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.

Idaho Homeowner’s Exemption Aims to Create Stable Tax Base

On Tuesday, March 8th the Idaho Senate voted to approve HB431 sending it to the Governor’s desk for signing into law. The bill changes the Idaho Homeowner’s Exemption to a set amount of $100,000, rather than tying it to the Federal Housing Price Index.

What is the Federal Housing Price Index?

According to the Federal Housing Finance Agency (FHFA) which manages the index, “The HPI is a broad measure of the movement of single-family house prices. The HPI is a weighted, repeat-sales index, meaning that it measures average price changes in repeat sales or refinancings on the same properties.” However, due to how the Index is calculated, there is an 18-month lag in reflecting actual economic conditions.  Therefore, when there are drastic changes in the market—as we experienced in 2008—the Index is not an accurate reflection of prices. Additionally the current tax law shifts the property tax between the different property categories. For example, when residential taxes are up agriculture, commercial, utilities, and other property types have lower taxes. Then when taxes for these categories are down, residential taxes go up.

Who gets a Homeowner’s Exemption?

As the Homeowner’s Exemption currently works, each owner-occupied primary residence (house or manufactured home) and up to one acre of land is eligible for a Homeowner’s Exemption. To qualify, applicants must own, occupy, and use the dwelling as of January 1 but before April 15. The annual deadline for applying for the Homeowner’s Exemption is 5:00 p.m. on April 15th. The exemption allows a maximum of 50 percent of the value, regardless of price, of the primary residence and up to one acre of land to be exempted from property taxes.

Where do I learn more about the Idaho Homeowner’s Exemption?

The Idaho State Tax Commission is the best resource for homeowner’s interested in learning more about Exemption. On its “Homeowners & Property Tax” page, the Commission explains how the Exemption works now, without the set amount: “Since taxes are based on the budgets of taxing districts, those districts can budget the same amount from property tax from one year to the next, but when property values go down, the levy rate goes up automatically to compensate. If one property’s value increases more than others, its taxes go up faster than others.”

Over the past 10 years, the Idaho Homeowner’s Exemption has been as high as $104,471 and as low as $81,000,due to fluctuations in the Index. The exemption amount for 2016 is $94,745.

Home Value Current Exemption Amount New Exemption Amount
$100,000 $50,000 $50,000
$200,000 $94,745 $100,000
$500,000 $94,745 $100,000
If decreasing 18-month lag in decrease $100,000

 

Going forward, the set exemption amount of $100,000, as outlined in HB431, aims to stabilize the Exemption, create a predictable tax base and provide certainty to homeowners and others who own real property in all categories.

Key points to remember:

  • Idaho is just one of a handful of states that provides a homeowner’s exemption.
  • The $100,000 exemption is actually higher than what we have currently, and higher than what most other states with an exception offer.
  • Both current and future exemptions are capped at 50% of a home’s value, regardless of that price.

Still have questions? Contact Miguel Legarreta, Director of Public Policy at Boise Regional REALTORS®.

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.

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.