The median sales price for homes in Ada County was $565,000 in August, down 4.2% from July but 6.6% higher than August 2021. Higher mortgage interest rates and higher home prices have impacted monthly mortgage payments, causing some potential buyers to make budget adjustments, and others to press pause on their home search for the time being.
Home prices in our market are driven by supply and demand. Sellers are responding to the changes in the demand for housing and adjusting their prices according. This has caused the median sales price to come down from its peak of $602,250 in May.
One factor contributing to lower sold prices is the fact that buyers are typically paying less than list price. The average original list price received for existing homes in August was 94.0%, so on average, buyers paid less than asking through a lower accepted offer, price reductions, or seller concessions. In August 2021, the average original list price received was 99.8%, or just under asking.
While interest rates still pose a challenge, other market conditions have continued to move the right way for buyers — slower price growth, more options, and more time to decide before submitting an offer. Speaking of time, homes that sold in August spent an average of 29 days on the market before having an accepted offer, a much more normal market time compared to the 14 days average in August 2021.
Options abound with 2,374 homes available for purchase at the end of August, allowing buyers who were sidelined when the market was ultra-competitive to resume shopping for their next home. However, the current supply of homes is more nuanced than it appears at first glance.
We’re not out of the woods yet when it comes to inventory. Months Supply of Inventory, or MSI, is our best gauge on how well supply is keeping up with demand. MSI jumped up as demand cooled in recent months, but it held steady at 2.8 months in July and August. A balanced market, or one that doesn’t favor buyers or sellers, is typically 4-6 months of supply.
So, what does this mean for buyers and sellers?
According to the economists at Realtor.com, fall may be the best time to purchase a home, and this year is looking especially attractive since there are more options available. Buyers are experiencing a more balanced market than the last few years – which means they have more time to make decisions, and home prices have trended down. And although interest rates are higher right now, this shouldn’t deter buyers. You can always refinance later down the road when rates fall again (and they will fall).
When it comes to selling a property, homeowners are enjoying record high equity, and despite the recent decrease in home prices, are still receiving great values for their homes. The market has normalized and isn’t nearly as competitive as it was in 2020 and 2021. So if you list your home for sale, don’t expect bidding wars, offers waiving all contingencies, and the home to go under contract within a few days.
Now might be the best time to list your home. Goldman Sachs is predicting 0% growth in home equity in 2023. This means that now is the time to maximize your current home equity when selling, or risk selling your home for less in 2023.
However, there are still things you can do to stand out. Ask me how my expertise on pricing strategy and Data Driven marketing strategy will attract as many buyers as possible in this changing market.
This report is provided by Boise Regional Realtors.
