April 2023’s median sales price was $517,500, marking the sixth consecutive year-over-year drop, BUT it was a $34,000 positive surge from last month. Historically March to April is noted as the “spring market,” where more homes come up for sale which causes month-over-month shifts from -4.5% to +3.8%. However, this month we saw a 7.0% uptick which is uncharacteristically hefty for the season and is the highest month-over-month increase we’ve seen in the last 19 weeks. In fact, the bump this month in the median sales price for Ada County was in the pre-winter range and will likely continue to rise if supply recovery dwindles.
Forbes.com had warned that housing market activity could be dampened by mortgage rate changes as it has been in other areas across the country. Mortgage rates went up 15 basis points in April coming off a country-wide sales slump in March. With mortgage rates remaining in the 6-7% range, we’ve seen buyers slow down over the last few months. If the lower purchasing hunger remained, it likely would result in lower home prices. But Forbes’ research anticipates that a nationwide price decline is likely not in the cards.
Based on my experience with listing 2 homes in April and working with multiple buyers, we are once again experiencing multiple offers and seeing buyers waive contingencies or offer escalation clauses to obtain homes within certain price ranges. Days on market has even come down slightly (more on that below).
April showed a significantly slimmer inventory accrual year-over-year at 17.4%. The last time we saw inventory accumulation at less than 20% was June 2021 — the edge of the “COVID market.” Since then, we had seen an average inventory growth of 112.4% with its highest peak reaching 192.9% in June of 2022.
Sales have cooled, as well, giving time for new listings to catch up with demand. There were 645 sales in Ada County, 398 of which were existing homes and 247 were new construction. April marked the fourteenth consecutive year-over-year reduction in sales at 21.0% — 13.1% less than March’s transactions.
Existing homes continue to be the hottest commodity in Ada County, spending an average of 31 days on the market — a surprising 138.5% increase from the same month last year but a 32.6% decrease compared to March of this year. The lurch in existing home sale speed matched the pace of late-summer last year. New construction’s DOM swelled by 287.5% from April 2022, bogging down to 93 days on market — a slight respite from the 106 days we saw last month.
New market landscapes may deter buyers from uprooting due to higher interest rates, but softened prices will ease the blow for those who need to move for life circumstances such as growing families and job relocation. NAR’s Chief Economist Lawrence Yun echoed the uniqueness of the market at this week’s Legislative Meetings in Washington D.C.; the tug-of-war continues between limited supply causing multiple-offer situations — currently 28% of transactions nationwide — and the need for lower prices to account for changes in mortgage rates.
Complications are exasperated by proposed LLPA changes which may affect affordability for some. We will continue to monitor developments on the changes and share them with you.
Down payment assistance programs and rate buy-down programs continue to be an asset to buyers who are hesitant due to recent mortgage rate changes. Whether consumers are purchasing their first home or upgrading to fit their current lifestyle, real estate remains a powerful long-term tool for their financial portfolio. I encourage you as a consumer to connect with me and learn what programs may fit you best for a changing market — both as a buyer and a seller.
