Ada County and Canyon County metrics are indicating a shift in our local real estate market. While homes are still selling for near record highs over the last few months, we haven’t seen the same month-over-month price jumps and properties aren’t flying off the market quite as fast as they were this spring and summer. And honestly, this shift has been happening since about May! The Treasure Valley real estate market has shifted from extremely hot to a much slower paced “norm” for our area.
The median sales price for homes in Ada County was $533,950 in October, a slight 0.2% decrease from the September median sales price of $534,950. Inventory was up 158.5% year-over-year, with 1,145 homes available for purchase at the end of October.
Another key indicator of market shift is the Days on Market (DOM) metric. Generally speaking, the more competitive the market, the faster properties have an offer accepted and go under contract. Overall, DOM for existing home sales has trended down for the last five years, with the fastest DOM at nine days in May 2021. Since then, the DOM metric has inched up, reaching an average of 21 days in October 2021 — eight days longer than in October 2020.
During the hot market we experienced in Ada and Canyon County, competition for homes increased and more buyers were willing to pay over list price (or asking price). This became the driving factor behind the drastic increase in median sales price from October 2020 through July 2021, when more than half of all home sales were sold for over list price. Since July 2021, the share has dropped significantly, making up 26.1% of all home sales in October 2021.
Additionally, price reductions on listed existing homes have become more common since June 2021. Weekly price reductions averaged less than one a week between January 1–June 6, and nearly eight a week from June 7–November 1. The $500,000-749,999 price range had the largest share of price reductions, making up nearly half of all adjustments year-to-date.
So if Ada County homes are staying on the market longer, price reductions are becoming more common, and the majority of buyers are no longer paying over list price, why haven’t we seen a major drop in the median sales price?
One reason is that list prices have continued to go up. Typically, homes for sale are priced based on comparable properties that have recently sold. As sales prices have risen, so have the comparables, or “comps.” These higher sales prices have may have also inspired more homeowners to sell, as existing inventory has also been trending up, with 703 available properties for sale at the end of October, an increase of more than 300% year-over-year
The average list price of existing homes in Ada County reached the $550,000-mark in June and remained above that level through the competitive summer months. Higher list prices were supported by the comparable sales in the weeks and months prior, but sale prices are ultimately determined by what buyers are willing to pay. As list prices shifted up in the latter part of the year, buyers were less likely to have to pay over asking to secure the property.
As the market adjusts to buyer’s expectations and needs, we may continue to see price reductions or even a drop in the average list price for existing homes. If list prices go down, it doesn’t necessarily mean sales prices will also drop. The median sales price for existing homes has held relatively steady, as has buyer demand. Homes are still selling at near record highs, but the rise in list prices may have eliminated some of the multiple offer situations and competition we saw occurring earlier this year.
I often see my friends, family, and clients still talking about how hot the real estate market is in Ada and Canyon County. When I meet with sellers they are still expecting their home to sell within the first weekend, with multiple offers, high above asking price. That is no longer the case! Our housing market has drastically slowed down (and has been since May) which has caused a lot of confusion and mixed messaging to the consumer. Some people are even taking the signs of a market slow down as the start of a market crash similar to 2008. How confusing!
With all this mixed messaging, it’s more important than ever to be working with a REALTOR® who is knowledgeable and up-to-date on market statistics. If you are buying or selling real estate in Ada or Canyon County, you need to be working with an agent who works in real estate full time and is educated about what’s going on now.
Too many local agents are still regurgitating the large (and overused) lingo of a HOT market. If they were actively paying attention to the market conditions, consumers would know exactly what is going on and when shifts happen – which is what I strive to do with Data Driven Real Estate… there’s a reason that is my company name!
Reach out to me today if you are curious about this shifting market, or if you are ready to make a move.
