has outpaced supply and the impact that has had on home prices. October 2020 was no exception as the median sales price for homes sold in Ada County was $406,684 in October, up 14.7% year-over-year, but down slightly from September 2020.
This was based on 1,112 home sales, an increase of 11.9% compared to October 2019. But looking at the supply of homes for sale, according to data from the Intermountain MLS (IMLS), there were 443 of single-family homes available for purchase at the end of October, down 73.7% compared to the same month last year.
This begs the question, “How can home sales be up while inventory continues to drop?”
It’s important to note that the inventory metric fluctuates daily and is based on the number of homes listed as “active” in IMLS on any particular day. For consistency purposes, our reports use the number of single–family homes available for sale on the last day of each month, so it does not represent the total number of homes that may have been available for sale throughout the month; however, the closed sales metric reflects all homes sold during the month.
That one day “snapshot” of inventory compared to a monthly total of sales is one reason we can see more closings than available inventory in our monthly reports.
Adding to that, once a seller accepts an offer, the home is no longer considered available inventory. With homes spending an average of only 20 days on the market before going under contract, some may not make it into the reported inventory numbers.
Looking specifically at inventory trends for existing/resale properties, there are a variety of reasons the supply has been so constricted: homeowners delaying listing until they find their next home, which takes longer due to already limited inventory; some homeowners may not feel they can “trade up” from their current home due to current prices, despite equity and low mortgage rates; the surge in mortgage refinancing may have reduced some homeowners’ monthly payments, making it more affordable compared to what they may spend on another home; and in response to COVID-19, some have delayed listing to limit the number of people in their home, or, they may be unable to manage a sale while working from home or if they have children at home for school.
These kinds of situations are when a REALTOR® can be incredibly valuable to a homeowner in helping them understand their options. Discussing new construction opportunities for those worried they won’t be able to find their next home, or explaining how virtual open houses and showings can limit in-person visits while still exposing the home to the widest pool of potential buyers can help homeowners find a path forward.
New construction inventory was also down significantly, year-over-year, while sales were up by 16.7%. With new homes selling almost twice as fast this year than last year, similar to existing homes, it reduces the numbers captured in our monthly inventory snapshot. But as many builders have had to alter their construction timelines, with fewer tradespeople or difficulty obtaining materials (including home appliances) causing delays, some have also delayed when or how they list a home as available in IMLS. Some builders are able to pre-sell units through model homes, which then later show up in our reports as a closed sale but never as active inventory.
The low inventory conditions have put tremendous demand on builders, and they have been responding. Between January and September of this year, 3,374 permits were approved for new single-family homes throughout Ada County, according to Construction Monitor, and another 380 permits were approved in October. While a few of the newly approved permits were for existing owners, most were for homes that will be available for purchase in the coming months.
Again, this is where working with a REALTOR® is so important for home buyers. They can help guide you through the complex process of a new build, and often, can identify new construction options before the ground has even been broken, or, for existing homes, they may have insights on those that may be getting ready to sell. So, while inventory remains low compared to demand, higher year-over-year sales show that there are properties available to be purchased.
NOTE: While this month’s report provided an explanation on our inventory metrics, even with the variables that affect the monthly counts, the information from IMLS remains the most complete and reliable database for tracking our local housing market, helping home buyers, home sellers, and their REALTORS® make the best decisions for their unique situations.
In October 2020, the median sales price for homes in Elmore County reached $231,475, an increase of 19.5% compared to the same time last year. 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. Home prices continue to be driven by a lack of housing supply compared to demand.
There were 46 closed sales in Elmore County last month — down 8.0% year-over-year. Of those sales, 44 were existing/resale homes, and two were new homes. This left 25 homes available for purchase in Elmore County at the end of October, a decrease of 69.5% from October 2019.
The Months Supply of Inventory (or MSI) in Elmore County was 0.6 months — down 62.5% 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.
Elmore County needs more listings in order to bring the market back into balance. Understandably, some sellers may be hesitant to sell, whether due to COVID-19 or uncertainties around timing the purchase of their next home while selling their current one.
However, these are the kinds of situations where a REALTOR® can be incredibly valuable to a homeowner. New construction may be an option for those worried they won’t be able to find their next home, or, virtual open houses and showings can limit in-person visits while still exposing the home to a wide pool of potential buyers.
Home sales picked up in Gem County with 31 properties closing in October 2020, an increase of 47.6% compared to the same month in the year before, and an increase of 6.9% over September 2020.
The median sales price was $309,750, up 31.9% from the year before. 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 by historically low inventory and persistent demand. Inventory levels were down year-over-year with 34 homes available for purchase at the end of the month, a 41.4% decrease from October 2019.
One way to measure the supply vs. demand relationship is by using the Months Supply of Inventory metric (or MSI) metric, which measures compares pending sales (buyer demand) to and inventory (supply). A balanced market — not favoring buyers or sellers — is between 4-6 months. In October 2020, Gem County’s supply of inventory was at one month.
Inventory is needed across the board, but demand is especially high for existing homes. Prices have risen, so homeowners may have more equity than they realize. If you’ve considered selling, contact a REALTOR® to understand your options based on sales of homes similar to yours.
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, City Statistics, and Condos, Townhouses, and Mobile/Manufactured Homes Market Reports. Each includes an explanation of the metrics and notes on data sources and methodology.
Ada County
Canyon County
Elmore County
Gem County
Condos…
City Statistics
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 don’t report on Canyon County market trends. Members can access Canyon County snapshots and reports as well as weekly snapshots in the Market Report email, or login to our Market Statistics page.
In addition to the market reports and analysis BRR sends members each month, we send press releases to local media contacts in order to promote the local market expertise that REALTORS® bring to every transaction. BRR’s market report data and/or interviews are featured in the following articles. Feel free to share with your clients, adding your own analysis and comments.
- Ada Co. home prices dip slightly – demand remains strong from BoiseDev
- Median price for homes sold in Ada County tops $400,000 for 2nd month in a row from KTVB
- Boise home prices continue to rise, supply continues to fall from IdahoNews.com
- Ada house prices drop slightly but home sales still up from Idaho Business Review
- Home sales, prices continue to rise in Gem County from the Emmett Messenger Index
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Boise Regional REALTORS® has a variety of resources about mortgage assistance, unemployment assistance, how to avoid scams, and more, under the Resources for Property Owners and Resources for Renters sections of BRR’s Coronavirus Response website.
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 boirealtors.com/connect/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.
REALTOR® is a federally registered collective membership mark which identifies a real estate professional who is member of the National Association of REALTORS® and subscribes to its strict Code of Ethics.
