Ada County and Canyon County metrics are indicating a shift in our local real estate market. While homes are still selling for near record highs over the last few months, we haven’t seen the same month-over-month price jumps and properties aren’t flying off the market quite as fast as they were this spring and summer. And honestly, this shift has been happening since about May! The Treasure Valley real estate market has shifted from extremely hot to a much slower paced “norm” for our area.
The median sales price for homes in Ada County was $533,950 in October, a slight 0.2% decrease from the September median sales price of $534,950. Inventory was up 158.5% year-over-year, with 1,145 homes available for purchase at the end of October.
Another key indicator of market shift is the Days on Market (DOM) metric. Generally speaking, the more competitive the market, the faster properties have an offer accepted and go under contract. Overall, DOM for existing home sales has trended down for the last five years, with the fastest DOM at nine days in May 2021. Since then, the DOM metric has inched up, reaching an average of 21 days in October 2021 — eight days longer than in October 2020.
During the hot market we experienced in Ada and Canyon County, competition for homes increased and more buyers were willing to pay over list price (or asking price). This became the driving factor behind the drastic increase in median sales price from October 2020 through July 2021, when more than half of all home sales were sold for over list price. Since July 2021, the share has dropped significantly, making up 26.1% of all home sales in October 2021.
Additionally, price reductions on listed existing homes have become more common since June 2021. Weekly price reductions averaged less than one a week between January 1–June 6, and nearly eight a week from June 7–November 1. The $500,000-749,999 price range had the largest share of price reductions, making up nearly half of all adjustments year-to-date.
So if Ada County homes are staying on the market longer, price reductions are becoming more common, and the majority of buyers are no longer paying over list price, why haven’t we seen a major drop in the median sales price?
One reason is that list prices have continued to go up. Typically, homes for sale are priced based on comparable properties that have recently sold. As sales prices have risen, so have the comparables, or “comps.” These higher sales prices have may have also inspired more homeowners to sell, as existing inventory has also been trending up, with 703 available properties for sale at the end of October, an increase of more than 300% year-over-year
The average list price of existing homes in Ada County reached the $550,000-mark in June and remained above that level through the competitive summer months. Higher list prices were supported by the comparable sales in the weeks and months prior, but sale prices are ultimately determined by what buyers are willing to pay. As list prices shifted up in the latter part of the year, buyers were less likely to have to pay over asking to secure the property.
As the market adjusts to buyer’s expectations and needs, we may continue to see price reductions or even a drop in the average list price for existing homes. If list prices go down, it doesn’t necessarily mean sales prices will also drop. The median sales price for existing homes has held relatively steady, as has buyer demand. Homes are still selling at near record highs, but the rise in list prices may have eliminated some of the multiple offer situations and competition we saw occurring earlier this year.
I often see my friends, family, and clients still talking about how hot the real estate market is in Ada and Canyon County. When I meet with sellers they are still expecting their home to sell within the first weekend, with multiple offers, high above asking price. That is no longer the case! Our housing market has drastically slowed down (and has been since May) which has caused a lot of confusion and mixed messaging to the consumer. Some people are even taking the signs of a market slow down as the start of a market crash similar to 2008. How confusing!
With all this mixed messaging, it’s more important than ever to be working with a REALTOR® who is knowledgeable and up-to-date on market statistics. If you are buying or selling real estate in Ada or Canyon County, you need to be working with an agent who works in real estate full time and is educated about what’s going on now.
Too many local agents are still regurgitating the large (and overused) lingo of a HOT market. If they were actively paying attention to the market conditions, consumers would know exactly what is going on and when shifts happen – which is what I strive to do with Data Driven Real Estate… there’s a reason that is my company name!
Reach out to me today if you are curious about this shifting market, or if you are ready to make a move.
While fewer Treasure Valley home buyers paid over asking for homes in September, home prices are holding steady overall. The median sales price for homes in Ada County moved to $534,950 in September 2021, marking a slight 0.8% increase over August when the median sales price was $530,500.
While prices remained steady month-over-month, the most notable statistic was the share of homes that sold for over list price dropped to 33.1% — the lowest level since June 2020.
Competition for homes has been fierce for nearly a year, and as market times fell, more buyers were willing to pay over list price, which became a primary factor driving up the median sales price. When the share of homes that sold over list price exceeded 40% in August 2020, the median sales price moved into the $400,000-range for the first time. When it reached nearly 65% in May 2021, that’s when prices exceeded the $500,000-mark.
These price gains have been the result of various market conditions that have built up over time, further accelerated by the economic and migration effects of the pandemic. These conditions include insufficient supply of inventory compared to demand, the share of new home sales, and more recently, the share of homes that were selling above list price.
Insufficient Existing/Resale Inventory You may have heard that the national and local housing market is experiencing a housing shortage, which has been at play for some time now. We saw consistent year-over-year declines in existing/resale inventory in Ada County from October 2014 through January 2019, and from April 2020 through May 2021. While we’ve seen some year-over-year increases in months outside of those ranges, we’re still dealing with constricted existing inventory, particularly at the lower price points. This has left Ada County with an insufficient supply of homes compared to demand, driving up home prices.
Persistent Demand for Homes Demand for homes has been primarily fueled by population growth, migration trends, and increased purchase power due to historically low mortgage rates, with the most recent uptick in demand coming from people re-thinking how they live and work as a result of the pandemic.
Concerns Over 2008 Repeating Itself “We are waiting for the bubble to burst” and “This is 2008 all over again” are two phrases we have been hearing a lot lately when it comes to the Treasure Valley market and home prices. It is important to note that the circumstances surround rising home prices are different this time around than when the market crashed in 2008. The crash was largely due to people obtaining large mortgages without actually being able to afford them, aka poor lending practices. Lenders have tightened up the requirements to be able to qualify for a mortgage and home prices are being driven up now due to lack of supply – its simple economics.
The jump in price likely brought prospective sellers to the market, which has helped inventory levels increase. In fact, September marked the sixth consecutive month of inventory growth. The 1,249 homes available for sale at the end of the month was an 11.1% increase from August and a staggering 165.7% increase compared to September 2020.
One metric used to illustrate the supply vs. demand relationship is Months Supply of Inventory (MSI), which takes the number of homes for sale divided by the average number of sales by month for the preceding 12 months. As of September 2021, Ada County was at just 1.5 months for existing homes and 1.4 months for new construction, meaning, if no additional homes were listed, the supply of homes for sale would run out in less than two months. A balanced market – not favoring buyers or sellers — is typically between 4-6 months of supply.
In addition, the average number of days between when existing homes were listed for sale and an offer was accepted increased to 17 days — the longest market time in the last 12 months — and 21.4% longer than the 14 days we saw in August 2021.
The increased inventory and a slightly slower pace are good news for buyers, and may be two reasons that fewer homes sold over list price last month. That said, while the Months Supply of Inventory (MSI) continued to trend up Ada County is still not in the 4-6 month range of supply which is typically considered a balanced market — creating ongoing opportunities for sellers.
This fall is still proving to be a great time for homeowners to capitalize on the current home prices. For those who are considering selling, please reach out to me about the different factors at play within our market and how they may affect different situations.
Housing inventory is trending up, as more sellers are entering the Boise area real estate market!
August 2021 marked the fifth consecutive month of inventory growth in the Treasure Valley. While our region has faced insufficient supply compared to demand for years — the main driver of home prices over the past few years — there were 1,124 homes available for sale, up 6.5% from July and up a tremendous 90.8% compared to August 2020.
The median sales price for homes in Ada County was $530,500 in August, trending down nearly $10,000 from July, although 32.2% higher than the same month last year.
These inventory gains were very encouraging, and likely prompted by higher prices, although still low compared to what they might have been had they tracked with the historical trendline. On the other hand, both pending and closed sales tracked with their respective trendlines. In August, there were 1,606 pending sales (homes with an accepted offer that should close within the next 30-60 days) and another 931 homes closed during the month.
Both pending and closed sales were down compared to last year, at 22.9% and 28.3%, respectively. Some in the national news have speculated that declines in national sales activity indicates buyers are backing off. This may be the case in some situations, especially among more price sensitive buyers, but the declines likely have more to do with the seasonality and limited inventory.
Sales activity begins to increase each December/January, typically peaking around May/June, then tapering off throughout the fall and winter as kids go back to school and the weather gets colder. The past two years haven’t had that same seasonal feel with the pandemic compressing the traditional market cycles, but any additional trending declines in activity from now through the end of the year are not completely atypical.
Note on Historical Trendlines: These are helpful tools but should be used in conjunction with other metrics to understand why something may be trending higher or lower than past data might otherwise suggest. To that point, we released a blog post about a recent Florida Atlantic University study suggesting Boise metro homes were overpriced compared to historical trends, which you can read here. You can also check out our mid-year housing summit presentation for insights as to why inventory levels continue to be constrained despite ongoing demand.
The uptick in the number of homes for sale continues to be good news for buyers, but buyers must still be prepared to act quickly once they’ve found a home to purchase. We always advise buyers to work with a REALTOR® and lender to determine ways to make an offer as competitive as possible.
One the most popular ways buyers have competed is on price, offering to pay more than the listing price. Of the homes that closed in August, 42.3% sold for more than list price, paying on average, $22,675 more than list, which is a change from the past few months when a majority of homes were selling over list price. For homes that sold under their original list price in August, buyers paid $24,423 less, on average.
That said, decisions on what price to list a home at, or whether a buyer might offer more or less, is where our expertise comes in. Whether you are looking to buy or sell, Data Driven Real Estate has a proven track record of creating wins for our clients. We strive to put our clients in the best position possible while delivering 5-star service each and every time.
While our region has faced insufficient supply compared to demand for years, July marked five consecutive months of inventory growth. Although market inventory remains significantly low compared to previous years, there were 1,055 homes available for sale at the end of the July 2021, up 44.7% from June.
After home prices rose above the $500,000-mark in May, homeowners may have been encouraged to list, as existing inventory was higher than the previous month and year for the second month in a row, something not seen since March of 2020 just before the pandemic hit the market. At the end of June, there were 729 existing homes available for purchase, up 50.3% from June 2021 and up an astonishing 116.3% compared to July 2020.
Despite more inventory, the speed of the market continues to be fast. The number of days between when a home was listed for sale and an offer was accepted (also referred to as Days on Market) was at 13 days, on average, in July — 22 days faster than the same month last year.
The median sales price for homes in Ada County reached $540,000 in July, up 2.9% from June.
I have a handful of clients & friends who have been hesitant to buy because they are either waiting for, or afraid of, a market crash. I get asked all the time, “Home prices are so high! Are we going to see another crash? When is the bubble going to burst?”
The short answer to both questions is no! Science and DATA, along with several real estate and mortgage experts, are all saying the same thing: it’s not going to happen! The market crash in 2008 was primarily due to people buying homes that they could not actually afford. They defaulted on their mortgage loan, causing an influx of homes to be for sale, and prices dropped significantly. Mortgage lenders have since tightened up their buyer qualifications, making it harder for folks to qualify – in a good way.
The driving factor in today’s high prices is supply and demand, not a market filled with unqualified buyers. The country is about 3.8 million homes short of matching the demand. The lack of supply has created an upward pressure on housing prices, and that’s unlikely to change in the next few years.
So what is happening? A leveling. We are already seeing homes sit a bit longer on the market (only by a handful of days) and price reductions are becoming more common as sellers are having to face the reality that the time for price chasing is over.
If you’ve been waiting to buy, let me tell you this: the value you can gain in equity by purchasing a home now, will far outweigh the potential savings by waiting for the bubble to burst. Especially since you’ll be waiting a long while…
While the uptick in the number of homes for sale is great news for buyers, they must still be prepared to act quickly. Buyers must also know that an offer acceptance is only the beginning of the work that a REALTOR® will complete throughout a transaction working on behalf of their clients.
Following the average 13 days on market, as noted above, there was another 52 days between the offer acceptance and closing, on average, based on the homes sold in July. During this time period, there is typically a home inspection and title search, and if the buyer is purchasing with a mortgage, an appraisal and final loan approvals.
The REALTORS® representing the buyer and seller help keep these tasks on track and work through any follow-up items, such as: negotiating repairs based on the inspection report, providing documentation to the escrow agent at the title company, requesting documents and financials from a homeowners’ association (if applicable), and confirming closings costs or mortgage payoffs with the lender.
At Data Driven Real Estate, we help with other behind the scenes items including helping clients coordinate movers, obtain homeowners insurance, switch over utilities, schedule painters and/or handyman work, assist with changes of address, maybe locate temporary housing, and much (much) more.
Give Gabriel a call today to get a game plan in place for your next real estate move. As a top producer, Gabriel has the knowledge and expertise to help you succeed in any real estate market.
The median sales price for homes in Ada County reached a new record of $523,250 in May, up 8.7% compared to April 2021. Crossing this threshold may have been anticipated by some, considering the recent report from realtor.com shared by the Idaho Statesman noting that the Boise metro’s price growth was the highest in the country over the past four years.
The Boise region has faced insufficient supply for years, which has been the main driver of home prices, but several factors have accelerated the growth in recent months. Buyer demand remains high due to historically low mortgage rates, and the added ability for more people to work remotely has likely increased in-migration due to our relative comparative affordability in comparison to more expensive metro areas.
Further, the supply of homes for sale continues to be restricted by longer homeownership tenure, baby boomers aging in place, and a hesitancy from potential sellers who may be concerned about finding another home in these competitive market conditions.
New construction has often been an option for those looking to sell their existing home; however, due to rapid increases in material costs — especially lumber — coupled with supply chain disruptions, not only are new construction homes more expensive, some builders have held back available inventory until they are closer to delivery so they can price the property based on final materials costs.
As a result, new construction home prices reached a median sales price record of $544,986 in May 2021 — an increase of 16.0% from the previous record of $469,900 in April 2021.
With delays in new home delivery, demand for existing homes that are ready to move-into, further increased. Prices followed suit with nearly 70% of buyers willing to pay over list price for existing homes in May 2021, compared to 30% from a year ago. This led to a new record median sales price for the existing segment of $523,250, up 8.7% from the previous record of $481,208 in April 2021.
However, the amount buyers were willing to pay over varied by price point of the home, with the most expensive homes selling for the highest amount over list. For homes that sold at or above $750,000, buyers were willing to pay nearly $80,000 beyond list price, on average, in May 2021, putting additional upward pressure on the overall median sales price.
The speed at which Ada County homes went under contract also accelerated, 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 12 — two days faster than in April 2021. Existing homes had accepted offers within just nine days, on average, the shortest amount of time on record, and 10.0% faster than last month.
The drastic rise in home prices and competitive market conditions can be challenging for those looking to get into the market, particularly at the lower price points. Some may decide to wait awhile before starting their home search or continue to save for a down payment to improve their purchase options, while others may consider expanding their search area for homes farther from the Boise metro.
But for those who are ready to buy, we want to stress that while it’s taking more work to purchase a home right now, it isn’t impossible to buy a home in the Treasure Valley. We have hundreds of sales closing just in Ada County every month and working with a REALTOR® is your best bet to help guide you through the fast and complex process.
When you’re ready to start your home search, we will present a buyer representation agreement, giving us permission to work on your behalf, including the ability to write, present, and negotiate offers for you, once you find a home you’d like to purchase. Additionally, as your agent, we can advise you on search strategies to find homes that fit your needs and budget and discuss the financial and legal implications of presenting offers over list price or that may waive certain contingencies like an inspection or appraisal, and whether those tactics are right for you and your specific situation.
Contact me, Gabriel Gutierrez, today to get your home search started. And if you have a property to sell and want to take advantage of this Treasure Valley market before the plateau really starts to set in, I’ve got you covered.
This market report is brought to you by Boise Regional Realtors. Please note: the May 2020 market report showed a nearly 30% drop in sales year-over-year in Ada County, the largest drop since 2008. Sales were down because REALTORS® and consumers heeded the statewide stay-home order that was in place at that time, and sales quickly rebounded as we moved through the phased re-opening plan. Since there will be stark fluctuations when comparing activity this year to last year, we will focus on month-over-month changes instead.
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®.
This website uses cookies to improve your experience. Accept or you may choose to opt out. Cookie settingsACCEPT
Privacy & Cookies Policy
Privacy Overview
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
