Strong Spring Housing Market Doesn’t Mean Sellers Can Overprice

Tight inventory continued to push home prices up in March 2016, and sales remained strong.

In March 2016, the median sales price of all single-family homes in Ada County, as tracked by the Intermountain MLS, was at $234,950, up 5.4% compared to March 2015. The median sales price of existing single-family homes was $215,000, up 2.4% year-over-year; the new construction median sales price was $296,000, up 4.8% year-over-year. There were 788 closed sales in Ada County in March 2016, up 13.5% from March 2015.

In Canyon County, the median sales price of all single-family homes was $156,150, up 16.1% from March 2015. The median sales price of existing single-family homes was $149,900, up 15.3% year-over-year; and the new construction median sales price was $197,800, up 13.0% year-over-year. There were and 356 closed sales in Canyon County, up 21.5%, over the same month last year.

For sellers, it’s easy to want to list higher when there is so much buyer demand “just to see” what they could get. Sellers who want to test the market with a higher price may tell their agent they will “let the buyer talk them down on price” or that they’re hoping for multiple offers over asking price like “their friend had, just one day after listing.”

There were a few spots in the region where this was the case last month. In Northeast Boise (IMLS Area 0200), on average, existing homes sold for 102.0% over asking, and in Southeast Meridian (IMLS Area 0100), existing homes sold for 103.7% over asking, on average. In both Ada and Canyon Counties, most newly constructed homes sold at or above asking price in March 2016, often because of upgrades.

While it may feel like every house sells over asking price in just one day, that’s not the case overall.

Existing homes in Ada County neighborhoods sold, on average, between 93.6% (Meridian SW 1010) and 98.8% (Boise N 0100) under asking price. Existing homes in Canyon County neighborhoods sold, on average, between 81.3% (Wilder 1293) and 99.8% (Nampa S 1260) under asking price.

Carey Farmer 2016 President

These numbers are still very positive for sellers, but serve as a benchmark for the research provided by their REALTOR®. Carey Farmer, 2016 President of Boise Regional REALTORS® and Broker Associate with Group One Sotheby’s International Realty, explains: “Our job is to present an accurate, current, and realistic view of the market to our sellers to attract the most buyers, and to work to ensure their selected offer will appraise.”

Even with high demand, buyers can sense when a home is not reasonably priced because they’ve toured a lot of homes and are doing their research online. But should a seller accept an offer that’s above market, there may not be recent, comparable sales to support the appraisal. In this case, the deal is on hold the seller and buyer can agree to a reduced price, or the buyer may cancel and move on.

This news may give some relief to buyers, but it does not mean offers can go too low. Just as they’ll do for sellers, REALTORS® will research comparable homes to help buyers determine a strong offer price that’s reasonable based on the market and (hopefully) acceptable to the sellers. While not every house may be in a multiple offer situation, if an offer is weak, the seller may decline. “If we have offer but more showings are scheduled in the next few days or hours, some sellers may wait, hoping for a better price or more favorable terms,” said Farmer. (“Terms” refer to earnest money, closing date, seller contributions, inspection contingencies, and other aspects of the offer.)

Both buyers and sellers must work closely with their REALTOR® to stay on top of market trends, to make sure offers and listings are the best they can be from the get-go.

# # #

March 2016 Market Summary

Activity from Intermountain MLS, a wholly-owned subsidiary of Boise Regional REALTORS®, as of April 11, 2016 for single-family homes, with existing and new properties, and all neighborhoods combined.

Metrics Ada County Canyon County
Mar 2016 YOY % Chg Mar 2016 YOY % Chg
Closed Sales 788 13.5% 356 21.5%
Median Sales Price $234,950 5.4% $156,150 16.1%
Days on Market 56 -13.8% 55 -19.1%
Pending Sales 1,590 24.2% 622 7.8%
Inventory 1.796 -17.4% 772 -28.0%
Months Supply 2.6 -27.8% 2.7 -35.7%

Additional information about trends within each county, and by price point, by existing vs. new construction, and by neighborhood, are now available in the March 2016 Market Report. This report includes an explanation of the metrics and notes on data sources and methodology.

Download and share the snapshot graphics for Ada County and Canyon County:

ADA Snapshot - March 2016 CANYON Snapshot - March 2016

# # #

 

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 3,600 members and two wholly-owned subsidiaries — the Intermountain Multiple Listing Service, Inc. (IMLS) and the REALTORS® Community 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.

Distributed to the media on April 12, 2016.

Pending Sales Indicate Strong Spring Market for U.S. and Boise Region

The National Association of REALTORS® (NAR) reported today that national pending sales (newly signed contracts) for existing homes reached a 7-month high in February 2016, up 3.5% SAAR compared to January 2016, and up 0.7% SAAR compared to February 2015. This is great news for the spring market as pending sales are a leading indicator of closing activity over the next 60-90 days.

This was reassuring after last week’s report that national existing home sales were down month-over-month, although year-over-year was up. NAR now seems to think the dip was a one-month anomaly, due primarily to bad weather across much of the country. Further, they do not think those closed sales figures were an indicator of how the 2016 spring market will play out, especially after today’s pending sales figures.

“Here at home, we did not experience a dip in closed sales in February, and pending sales activity was strong, well out-pacing national trends,” said Carey Farmer, 2016 Boise Regional REALTORS® President and Associate Broker for Group One Sotheby’s International Realty.

Pending sales for existing homes in Ada County were up 22.8% SAAR compared to January 2016, and up 6.5% SAAR compared to February 2015. In Canyon County, pending sales of existing homes were up 31.5% SAAR compared to January 2016, and up 12.3% SAAR compared to February 2015.

Visit boirealtors.com/category/market-info for more local insights from February 2016. Consumers looking to get real-time data specific to their situation are encouraged to contact a REALTOR® today.

NOTE: The figures in the NAR report include a seasonally adjusted annual rate (SAAR), not actual counts or averages, and highlight month-to-month figures. Also, these figures do not include new construction properties. At Boise Regional REALTORS® (BRR), we typically report actual counts or averages and year-over-year trends. Seasonally adjusted figures and month-to-month comparisons are helpful in gauging the pace of the market as it moves through the usual, annual cycle. In order to draw comparisons to NAR’s report, local numbers have been seasonally adjusted and will therefore differ from those that were reported in our most recent local market report. However, the overall trends remain the same.

NAR Says U.S. Existing Home Sales Fizzled in February but Boise Region Sales Remained Strong

 

NAR Says U.S. Existing Home Sales Fizzled in February
but Boise Region Sales Remained Strong

Key Takeaways:

  • Sales of existing homes were up in Ada County 19.5% and up 4.9% in Canyon County despite 7.1% decline nationwide between January 2016 and February 2016.
  • Nationally, tight inventory and increasing prices may be creating frustration and resistance towards purchasing, especially among first-time home buyers.
  • National statistics are great for bench marking, but local statistics and the insights of a REALTOR® are a consumer’s best bet for understanding their specific situation.

The National Association of REALTORS® (NAR) released their February 2016 Existing Home Sales report on Monday, causing concern that existing home sales nationwide were down 7.1% in February 2016 compared to January 2016. This was unexpected for the start of the spring selling season.

However, when looking at national home sales compared to last year, they were actually up 2.2% from February 2015. To give REALTORS® and their clients more insight into this trend, both month-over-month and year-over-year, and to compare these national trends to our local market, Boise Regional REALTORS® (BRR) offers this analysis…

NAR speculated that the general lack of inventory and the consistent gains in median sales price since last year may be causing frustration and possibly resistance towards purchasing, especially among first-time home buyers. “The overall demand for buying is still solid entering the busy spring season, but home prices and rents outpacing wages… are holding back a segment of would-be buyers,” says NAR’s Chief Economist, Lawrence Yun.

It’s supply and demand: there are fewer existing homes for people to choose from, and those that are available are becoming more expensive as prices are bid up by competing buyers. While our local market is seeing similar trends in inventory and price to the national numbers, our sales remained strong in February 2016 compared to January 2016 and February 2015.

  • As noted, sales of existing homes in the U.S. were down 7.1% SAAR in February 2016 compared to January 2016, but up 2.2% SAAR from February 2015. In Ada County, closed sales for existing homes were up 19.8% SAAR compared to January 2016, and up 6.1% SAAR compared to February 2015. Canyon County closed sales were up 4.9% SAAR in February 2016 compared to January 2016, and up 7.8% SAAR compared to February 2015.
  • Inventory of existing homes in the U.S. was up 3.3% SAAR in February 2016 over January 2016, but down 1.1% SAAR from February 2015. In Ada County, inventory was up 6.6% SAAR compared to January 2016, and was up 1.1% SAAR in Canyon County, as we moved into the spring selling season. However, inventory of existing homes in both counties continued to lag compared to February 2015. Ada County inventory was down 5.7% SAAR year-over-year, and Canyon County inventory was down 6.8% SAAR.
  • The median sales price of existing homes in the U.S. was at $213,800 (SAAR) in February 2016, up 8.2% SAAR over January 2016. In comparison, the Ada County median sales price was at $206,215 (SAAR) in February 2016, down 2.8% SAAR from January 2016, but up year-over-year 7.2% SAAR. In Canyon County, the median sales price was at $139,077 (SAAR), up 2.9% SAAR compared to January 2016, and up 7.5% SAAR compared to February 2016.

There will always be more volatility in the national numbers as they aggregate all markets. Yet despite seasonal ups and downs, the overall trend for closed sales and median sales price has gone up over the past few years, both in our local market and across the U.S. While national statistics are great for bench marking, local statistics are best for consumers looking for information specific to their situation.

Visit boirealtors.com/category/market-info for more local insights, or speak to a REALTOR®.

NOTE: The figures in the NAR report include a seasonally adjusted annual rate (SAAR), not actual counts or averages, and highlight month-to-month figures. Also, these figures do not include newly construction properties. At BRR, we typically report actual counts or averages, and year-over-year trends. Seasonally adjusted figures and month-to-month comparisons are helpful in gauging the pace of the market as it moves through the usual, annual cycle. In order to draw comparisons to NAR’s report, local numbers have been seasonally adjusted and will therefore differ from those that were reported in our most recent local market report. However, the overall trends remain the same.

February 2016 Inventory Near Records Lows

Low inventory was the recurring theme in market reports from Boise Regional REALTORS® (BRR) last year, but recently a new milestone was reached in 2016.

As of January 2016, there were only 1,695 homes for sale in Ada County; just shy of the all-time low of 1,668 in January 2013, based on records that go back to 2005. Looking at February 2016, that number improved slightly to 1,769 homes for sale, but was still a drop of 8.7% compared to February 2015.

Ada Hist Inv Feb 2016

 

The number of homes for sale in Canyon County in February 2016 was at 751, down 25.6% year-over year. The last time inventory in the county reached that point, was June of 2008. The lowest point on record was in July 2007 when inventory was around 560 homes for sale.

Canyon Hist Inv Feb 2016

Looking back to January 2014, at inventory levels by construction types for both Ada and Canyon County, you can see how new construction inventory has remained relatively stable, while existing inventory has fluctuated and fallen year-over-year:

Ada ExNC Inv Feb 2016

Canyon ExNC Inv Feb 2016

The pros and cons of tight inventory.

For sellers looking to move fast and get top dollar, low supply tends to make buyers eager to see homes as soon as they hit the market, make offers quickly, and compete on price and other terms. However, for sellers not sure where they want to move next, the prospect of becoming a buyer in this tight market is making many people think twice before listing.

“We desperately need inventory,” said Carey Farmer, 2016 President of Boise Regional REALTORS® and Associate Broker with Group One. “While many of my sellers want their homes to go quickly, they’re worried they’ll be without a place to live between closings. So, in addition to looking at resale options, I’m showing a lot of new construction where inventory is available. In some instances, we’re looking at short-term rentals as a backup option to potential construction delays, or to give them time to search if they prefer an existing property.”

Yet for sellers who are in the market, many are enjoying the increased prices that are a result of the low supply. In February 2016, the median sales price for existing homes in Ada County was up 7.8% year-over-year, to $212,950. The median sales price for Canyon County existing homes was at $176,114, up 18.5% year-over-year.

Where inventory is more plentiful.

In February, there was 6.0 months of supply of existing homes priced below $100,000 in Ada County, and supply was at 5.1 months or more for homes priced at or above $400,000. Interestingly, existing homes in Canyon County priced between $200,000-250,000, and then above $300,000, were available, filling the lack of inventory in those price ranges in Ada County.

However, inventory is constantly fluctuating. Buyers should seek the advice of a REALTOR® early in their home search to truly understand what’s available in their desired price point, and how fast things are moving.

In both Ada and Canyon Counties, new construction was available in most price points, again, making it a great option for sellers worried about competing in the resale market as buyers. Similarly, sellers with homes in the price points that aren’t moving quite as quickly, should connect with a REALTOR® to ensure they’re priced properly and staged well from day one.

Another way to look at the low inventory, is by analyzing why the demand is currently so high. We’ve discussed this in more detail in previous market reports, but in summary, population growth, in-migration, and low unemployment locally are key factors.

February 2016 Key Metrics

Looking at key metrics for February, closed sales, pending sales, and median sales price were up compared to a year ago, for all single-family homes, when all price points and construction types are combined:

 

 

Metric

Ada County Canyon County
Feb 2015 Feb 2016 % Chg Feb 2015 Feb 2016 % Chg
Closed Sales 509 571 12.2% 223 225 0.9%
Median Sales Price $224,900 $235,000 4.5% $140,000 $152,400 8.9%
Days on Market 67 57 -14.9% 77 59 -23.4%
Pending Sales 1,099 1,379 25.5% 488 579 18.6%
Inventory 1,938 1,769 -8.7% 1,010 751 -25.6%
Months Supply 3.8 3.2 -15.8% 4.4 3.1 -29.5%

Additional information about trends within each county, by price point, by existing and new construction, and by neighborhood, are now available in the February 2016 Market Report. Market snapshot graphics for Ada County and Canyon County are also available.

 

# # #

This report is provided by the Ada County Association of REALTORS® (ACAR), which began doing business as Boise Regional REALTORS® (BRR) in 2016. BRR is the largest local REALTOR® association in Idaho, with over 3,600 members and two wholly-owned subsidiaries — the Intermountain Multiple Listing Service, Inc. (IMLS) and the REALTORS® Community 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 makes no representations as to the past or future appreciation or depreciation of property values. 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 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.

 

Distributed to the media on March 12, 2016

The 2016 REALTOR® Awards Gala is March 4th!

BRR Gala See You Friday Image

6:00–7:30pm • Cocktail Hour (and a half!)
7:30–9:00pm(ish) • Dinner & Program
9:00(ish)—11:00pm • Dancing and Celebration!

Online ticket sales are now closed. Please contact Judy McLaughlin for assistance.

Are you a Gala VIP? All RPAC Major Investors get access to the VIP Lounge and will enjoy complimentary cocktails and appetizers. Invest online now or sign up on Friday. Email Miguel with questions. And… the online auction is open! Our largest one ever, with nearly 150 items with proceeds benefiting the BRR Community Foundation Grant Program.

 

 

Recruiting Do’s and Don’ts

 

Recently, I received a call from a member asking what brokers or their assistants are allowed to do (or not do) when recruiting agents. Specifically, they wanted to know about any Standards of Practice from NAR’s Code of Ethics, or any state license laws that pertain to agent recruitment.

dreamstime_xl_59870732Great question and I love when our members take the time to make sure they’re doing things the right way.

I reached out to IREC, NAR, and IR to get their input. In short, there are no specific regulations or rules regarding agent recruitment practices.

 

Jeanne Jackson-Heim, Executive Director of the Idaho Real Estate Commission (IREC) confirmed that Idaho’s license laws do not address agent recruitment, but, she said, if you feel a piece of the recruitment process or messaging being used is questionable, call IREC and discuss it with an investigator. They are a great resource in these situations, and would rather have agents get the right information than go after people for bad behavior. You can reach IREC at 208-334-3285 or visit their staff directory.

Kate Lawton, Manager, Professional Standards and Administration at the National Association of REALTORS® (NAR) sent the following: “Prior to 1982, the Code of Ethics required REALTORS® to advise other REALTORS® that they intended to solicit sales associates in the second REALTOR®’s firm. The applicable interpretive Standard of Practice (24-1) made it clear that the Code did not prohibit soliciting sales associates in other firms—it only required advance notice to the current employing broker. This obligation was widely misread, misunderstood, and misapplied as being a blanket prohibition on soliciting sales associates when that was never, in fact, the case. After years of trying to explain, clarify, and focus on what conduct was permissible and what was not, the NAR Delegate Body concluded that the appropriate course was to abolish then Article 24. There are no other provisions in the Code that speak specifically to agent recruitment.”

La Dawn Anderst, Chief Executive Officer of Idaho REALTORS® recommended two resources from NAR to help brokers with recruitment and retention: REALTOR® Magazine’s Recruitment Tool Kit and REALTOR.org’s Field Guide to Recruiting and Retaining Salespeople.

While we may not have state laws or national standards of practice, that certainly doesn’t mean we can’t operate with some common sense, good manners and professionalism. The following points are not official BRR positions, but rather, my two cents based on my experience as a former agent who was recruited a time or two…

 

Don’t disparage other brokers or business models (or ever). When I was a REALTOR®, there was nothing that turned me off more than when recruiters took a negative approach… telling me that my current company was terrible, or gossiping about my broker, concluding that I should leave them to join “their” company instead. Yuck. Maybe it’s just me, but I’d rather work with people who are fun and optimistic, not mean and disrespectful. As a recruiter, there is nothing wrong with sharing why you feel your model is the best, and how agents succeed by working with you. Just keep things positive and professional.

 

Be careful how you discuss commissions. If a recruiter said this to me: “We know your commission split is this… and we can offer you this…” my reaction was always: “You don’t know me!” (I said this to myself, but you get the idea.) While you might know the general commission structures offered by various brokers, each agent may have different agreements with their broker. While this isn’t quite an anti-trust issue, whenever you compare or discuss between different brokers, I get nervous. Sharing your commission plan is definitely part of the recruitment process, but agents can do the math between what they currently have and what you offer to determine what’s best for them.

 

Have more questions about agent recruitment or other business practices? Let me know! Part of the value in your Boise Regional REALTORS® membership is that we can find resources and provide insights to help you navigate all areas of your business. Call me at 208-376-0363 or email me at breanna@boirealtors.com anytime.

New Market Reports Show Strong Start for Housing in 2016

Boise Regional REALTORS® (BRR) is kicking off the year with new market reports that provide a more detailed view of the region’s housing market. Starting with January 2016 data, we will dig deeper into trends happening within price points, between existing homes and new construction, and highlight sales and price trends by city, while continuing to report county-level trends.

The new reports for Ada County and for Canyon County are now available here.

Carey Farmer, President of Boise Regional REALTORS® and Associate Broker at Group One Real Estate: “This new level of detail helps consumers understand the trends behind the trends, while also giving our REALTOR® members another tool to explain these market variations to their buyers and sellers.”

For example, looking at the Months Supply of Inventory metric for homes priced between $200,000-$249,999, as of January 2016, the demand for existing homes in Ada County far outpaced the supply, putting sellers in a great position to list. That said, buyers have a variety of options to choose from in new construction both in Ada and Canyon Counties.

“2016 started off much stronger compared to last year, both in price and the number of sales in most segments,” said Farmer. “I’ve encouraged many homeowners who are thinking of waiting until spring to list their homes, to talk to a REALTOR® now. As the January 2016 market report shows, there are huge opportunities for sellers in nearly every price point in Ada County, and especially for homes priced under $300,000 in Canyon County.”

Key metrics show increases in closed sales, pending sales, and median sales compared to a year ago for all single-family homes with all price points combined:

Ada County

Canyon County

Jan 2016

% Chg Jan 2016

% Chg

Closed Sales

459

7.7% 225

11.9%

Median Sales Price

$237,638

5.9% $146,000

15.0%

Days on Market

67

-4.3% 58

-22.7%

Pending Sales

1,109

27.9% 439

9.7%

Inventory

1,695

-11.5% 795

-23.2%

Months Supply of Inventory

2.7

-27.0% 3.1

-34.0%

 

Additional information about trends within each county, by price point, by existing and new construction, and by city, are now available at boirealtors.com/category/market-info. And download the monthly snapshot graphics for Ada County and Canyon County.

# # #

This report is provided by the Ada County Association of REALTORS® (ACAR), which began doing business as Boise Regional REALTORS® (BRR) in 2016. BRR is the largest local REALTOR® association in Idaho, with over 3,600 members and two wholly-owned subsidiaries — the Intermountain Multiple Listing Service, Inc. (IMLS) and the REALTORS® Community 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 makes no representations as to the past or future appreciation or depreciation of property values. 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 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.

 

Distributed to the media on February 12, 2016.

A Name in 2016!

How do Al Jolson, The Beatles, Wilson Phillips, and Adele connect to the association’s history? Loosely, but stick with me.

cover art

Each were top artists the years that we had a name change. Here’s a quick history:

  • 1920 — The association was founded as the Boise Realty Board and Al Jolson’s “Swanee” was all the rage.
  • 1964 — The Beatles topped the charts with “I Want to Hold Your Hand” and the name was changed to the Boise Board of REALTORS®.
  • 1990 — The name shifted to the Ada County Association of REALTORS® and Wilson Phillips encouraged everyone to “Hold On”… for one more day.
  • 2016 — And now, just a few weeks into 2016, we’re getting ready to change the name once again, this time to Boise Regional REALTORS®. All while Adele’s “Hello” is being played errywhere.

If you listen to these songs back-to-back, you can clearly hear how music styles changed over time, yet every song is focused on the same thing — relationships. Sort of like real estate. Business practices evolve and shift year-after-year, yet the agent-client relationship always remains central.

And as the business evolves, so must the association. Past name changes were done to incorporate the term “REALTOR®” or to represent the market’s expanding geography. Geography is part of this change, too. Our members don’t just do business in Ada County and our name must reflect the market in which they live and work. But beyond geography, this name change is being done with a focus on our members and the relationships they have with their clients.

First, re-introducing “Boise” into our name will allow us to tap into efforts by the Boise Valley Economic Partnership (BVEP) and the Visitors Bureau, as they work to “brand” our region in the minds of people across the country. Doing so will improve the association’s consumer outreach initiatives, done on behalf of our members. For example, when people move here, they likely start searching “boise homes for sale,” not “ada county homes for sale” — see:

boise vs ada cty searchSource: google.com/trends/explore; Data generated January 31, 2016.

Once consumers get a sense of what’s in and around Boise, they expand their search to surrounding cities, or narrow in on neighborhoods, looking for REALTORS® who can help them through the process.

Our new name will better connect with consumers during this process, providing them with information on the value that REALTORS® bring to the transaction, and facilitating connections between consumers and REALTORS® both online and in the community.

Also, a name change also allows us to refresh the strategic focus and “personality” of the association. (Like how we now make Wilson Phillips references in our blog posts!) Kidding aside, it’s an exciting time for the organization, and we’re looking forward to rolling out new programs throughout the year.

logo evolution

It will take some getting used to the new name, Boise Regional REALTORS®, or Boise Regional or “B-R-R” for short, so if you happen to refer to us as ACAR, it’s ok. It will also take us some time to catch all the old logos and name references on our website and other materials. We think we’ve found most of them, but if you find any, please let us know.

Finally, watch our website — boirealtors.com — and updated Facebook and Twitter profiles for some of the fun things we have planned to celebrate the new name throughout February and 2016.

2015 Residential Real Estate Market Report for Ada County

Download a PDF of the report here. This information was provided by the Ada County Association of REALTORS® (ACAR) in January 2016, based primarily on data from the Intermountain MLS (IMLS), a subsidiary of ACAR, and other sources as noted.

 

Report Highlights

  • Total dollar volume sold surpassed the $2 billion-mark for the first time since 2006.
  • Idaho was one of the top states for price appreciation and job growth in 2015.
  • Low inventory coupled with population growth is driving prices and demand.
  • Domestic migration from neighboring states—especially California—should continue in 2016.
  • Affordability looks favorable despite potential mortgage rate increases.
  • 2016 national real estate market met with “cautious optimism” by NAR.

 

2015 Residential Market Trends

2015 was another great year for real estate in Ada County. From January 1–December 31, there were 9,284 single-family homes sold, up 19.3% compared to the previous twelve month period. The growth was primarily driven by activity among existing homes, up 20.3% compared to the previous twelve month period.

Closed Sales

The median sales price of all single-family homes continued to rise, ending the year at $229,000, up 9.0% compared to the previous twelve month period. The median sales price for existing homes was at $213,000, an increase of 10.1% over last year—and welcome news for homeowners. The median sales price for new construction increased by 4.7% to end the year at $313,900.

Median Sales Price

This combination of sales activity and price brought the total dollar volume of homes sold to $2.45 billion. This was up an impressive 28.2% compared to 2014, and an increase of 32.0% over 2013. The last time volume went above the $2 billion-mark was 2006, which had a total dollar volume sold of $2.66 billion.

Total Dollar Volume Sold

As prices and volume returned to pre-downturn levels, the question of a market peak—or even another housing bubble—came up frequently last year. Based on the trends tracked by the National Association of REALTORS® (NAR), Chief Economist Lawrence Yun explained that the market today is very different than it was at the bottom (around 2009 nationally, and 2011 for Ada County) mostly because of the changes in mortgage lending and the decreasing numbers of homes for sale.

Mortgage lenders now follow stricter rules to qualify potential homebuyers, and many of the creative loan programs that were available before are no longer in use. This has helped diminish the risk of buyers getting into loans beyond their financial means, which caused many to lose their homes to foreclosure. Paired with improving jobs reports, we’re in a much better situation today, both financially and economically.

The supply of homes for sale has been well below consumer demand, nationally and in Ada County. The following charts illustrate the change in local inventory before, during, and after the downturn:

Historical Inventory Inventory

Overall inventory has been dropping due to the lack of existing homes being listed. Carey Farmer, President of the Ada County Association of REALTORS® and Associate Broker at Group One Real Estate, explains:

“We hope more homeowners will be in a position to sell in 2016, having regained equity after the downturn. I’ve talked with some potential sellers who are concerned that they won’t be able to find a home once they sell theirs. While it’s true we need more existing inventory to come online, our market actually has a good supply of newly constructed homes, which is not common across the country. New construction is a great option for those looking to move up in price point, square footage, or amenities.”

Months Supply

The “months supply of inventory” metric is a great way to gauge supply and demand, by taking the number of homes for sale at the end of a given month, then dividing that by the average number of closed sales by month, over the preceding twelve months. The result could be interpreted as the number of months it would take to sell through the current inventory if no other homes were listed. A balanced market—not favoring buyers or sellers—is typically between 4-6 months of supply. Based on the chart above, the buyer demand for existing homes is outpacing the supply, while new construction supply is on track with demand.

 

Population Growth is Fueling Housing Demand

Population growth across the state has been the main driver behind the demand for more housing. The Idaho Statesman reported that the state’s population grew by 1.2% from mid-2014 and mid-2015 making it the 12th strongest increase in the U.S. This was caused by a high birth rate and domestic migration—people moving into Idaho from other states. Obviously babies aren’t buying homes, but family expansion is a key reason why people decide to purchase a home. Looking at domestic migration, the Boise Valley Economic Partnership (BVEP) provided these stats in a presentation to ACAR:

Domestic Migration

Comparing these figures to the consumer traffic on intermountainmls.com, indicates that this domestic migration should continue throughout 2016. Web traffic came primarily from these cities (in order): Boise, Salt Lake City, Meridian, Twin Falls, Nampa, Eagle, Los Angeles, Caldwell, Denver, and San Francisco. Sessions from Los Angeles grew the most compared to last year, up 180%. Overall, year-over-year trends for users and sessions were up over 13% each, and page views were up by 39%.

Age Groups

These population trends don’t seem to be slowing down, and may be compounded by more Millennials becoming homeowners in 2016. Looking at another statistic from BVEP, 72% of those moving to Idaho were under the age of 50, and a large portion of those people were 21-40 years old, capturing some in Generation X and many in the Millennial Generation.

According to REALTOR.com, “Millennials emerged as a dominant force in 2015, representing almost 2 million sales, [and REALTOR.com expects this pattern to] continue in 2016… Two other generations will also affect the market in 2016: financially recovering Gen Xers and older Boomers thinking about or entering retirement. Since most of these people are already homeowners, they’ll play a double role, boosting the market as both sellers and buyers. Gen Xers are in their prime earning years and thus able to relocate to better neighborhoods for their families. Older Boomers are approaching (or already in) retirement and seeking to downsize and lock in a lower cost of living. Together, these two generations will provide much of the suburban inventory that Millennials desire to start their own families.” As noted earlier, that inventory from existing homeowners is definitely needed in our market.

 

Mortgage Rate Increases Haven’t Deterred Buyers

After the Federal Reserve announced they would raise the interest rate at the end of last year, it caused concern that mortgage rates would soon follow. Economists were quick to remind everyone that many factors determine where mortgage rates go, in addition to the federal interest rate. Case in point, days after the interest rate increase was announced, mortgage rates moved north of 4% and then dipped back below that mark at the start of January.

However, REALTOR.com recently reported that it expects 30-year fixed rates to “end 2016 about 60 basis points higher than they are [now, and note] that level of increase is manageable, as consumers will have multiple tactics to mitigate some of that increase.”

This is especially true for buyers at lower price points. While they may see some impact to their monthly mortgage payments, it shouldn’t make purchasing a home in 2016 unaffordable or unattainable.

There were 964 pending sales in December 2015, up 35.4% compared to December 2014. This bodes well for closed sales figures in the first quarter of 2016 since the pending sales metric is an indicator of future sales, as the homes under contract will likely close within the next 30-60 days.

Pending Sales

“The growth in pending sales shows that home buyers were not deterred by the news of a rate change,” said ACAR’s President, Carey Farmer. “I’m certainly seeing that with my own clients, as they continue to shop for homes and write offers.”

 

Cautious Optimism for Real Estate in 2016

Looking ahead to 2016, the National Association of REALTORS® (NAR) released their forecast, which can be described as “cautiously optimistic.” Chief Economist Lawrence Yun noted that the year hasn’t started out quite as strong as was expected because of a contraction in the manufacturing sector. This means that other sectors like real estate must perform well to continue economic growth.

Locally there was good news on this front… a recently released report from the State of Idaho’s Joint Legislative Economic Outlook and Revenue Assessment Committee shows the impact that real estate has had on Idaho’s Gross State Product (GSP) between 2004 and 2014. It notes that real estate was the fastest growing segment—up $3.6 billion over the 10-year period—and surpassed manufacturing to become the largest private segment in Idaho’s economy. Idaho businesses operating in the “Real Estate, Rental, and Leasing” segment generated $8.5 billion, which was 13.5% of GSP. Based on these figures, and the Total Dollar Volume noted earlier in this report, we can estimate that residential real estate in Ada County accounted for 22.4% of GSP in 2014.

Back to national trends, despite the slower economic growth that started 2016, NAR expects home sales to grow by 1-3%. Additionally, they expect prices to grow around 3-5% due to new construction housing shortages in many markets. But as noted earlier, here in Ada County, we have a balanced new construction market and need inventory growth among existing homes.

CoreLogic reported that Idaho was fourth in the nation for price appreciation last year—up 8.5% compared to 2014—based on activity through November 2015. The top five states were as follows: Colorado with 10.4% price appreciation year-over-year, followed by Washington at 10.2%, Oregon at 9.0%, Idaho at 8.5%, and Florida at 7.9%. CoreLogic estimates price appreciation in 2016 of about 3.9% for the state overall, and ACAR will be watching how that trend plays out in and around the Boise region throughout the year.

As noted, mortgage rates are expected to go up throughout the year, and likely into 2017. Even though they’ll still be historically low, NAR notes that the rule of thumb is that a 1% rise in mortgage rates translates to 10% reduction in purchasing power. This is another reason the pace of price appreciation will slow down compared to last year.

Finally, NAR will be watching job numbers throughout 2016, as they are a leading indicator of housing demand. Last year, NAR ranked Idaho as #2 in the country for job growth, up 3.2% year-over-year. ACAR will continue to support groups like the Boise Valley Economic Partnership and others, who work to attract companies and bring jobs to the state, and especially to the Boise region.

 

Summary

Carey Farmer, President of the Ada County Association of REALTORS® and Associate Broker at Group One Real Estate: “2015 was a great year for residential real estate in Ada County and across the state. I encourage anyone who is considering buying or selling a home in 2016 to connect with a REALTOR® now to discuss options specific to their situation, and to determine any prep work needed to list a home or get ready to buy. ACAR and its REALTOR® members are looking forward to another strong year in residential real estate, and are ready to assist anyone looking for help in Ada County and the surrounding markets.”

 

2015 Market Statistics Overview

Based on data from the Intermountain MLS, a subsidiary of the Ada County Association of REALTORS®. Year-to-date (YTD) shows activity that occurred during January 1—December 31, 2015.

 

All Single-Family Activity in Ada County, ID

Metric Dec 2014 Dec 2015 % Chg YTD 2014 YTD 2015 % Chg
Closed Sales 611 785 28.5% 7,784 9,284 19.3%
Median Sales Price $214,500 $232,500 8.4% $210,000 $229,000 9.0%
Total $ Volume (in millions) $156.7 $210.1 34.1% $1,914.7 $2,455.4 28.2%
Days on Market 56 55 -1.8% 56 50 -10.7%
Pending Sales 712 964 35.4%
Inventory 1,947 1,743 -10.5%
Months Supply 3.5 2.5 -20.0%

 

Existing Single-Family Activity in Ada County, ID

Metric Dec 2014 Dec 2015 % Chg YTD 2014 YTD 2015 % Chg
Closed Sales 482 594 23.2% 6,313 7,597 20.3%
Median Sales Price $195,000 $208,975 3.0% $193,500 $213,000 10.1%
Total $ Volume (in millions) $113.6 $144.1 26.9% $1,449.8 $1,890.3 30.4%
Days on Market 61 48 -21.3% 52 44 -15.4%
Pending Sales 475 603 26.9%
Inventory 1,122 888 -20.9%
Months Supply 2.5 1.7 -32.0%

 

New Construction Single-Family Activity in Ada County, ID

Metric Dec 2014 Dec 2015 % Chg YTD 2014 YTD 2015 % Chg
Closed Sales 129 191 48.1% 1,471 1,687 14.7%
Median Sales Price $300,900 $323,813 7.6% $299,900 $313,900 4.7%
Total $ Volume (in millions) $43.1 $65.9 52.9% $507.0 $565.0 11.4%
Days on Market 87 77 -11.5% 73 77 5.5%
Pending Sales 237 361 52.3%
Inventory 825 855 3.6%
Months Supply 7.2 5.3 -26.4%

 

Explanation of Metrics

  • Closed Sales — A count of the actual sales that have closed.
  • Median Sales Price — The price at which half the homes sold for more, and half sold for less. Preferred over “average sales price” which can be affected by very or very low sales prices.
  • Total Dollar Volume Sold — The sum of the sales prices of closed sales.
  • Days on Market — Average, cumulative number of days between when a property is listed and when it goes pending.
  • Pending Sales — A count of the homes that were under contract, and should close within 30-90 days.
  • Inventory — A count of the homes for sale on the 11th day of a given month following the one reported.
  • Months of Inventory — Inventory of homes for sale on the 11th day of a given month following the one reported, divided by the average monthly pending sales for the last 12 months; sometimes referred to as “absorption rate.” When this is between 4-6 months, that’s typically considered a balanced market. Under 4 months may be referred to as a seller’s market, and more than 6 months may be referred to as a buyer’s market.

 

Notes on Data Sources and Methodology

The term “single-family homes” includes detached single-family homes with or without acreage, as classified in the Intermountain MLS (IMLS). These numbers do not include activity for condominiums, townhomes, land, commercial, or multi-family properties (like apartment buildings, for example).

The information in this market report is based on a variety of sources, but primarily on the public statistics provided by the IMLS, a subsidiary of ACAR, available here: http://publicstats.intermountainmls.com/static/Reports/Ada/2015/December-2015-Ada.pdf.

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 Ada County during the specified time period. The IMLS provides these statistics for purposes of general market analysis but makes no representations as to the past or future appreciation or depreciation of property values.

To reduce the error, only data falling within 3 standard deviations from the mean has been included in the report. Existing and new construction statistics are calculated independently and may not sum to the total number of homes sold.

Changes to methodology: Effective 3/1/2007, ‘days on market’ refers to the number of days that transpire between the listing date and the date the property goes into pending status. Effective 4/1/2011, standard deviation is modified to reflect the difference between the asking and sold prices as a percentage of the asking price.

 

Contact Information

For questions about this report, please contact Breanna Vanstrom, Chief Executive Officer of the Ada County Association of REALTORS®, at breanna@myacar.com. Local market reports are released on or after the 12th calendar day of each month, and will be available here: http://myacar.com/category/market-info.

December 2015 Market Report: Home Prices and Sales Up Despite Rates; Inventory Still Way Down

In December 2015, the median sales price of all single-family homes in Ada County, as tracked by the Intermountain MLS, was at $232,500, up 8.4% compared to December 2014. The median sales price of existing single-family homes was $208,975, up 7.2% year-over-year, and the new construction median sales price was $323,813, up 7.6% year-over-year.

There were 785 closed sales in December 2015, up 28.5% over the same month last year. This brought the total dollar volume sold last month was $210.1 million, up 34.1% compared to last year.

After the Federal Reserve announced they would raise the interest rate at the end of last year, it caused concern that mortgage rates would soon follow. Economists were quick to remind everyone that there are many factors that determine where mortgage rates go, in addition to the federal interest rate. Case in point, days after the interest rate increase was announced, mortgage rates moved north of 4%, then dipped back below that mark at the start of January.

In a recent article, REALTOR.com said it expects 30-year fixed rates to “end 2016 about 60 basis points higher than they are [now, and note] that level of increase is manageable, as consumers will have multiple tactics to mitigate some of that increase.” This is especially true for buyers at lower price points. While they may see some impact to their monthly mortgage payments, it shouldn’t make purchasing in 2016 unaffordable.

There were 964 pending sales in December 2015, up 35.4% compared to December 2014, which bodes well for closed sales figures in the first quarter of 2016. “The growth in pending sales shows that home buyers were not deterred by the news of a rate change,” said Carey Farmer, 2016 President of the Ada County Association of REALTORS®. “I’m certainly seeing that with my own clients, as they continue to shop for homes and write offers. The bigger concern is the continued lack of inventory.”

In December 2015, the months supply of inventory for all single-family homes in Ada County was at 2.5 months, down 28.6% from last year. New construction was at 5.3 months of supply, down 26.4% from last year, while existing homes were only at 1.7 months of supply, down 32.0%. (A balanced market—not favoring buyers or sellers—is typically between 4-6 months of supply.)

“This time of year people think they must wait for the ‘spring market’ to list their homes. However, I have spoken with many homeowners who are in a great position to list now, and who want to sell now, and in doing so will get in front of buyers who are desperate for more inventory,” said Farmer, who is a REALTOR® with Group One in Eagle. “Buyer demand is there, we just need more homes to show them.”

 

For a comprehensive look at real estate in 2015, nationally and in Ada County, and to find out which trends we’ll be watching in 2016, check back later this week!

 

December 2015 Single-Family Home Activity in Ada County, as reported to the Intermountain MLS, a subsidiary of the Ada County Association of REALTORS®:

  • Closed Sales were at 785, up 28.5% year-over-year, and up 19.3% YTD
  • Median Sales Price was at $232,500, up 8.4% year-over-year, and up 9.0% YTD
  • Days on Market was at 55 days, down 1.8% year-over-year, and down 10.7% YTD
  • Pending Sales were at 964, up 35.4% year-over-year (not tracked YTD)
  • Inventory was at 1,743, down 10.5% year-over-year (not tracked YTD)
  • Months of Inventory was at 2.5 months, down 20.0% year-over-year (not tracked YTD)

Download the December 2015 Snapshot

 

The information in this market report is based on a variety of sources, but primarily on the public statistics provided by the Intermountain MLS (IMLS), a subsidiary of ACAR, available here: http://publicstats.intermountainmls.com/static/Reports/Ada/2015/December-2015-Ada.pdf. 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 Ada County during the specified time period. The IMLS provides these statistics for purposes of general market analysis but makes no representations as to the past or future appreciation or depreciation of property values. (To reduce the error, only data falling within 3 standard deviations from the mean has been included in the report. Existing and new construction statistics are calculated independently and may not sum to the total number of homes sold.) Changes to methodology: Effective 3/1/2007, ‘days on market’ refers to the number of days that transpire between the listing date and the date the property goes into pending status. Effective 4/1/2011, standard deviation is modified to reflect the difference between the asking and sold prices as a percentage of the asking price.