In February, the median sales price of homes that sold in Ada County was $492,115 — down 10.5% compared to February 2022, and the fourth consecutive month of annual decline in price. However, this was a slight increase of approximately $5,000 from last month’s median sales price.
More than 40% of all home sales that closed in February were new homes, which typically sell for more than existing/resale homes. This higher-than-average share of new construction sales likely kept the overall sales price a touch higher than the month prior.
Prices are still adjusting to mortgage rates and buyer demand, but this month-over-month uptick in prices may indicate that we’re reaching a new normal with prices. Mortgage rates and supply versus demand will be the ultimate determining factors on where prices go, but we’ll keep watching to see if prices continue to level out.
With 613 total sales for the county, closings were 7.3% lower than the same month last year. However, this is the first time since June of 2022 that we didn’t see double digit annual declines in the number of sales.
Market times continued to slow last month, with homes that closed in February spending an average of 78 days on the market before going under contract. The last time we saw DOM — the average number of days between the time a home is listed and the time it is under contract — higher than 78 days was in February 2012. Despite last months’ market times being similar to February 2012, other metrics indicate that market conditions were quite different.
Inventory counts at the end of February 2023 were roughly half of what we saw in February 2012, when our market was in the midst of recovering from the burst of the housing bubble. In today’s market, home prices are being driven by supply versus demand, not speculation like we saw leading up to the Great Recession.
Another indicator that today’s market is different, is the percentage of distressed sales, or properties are listed in IMLS as “HUD Owned,” “In Foreclosure,” “REO/Bank Owned,” or “Potential Short Sale.” In February 2023, 0.3% of sales in the county were considered distressed, compared to 45.4% in February 2012.
Today’s sellers are in a much better credit position than they were over a decade ago, and that’s a big reason we’re seeing so few distressed sales. With that said, you’ll need to work closely with a qualified and knowledgeable real estate agent to price per the current market and determine the most effective marketing strategy as the market adjusts.
Buyers, on the other hand, have more negotiation power, more time to decide, and more options to choose from than we’ve seen in recent history. There were 1,039 homes available on the market at the end of February, compared to 493 for the same month last year. Potential first-time buyers can also look into down payment assistance programs specific to their circumstances, as well as Idaho First-Time Home Buyer savings accounts to maximize their down payment savings.
If you’re ready to buy or sell, contact me today. We will chat about what it is going to take to reach your real estate goals.
A Note About Mortgage Rates From Gabriel
Mortgage rates are still dominating the conversation when it comes to the real estate market and I have to ask: are you ready to get real about what is happening?
Because truth is, mortgage rates have been artificially low since 2008. Low rates were what people needed to see in order to get back into the market after the crash. The true shock for everyone is really stemming from the large spike in rates (3% to almost 7%) that happened in such a short period of time (less than a year). The sudden spike in rates threw everyone into a period of grief, and now we are working through the 5 stages of grief: denial, anger, bargaining, depression, and acceptance.
Houses are supposed to be expensive. In fact, they are supposed to be one of, if not your biggest, purchase. There’s an old saying that “the best time to buy a house is five years ago…” This is because there is always buyer’s remorse, and the truth here is that the second best time to buy a house is TODAY. It’s not going to be in 5 years or 10 years. Today is your best bet.
So stop suffering from recency and get out of the denial stage when it comes to the real estate market and mortgage rates. The best time to buy a home is when you can comfortably afford the mortgage payment, no matter what the rates are.
