NOTE: Last year, the April 2020 market report showed a nearly 20% drop in sales year-over-year in Ada County, a figure not seen since 2011. This did not come as a surprise as REALTORS® and consumers heeded the statewide stay-home order that was in place at that time, and as anticipated, sales rebounded as we moved through the phased re-opening plan. It’s important to note that there will be stark fluctuations when comparing activity this year to last year because of this.
The speed at which Ada County homes went under contract accelerated in April 2021 as the average number of days between when a home was listed for sale and an offer was accepted dropped to a record low of 14 — 36.4% faster than in March 2021. Existing homes had accepted offers within an average of just 10 days — 28.6% faster than last month.
The fast pace of the market was due to the insufficient supply of homes for sale compared to buyer demand. This imbalance in supply versus demand, as well as the fact that nearly 70% of buyers of existing/resale homes paid more than the list price last month, put upward pressure on home prices. The median sales price in April reached a record $489,000 for existing/resale homes in Ada County — up 2.8% from March 2021.
Another factor impacting price was the historically low mortgage rates, which enabled some buyers to purchase at these higher price points, or, allowed them to increase their offers to be more competitive. In April 2021, the 30-year fixed rate was at 3.1%, on average, compared to 3.3% in April 2020 and 4.1% in April 2019.
New construction home prices also reached a median sales price record of $469,900 in April 2021 — an increase of 1.9% from March 2021. In addition to buyer demand, prices for new homes reflect the ever-increasing cost of materials, especially lumber. Using the most recent data available, through March 2021, the national price of lumber and wood products increased by 28.8% since 2020, and by 30.5% since 2019.
These costs are being passed along to homebuyers, and due to the uncertainty in the availability and price of materials, some builders are holding back available inventory until they are closer to delivery so they can price the property based on the actual build cost.
Lack of Inventory in Ada & Canyon County
Because some prospective sellers are also holding back existing homes from the market — sometimes due to concerns over COVID-19, but more often so they can find their next home before listing their current one — the extreme lack of existing supply has made new homes less expensive, on average, than existing homes for the past three months.
These unprecedented trends of new homes selling for less than existing homes, the willingness of buyers to pay over list price, and the record fast market times illustrate the incredible demand we’ve been experiencing, driven by low rates and insufficient supply.
One trend we hope to see continue was the uptick in inventory between March and April. The number of homes for sale was up 22.4% month-over-month with 361 homes available at the end of April. Additionally, another 671 homes became available and went under contract during the month, for existing and new construction combined. While the market is moving fast, these figures show that inventory is available.
As more homes sell above the listed price, many sellers rely on research provided by their REALTOR® to set the price initially and what they will accept. REALTORS® offer sellers guidance when it comes to setting their list price by comparing similar homes that recently sold nearby or are currently on the market, making adjustments for square footage, upgrades, amenities, location, and so on.
It has never been more important to have a competent and experienced listing specialist in your corner. At Data Driven Real Estate, you are getting the service of one of Idaho’s top producing REALTORS®. Contact Gabriel Gutierrez today for more information on what the selling or buying process looks like for you.
This market report is brought to you by Boise Regional REALTORS®.
