May was an interesting month in terms of Treasure Valley real estate. The median sales price for homes in Ada County reached $602,250 in May 2022, an increase of 16.1% compared to the same month last year, and again set a new record for the county. Like we saw in March and April, higher prices in the new construction segment contributed to overall price jump. In fact, new home sales made up 28.2% of all sales in May at a median sales price of $639,105 – up 17.5% from last year.
Existing home prices (resale) also rose to a new record with a median sales price of $586,750, a gain of 16.0% over last year. There were 894 closed home sales in May 2022, a decrease of 5.8% compared to May 2021, and the third month of consecutive year-over-year declines.
While continued price growth is somewhat puzzling when national economists are predicting a slowdown in prices and sales due to higher mortgage rates and home prices, the data is also beginning to show signs of a shift when it comes to pending sales, or properties with an accepted offer that are expected to close within 30-60 days.
In Ada County, there were 1,446 pending sales in May, down 12.7% compared to the same month a year ago. Pending sales have declined year-over-year each month since May 2021.
“Pending contracts are telling, as they better reflect the timelier impact from higher mortgage rates than do closings,” said Dr. Lawrence Yun, NAR’s chief economist. Referring to the national sales data as a whole, Dr. Yun noted that, “The latest contract signings mark six consecutive months of declines and are at the slowest pace in nearly a decade.”
Competition in the market waned some compared to a year ago. Existing homes that closed last month spent an average of 11 days on the market, compared to eight days in May 2021. Additionally, 50.7% of buyers paid over list price, resulting in an average original list price received of 100.9% for existing/resale homes in May 2022, compared to 105.0% in May 2021.
Overall higher interest rates, price growth, and economic uncertainty are top of mind. But prospective buyers will have more options than have been available in over two years because of the increases in housing inventory we’ve seen in recent months. On the flip side, sellers have continued to receive great values for their homes.
I have been talking about this shift with my clients and database for a few months now. It’s extremely important that as a current homeowner, investor, or potential homebuyer, that you pay attention to these market trends. Buying a home is one of the largest investments that most people make in their lifetime.
With a shifting market, it is more important than ever that you work with a REALTOR® who analyzes market trends to stay ahead of the curve. I am still seeing agents in the Treasure Valley price homes at the top of market value (or even above market value) with the hopes of getting the most for their listing. These are the homes we are seeing sit on the market longer and go through multiple price reductions before receiving an offer.
It’s a bit tricky to watch and understand as a general consumer, and one might think the market is shifting drastically (cue crash talks) but to an experienced REALTOR® I know the agents in these scenarios are not doing their job well to start with.
When you are ready to make a move, contact me. While go over your specific scenario, get a game plan in place, and make sure you are moving forward with confidence in this market.
This market report is provided by Boise Regional Realtors.
