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.

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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

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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.

 

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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

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.

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.

Low Unemployment, Interest Rates Keep Homes Affordable Event as Prices Rise

In November 2015, the median sales price of single family home prices in Ada County, as tracked through the Intermountain MLS, was at $240,300 up 11.5% compared to November 2014. Breaking that down by sales type, the median sales price of existing single family homes was $213,000, up 7.2% year-over-year, while the new construction median sales price was $356,209, up 11.9% year-over-year.

According to a survey from the National Association of REALTORS®, the median price in Idaho is expected to increase by 3-4% over the next 12 months (looking ahead to October 2016), for existing and new homes combined. While the survey doesn’t break those numbers down to other geographies, in Ada County, we’ve seen prices increase over the past 12 months (from October 31, 2014 to November 30, 2015) by 8.7% for all homes—the median sales price for existing homes was up 8.8% year-to-date, and by 3.9% year-to-date for new construction homes.

There are a variety of factors that will determine where prices end up a year from now, especially local unemployment rates. The latest numbers from the Idaho Department of Labor show a 2.9% unemployment rate for Ada County, as of October 2015. Boise City had the lowest rate across the state at 2.4%, and Meridian came in at 3.6%. These were all well under the 5% rate nationwide.

“There is always a concern that when prices rise, homes will become unaffordable for some people,” said Brenda Kolsen, 2015 President of the Ada County Association of REALTORS®. “We’ll certainly continue to watch affordability in our region, but with the positive jobs numbers, recent wins by BVEP which is bringing new companies to the Valley, and continued interest from people wanting to move to our area, we feel that our local real estate market is in a great position for buyers and sellers alike—and we expect it to be that way for some time.”

Additionally, low down payment programs and the continuation of historically low mortgage rates have allowed people to purchase homes even as prices have risen. In November 2015, HSH.com reported mortgage rates at 3.988%.

In addition to price, here is how the rest of the market performed in November 2015, looking at all 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 621, up 13.1% year-over-year, and up 18.4% YTD
  • Median Sales Price was at $240,300, up 11.5% year-over-year, and up 8.7% YTD
  • Days on Market was at 50 days, down 10.9% year-over-year, and down 9.1% YTD
  • Pending Sales were at 1,152, up 39.3% year-over-year (not tracked YTD)
  • Inventory was at 1,919, down 15.2% year-over-year (not tracked YTD)
  • Months of Inventory was at 2.7 months, down 28.9% year-over-year (not tracked YTD)

Download the November 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/November-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.

REALTORS® Remind Sellers that Most Showings Are Now Online

“The encouraging lift-off in existing home sales amidst ongoing inventory shortages kept home prices rising in most of the country during the third quarter.” This quote from a recent press release by the National Association of REALTORS® (NAR) perfectly captures what’s been happening in the Boise region over the past few months.

And while Ada County has continued to enjoy a strong real estate market, especially compared to recent years, Q4 is when we see an annual, seasonal slowdown in home buyer and home seller activity. But for sellers hoping to move this year, any drop in the number of showings their home receives, can cause concern. Gary Salisbury, the 2016 Vice President of the Ada County Association of REALTORS® (ACAR) reminds sellers “that most ‘showings’—especially first showings—are now happening online, not in person.”

NAR’s 2015 Profile of Home Buyers and Sellers confirms this, noting that buyers rank photos and detailed property descriptions as the two most important things they look at when searching for homes online that they may want to see in person. With that in mind, here are some tips from local REALTORS® about how they utilize photos, copy, and more, when marketing homes online:

Listing Photos, Staging, and Video Tours

  • Hire a professional photographer who knows how to capture each room or space perfectly.
  • But first, declutter and bring in stager to make sure that each room will photograph beautifully.
  • Hire a professional videographer who can show how the home flows, especially if there is a unique or potentially confusing floorplan, or to highlight things that have to be seen in action (water features, automated window coverings, etc.)

Detailed Information and Property-Specific Websites

  • Write detailed and engaging property descriptions, to tell the story of the home and give buyers a sense of what it will be like to live there.
  • Highlight any recent updates, improvements, and renovations, noting popular brands, materials, or even contractors that were used.
  • Close to the Greenbelt or a popular new restaurant? Play up location-based features about the neighborhood or nearby amenities.
  • Create a property-specific website or detailed blog post featuring a variety of photos, links, stories, supplemental information, and more.

Tracking Activity Online

Ask your agent to provide regular updates about the activity your listing is getting online across all platforms—views, saves, clicks, etc. “If you and your agent have done everything you can to make the home ‘show well’ online, but there’s a drop off in search activity, or you’re not getting in person showings commensurate with the online interest, it’s time to review price,” says Brenda Kolsen, 2015 President of the Ada County Association of REALTORS®. “Your real estate agent can keep you up-to-date on any changes to the market, especially among comparable listings or recent solds, so you can stay competitive in both price and presentation.”

With that, here’s a summary of single-family home activity in Ada County in October 2015:

  • Closed Sales were at 773, up 14.9% year-over-year, and up 18.8% YTD
  • Median Sales Price was at $230,000, up 10.0% year-over-year, and up 8.4% YTD
  • Days on Market was at 45 days, down 22.4% year-over-year, and down 9.1% YTD
  • Pending Sales were at 1,224, up 38.3% year-over-year (not tracked YTD)
  • Inventory was at 2,229, down 14.0% year-over-year (not tracked YTD)
  • Months of Inventory was at 2.8 months, down 28.2% year-over-year (not tracked YTD)

Download the October 2015 Snapshot [Graphic]

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NOTE: 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/October-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.

Distributed to the media on November 12, 2015.

Which Price Points are Selling Best for Ada County Homes?

Conventional wisdom says home buyers aren’t shopping this time of year. But as the weather has stayed warmer longer, and our local economy continues to be strong, buyers are still on the hunt. Closed sales in September 2015 were up 20.6% year-over-year, and up 18.9% year-to-date compared to this same time last year.

In fact our last market report explored why this fall may be the best time to buy a home, so far this year. Now that we’re a few weeks into the fall market, this month’s market report looks at the listing and sale trends within various price points.

Brenda Kolsen, President of the Ada County Association of REALTORS®, notes that “understanding activity within price points can gauge potential demand, which is helpful for homeowners who may be considering listing their home yet this year.”

Sep 2015 Table Graphic

 

So what do these numbers tell us?

Homes priced $300,000 and above have had impressive year-over-year increases in closed sales, and those priced $400,000 and above have seen modest growth in inventory. More sales in these higher price points is one reason that the median sales price continues to rise—up 13.5% across all price points compared to September 2014, and up 8.1% year-to-date.

However, inventory is way down for homes priced $250,000 and below, which is the typical price point for first-time home buyers. With a lack of homes to choose from, some first-time buyers may reluctantly choose to delay their home search, and continue to rent or live with family or friends. Without first-time buyers, move-up buyers could end up staying in their current homes longer than they’d like.

Kolsen says that “if you have a home in this price point, and have considered selling, talk to a REALTOR® now. I hear from so many agents who are hearing from homeowners that don’t want to sell and then not be able to find something themselves. But a REALTOR® will help you understand where you stand and what options you have—especially if you’re looking to purchase in a higher price point.”

Overall, Ada County continues to enjoy a strong real estate market. Here are the trends for September 2015, with all price points combined, for single-family homes in Ada County:

  • Closed Sales were at 813, up 20.6% year-over-year, and up 18.9% year-to-date
  • Median Sales Price was at $232,000, up 13.5% year-over-year, and up 8.1% year-to-date
  • Days on Market was at 46 days, down 13.2% year-over-year, down 7.4% year-to-date
  • Pending Sales were at 1,238, up 33.1% year-over-year (not tracked YTD)
  • Inventory was at 2,410, down 15.6% year-over-year (not tracked YTD)
  • Months of Inventory was at 2.7 months, down 30.8% year-over-year (not tracked YTD)

 

Data Table and Housing Snapshot for September 2015:

September 2015 Stats

Table Notes: “YOY % Chg” stands for year-over-year percent change compared to September 2014. “Share” is the share of inventory or sales for each price point compared to the total. When this data was pulled there were no sales reported to the IntermountainMLS at $1 million+ for Sep 2015, or at $700,000-999,999 for Sep 2014.

Presentation1

 

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The Ada County Association of REALTORS® (ACAR) represents nearly 3,500 real estate professionals throughout the Boise region. For more information about the benefits of working with a REALTOR® and to search for a REALTOR® by name, language, or professional designation, visit myacar.com/find-a-realtor.

NOTE: 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: publicstats.intermountainmls.com/static/Reports/Ada/2015/September-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.