The median sales price in Ada County for May 2023 ebbed 10.9% compared to May 2022, landing at $534,900 — a $17,400 boost from last month. A breakdown of homes sold in various price ranges highlighted an increased interest in homes between $250,000 and $500,000, leading to a lower median sales price for the month. Mortgage rate hikes over the past year also may have contributed to lower sales prices.
Existing homes faced the largest adjustment in median sales prices this month, bogging by $75,000. The 12.8% fade to the resale sector is slightly steeper than we’ve seen in past months, historically dipping from 2-14% year-over-year since September 2022. New construction welcomed a smaller reduction at 5.1% compared to the 10-20% we had seen year-over-year since January 2023.
There were 1,259 single-family homes available in Ada County in May, a reduction of 17.2% compared to the same month last year. This is the first year-over-year decrease in inventory we’ve seen since June 2021. Resale home options decreased by 22.2% while new construction choices slid by 9.9% compared to May 2022.
According to market highlights released by NAR on June 8th, the US housing market remains shy of 300,000 affordable homes for middle-income families. Boise was listed as one of the metro areas with the fewest affordable homes available for middle-income buyers. Five years ago, the income group was able to afford half of all available homes but that number has shrunk to 23%.
This month’s accelerated market speeds threaten to lower inventory moving into summer months. Comparisons for all sectors remain extended year-over-year, but single-family homes went under contract 19 days faster than the month before for a total of 36 days on market. New construction experienced the greatest shift month-over-month, shortening from 93 days in April 2023 to 66 days this month, while existing homes’ days on market depleted by 7 days. These hastened speeds have brought us back to pre-COVID market times, as shown in the chart below:
While shrinking inventory continues to pose supply issues with the increased market speeds, sales have trickled to 699 closings for the month. This is the fewest number of sales we’ve seen for the month of May since 2012.
The low quantity may largely be due to this month’s starting point. Since 2020, we’ve seen April to May month-over-month shifts of approximately 9-10%. This month, inventory still swelled by 8.3% compared to last month, meaning our market trajectory remains similar to past years. With fewer available homes, the bog in sales should help keep supply versus demand from tipping further for upcoming months.
Tackling supply issues will be a large factor in easing affordability concerns in Ada County. Builders will carry the torch for ensuring we can provide more options for middle-income families. This is echoed by National Association of Home Builders Chief Economist, Robert Dietz, who stated that the best long-term combatant to affordability concerns is to increase inventory, particularly with new construction.
With that said, there are many options out there for assisting those who are looking to buy now — I can help you find the program that best fits your situation. There is inventory out there, especially in new construction where our local builders are pushing incentives to prevent homes from sitting on the market too long. I am also able to help my clients find off market deals when I know exactly what you are looking for in a home. The best way to do this is by attending a free buyer consultation with me. Contact me today to start your home buying journey!
This market report is provided by Boise Regional Realtors.
