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.

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