Is this the “new” stable market?

Unit sales for the past rolling 12 months held steady although the summer months and new construction fell short of 2013; prices are still climbing, although more slowly; inventories remain steady, although significantly higher in new construction.

Ada County Existing Homes:  Sales held steady over the last 12 months with a small increase of 1.4% over the previous 12 months, despite August closings down 10% over last August.  July’s year-over-year average price increase of 10% continues to drop slowly, with trailing 12 months average sold prices up 8.7% over the previous 12 months.  It certainly appears that prices are stabilizing thanks to higher inventories than last year and distressed sales continuing to drop, now making up only 11% of sales compared to 20% last August.

Inventory has remained steadier over the summer with 3.9 months of current supply, down a bit from 4.2 last month (the total number of properties on the market are up 20% over last July/August).  For the resale market, this remains below the 6 months of supply that many experts believe is a “balanced” market between buyers and sellers.

Ada County New Construction:  The most dramatic numbers are in the new construction market with unit sales down 22% this August over last. Average sold prices are up 11.5% (rolling 12 months) and August pending contracts are down 19% over last August.  A 28% increase in inventory explains the 6.2 months of supply on hand.  If we drill down a little it seems builders were looking for a “sweet spot” in the market. Inventory of new homes priced from $300,000 to $600,000 increased 77% August over August – which may be good news for buyers in that price range.

Buyers in the resale market are still finding good values, despite the dramatic decrease in distressed property, with average resale prices 27% lower than new construction ($219,757 vs. $301,695).  Cash buyers are still active in our valley, first time home buyers are anxious to purchase while historically low interest rates give them greater purchasing power, and move-up buyers are finding greater value at that next higher price point.  It remains a great market for sellers who pay close attention to pricing, staging and marketing.

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What Do I Need to Watch Out For When Selecting a Listing Agent?

Not all listing agents are the same. It is important to select and hire an agent that is an expert in the area in which your home is located. In Idaho, licenses allow agents to sell anywhere in the state, but an agent from Mountain Home or Nampa might not be the best choice if the home you want to sell is in Boise’s North End.

Make sure the agent you choose is someone you feel you can talk with. Selling your home is a big undertaking. Lots of things can and will come up. You need to feel comfortable that you and your agent can communicate easily.

Many people make the mistake of choosing an agent who seems willing to listen to their input and agree to their terms, who apparently wants to get the most for their property and, therefore, is willing to start out at their price and then drop the price later. This agent is engaging in a questionable sales practice called “buying a listing.” He “bought” the listing by offering to list the property at a higher sales price than other agents recommend. Most likely, he/she is quite doubtful that your home will actually sell at that price. The intention from the beginning is to eventually talk you into lowering the price. You pay the high price of too much time on the market, which ultimately results in a lower sales price than if you listed at the right price to start.

There is no “perfect” agent, but arming yourself with some knowledge will help you find a great match.

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Five Reasons to Buy a Home Now

Looking at prices, mortgage rates and soaring rents, there may have never be a better time to purchase a home than right now. Here are five major reasons you should think about buying.

1. Competition is about to Increase

Every spring a surge of buyers enter the housing market. Like you, they will want the best home available in the best location at the best price. They will be competing with you for the ‘deals’ in the market. Don’t miss the opportunity to get that ‘once-in-a-lifetime’ buy today that no longer be available as the market heats up.

2. Price Increases Are on the Horizon

Nationally, home prices are projected to appreciate by 4.5% in 2014 and by over 19% from now until 2018. Home buyers will probably pay more both in price and interest rate if they wait until spring.

3. Owning a Home Helps Create Family Wealth

Whether you rent or you own the home you are living in, you are paying a mortgage. Either you are paying your mortgage or your landlord’s. In a recent study, The Federal Reserve stated that the net worth of the average homeowner is 30 times greater than that of a renter.

4. Interest Rates Are Projected to Rise

The Mortgage Bankers Association, the National Association of Realtors, Freddie Mac and Fannie Mae have all projected that the 30-year mortgage interest rate will be over 5% by the spring of 2015. That is an increase of almost 3/4 of a point over current rates.

5. Buy Low, Sell High

We want to buy at the lowest price possible and hope to sell at the highest price. Housing can create family wealth as long as we follow this simple principle. Today, real estate is selling ‘low’ compared to where it will be next year. It’s time to buy.

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A Bump in the Road?

The market took a step back in February with sales decreasing 9% compared to last February and Pendings decreasing 12%. Inventory has increased 18% over the last twelve months but, because of the pace of sales over that period of time, we have only 3 months of inventory.

Distressed property sales amounted to only 13% of total sales this February compared to 24% last February. It is interesting to note that the decrease in total sales from last February to this February is exactly the same amount as the decrease in sales of distressed properties.

New construction sales decreased 12% from February 2013 to February 2014 and the average price of a new home increased 18% to $306,780. New home prices over the last twelve months were 32% higher than resale homes.

Normally a drop in same month unit sales could signal a turn in the market, but the decreased availability of the lower-priced distressed properties may simply signal a continued return to a more normal market.

One thing is clear: the market needs more resale listings and the listing season is upon us.

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Off to a Good Start

January 2013 Statistics

January started the year off on a positive note in Ada County, with a 9% increase in sales over last January at a 12% higher average price of $233,306. Distressed property sales decreased to 12% of the total compared to 25% last January, so the market is continuing to get healthier.

Inventory dropped very slightly during the month but is 21% higher at the end of this January than it was a year ago. Despite that increase, the increased pace of sales over the last twelve months has caused us to have only 2.9 months of inventory available for sale.

New construction accounted for 25% of all sales in January, but with new home prices 33% higher than resale homes, new homes are beginning to sit on the market. There is a 2.2 month supply of resale homes compared to a 5.5 month supply of newly built homes. Moreover, while the inventory of resale homes has increased 14% over the last year – not keeping pace with the average increase in inventory – the number of new homes on the market has increased 35%.

It is encouraging to note that sales of upper end properties in Ada County (over $500K) increased 58% in the last twelve months compared to the previous twelve months.

Sellers: This is a great time to put your home on the market. Competitive resale inventory is low and there are not enough existing homes for buyers to choose from. If the number of resale properties on the market doubled, we would still have only 4.7 months of total residential inventory – still a significant shortage. Why not benefit from current market conditions?

Buyers: Interest rates have dipped in the last few weeks, making homeownership more affordable. If you can act now and find a home that is “almost” good enough, it may turn out to be a great buy in the long term.

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Why Sell Now?

Prices for everything are affected by supply and demand. This is true whether you are talking about gasoline, art or residential real estate. If lots of people want something that is in limited supply, the price goes up.

The National Association of Realtors tells us that the supply of homes for sale increases dramatically every spring. If you put your house on the market now instead of waiting for spring (and increased competition), you could be well ahead of the game.

Buyers that are canvasing homes for sale in the winter are highly motivated buyers. They want to buy now and, because of the limited inventory, a seller has a stronger position from which to negotiate. Think about it. It makes a lot of sense.

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A Successful Year and a Bright Outlook

2013 Year-End Market Statistics

2013 was a very successful year in residential real estate for Ada County. The number of transactions increased 13% over 2012, and the average price of properties sold increased 16%, from $193,655 to $225,226. The median price also rose 15%, from $164,945 to $190,000. A major reason for the price increase was that there were fewer sales of (less expensive) distressed properties, decreasing from 30% of transactions in 2012 to 14% this year and to only 10% in the last quarter.

Inventory actually increased 17% this year but, because the pace of sales also increased, we were left with only 2.9 months of supply at the end of the year.

Canyon County showed interesting results: with only a 5% increase in units sold, the average price increased 26%, from $104,897 to $132,087 and the median price increased 33%, from $90,000 to $120,000. Yet distressed property sales only decreased from 50% in 2012 to 42% in 2013. In the last quarter, however, distressed sales were only 18% of total closings.

Inventory in Canyon County increased 36% from the end of 2012, leaving us with 4.1 months of residential supply.

New construction statistics are noteworthy: while new homes accounted for 20% of sales in Ada County, they accounted for 38% of inventory at year end. It may be significant that, at an average price of over $277,000, new homes sold for 31% more than resale homes in 2013. The new home inventory, at 5.4 months, is more than twice the supply of resale homes at 2.3 months.

In Canyon County, new homes accounted for only 15% of total sales in 2013. At an average price of $180,443, new homes sold for 49% more than existing homes, a significant differential in price. Inventory of new homes increased by 32% with 10 months of supply at year end compared to 3.1 months of supply for resale homes. While new homes accounted for 15% of sales in 2013, they made up 35% of inventory at the end of the year.

Because we are starting the 2014 year with higher prices and higher interest rates than we had at the start of 2013, we encourage both buyers and sellers to act early. The cost of purchasing real estate should continue to rise in the coming year and the buyers and sellers who act soon should benefit.

The graphs below show the movement in average price and number of units sold in Ada and Canyon Counties from 2002 through 2013.

Ada 2013 Year End

Canyon 2013 Year End

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Steady As She Goes – November Market Statistics

November 2013 was similar to November 2012 in Ada County residential real estate transactions. Closings were up 1% this November and Pendings were the same. Inventory increased 13% over the past year, but because the pace of sales was 13% higher over the trailing twelve months (compared to the twelve months ending November 30, 2012), we still have only 3.4 months of inventory.

While the number of transactions increased 13%, the average price of a residential property sold increased by 17%. The average size of a property sold also increased very slightly – from 1997 square feet to 2039 square feet.

The last twelve months have seen a significant drop in sales of distressed (short sales, bank-owned and HUD-owned) properties from 32% of sales in the twelve months ending November 30, 2012 to 15% in the last twelve months. This has resulted in a 40% increase in the sales of non-distressed properties!

New home sales have increased from 19% of total sales in 2012 to 21% in 2013, a 23% increase in the absolute number of new homes sold. New home prices rose 12% to an average price of $274,000, about 30% higher than the average price for re-sales. As costs continue to rise, the price of new homes should also increase in the foreseeable future, helping to bring up the prices in the re-sale market.

Buyers: prices will probably be higher in the future as steady growth in the market is likely to continue. There is not a lot of inventory to choose from but there are fewer buyers to compete with this time of year.

Sellers: with limited inventory on the market right now, bringing your property onto the market may help you avoid more competition in the spring and buyers this time of year are serious about purchasing something.

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A Little Bit Slower – October Market Statistics

Based on the limited data available so far in the fourth quarter, the torrid pace set in the first three quarters appears to be slowing. October’s closings were down 3% and pending sales down 4% from October 2012.

Several things are happening to create this slowdown:

(1) The institutional investors are pretty much gone from the market, decreasing the demand for residential income property. (2) Although interest rates remain at very affordable levels, they have risen approximately 1.5% this year, eroding buying power by about 15%. (3) The inventory of distressed property has decreased significantly. Only 6% of listings and 9% of sales were distressed properties in October. (4) Average prices have risen 17% in the last year, again decreasing the affordability of owning a home.

However, there are many signs our market will continue to be healthy for the next year. (1) Although average prices have risen, the average price of a home now is still 20% lower than six years ago when the market turned down. (2) Even though interest rates have increased recently, they are still near all-time lows, making real estate ownership look like a great, affordable deal. (3) While inventory levels have risen by 50% over the low point this year, we still have only 3.7 months of residential property on the market. (4) Ada County is creating jobs. And finally (5) we have found that, as California prices rise, Californians are able to sell their homes and come to Idaho.

Buyers: Prices are still competitive and interest rates are still low. Fall is often a more relaxed time to buy before the expected surge next spring. The main obstacle you may have to deal with is finding just the right property because of limited availability. It’s a good idea to have a trusted relationship with an agent who can get in touch with you right away when they find something new has come on the market.

Sellers: The good news is that, with inventories still lean, you are in a position to have success. Buyers who are in the market now are generally quite serious. Bringing your property onto the market now may enable you to beat the more competitive market in the spring.

Be sure to stay in touch so I can keep you updated on market conditions.

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August was hot!

Ada County sales this August increased by 11% over last August. The average price of distressed properties increased by 19%, and the average price of non-distressed properties increased by 5.2%. Distressed sales were only 11% of total sales this August compared to 21% last August.

Despite the fast pace of sales, inventory has increased by 15% since the low point at the beginning of the year as sellers have been taking advantage of the rising prices and strong demand for Ada County properties. This activity has left us with 3.6 months of inventory, based on average monthly sales over the last twelve months.

Activity in new construction continues to account for just over 20% of the market. The average price of new home sales, at slightly over $270,000, is about 25% higher than the average price of resale homes. The new home market has 4.4 months of inventory including homes that are not yet finished.

Year to date, sales have increased 11.6% over sales for the first eight months of last year. Prices have increased 17.4%, and the proportion of distressed sales has decreased from 32.7% to 15.6% from January through August.

 

Market Statistics
Click on the links below to download the latest Market Statistics.

Legend

Market - These include homes of all ages and new construction.
Existing - This includes all homes older than 1 year and excludes new construction data.
New Construction - This includes new, to be built, and under construction homes.

 Ada County Area Map
 Canyon County Area Map

Market Existing New Const
Ada County DownloadPDF DownloadPDF DownloadPDF
North Boise, 100 DownloadPDF DownloadPDF DownloadPDF
Northeast Boise, 200 DownloadPDF DownloadPDF DownloadPDF
Southeast Boise, 300 DownloadPDF DownloadPDF DownloadPDF
Boise Bench, 400 DownloadPDF DownloadPDF DownloadPDF
Southwest Boise, 500 DownloadPDF DownloadPDF DownloadPDF
SW Boise/Meridian, 550 DownloadPDF DownloadPDF DownloadPDF
West Boise, 600 DownloadPDF DownloadPDF DownloadPDF
West Boise/Meridian, 650 DownloadPDF DownloadPDF DownloadPDF
Garden City, 700 DownloadPDF DownloadPDF DownloadPDF
NW Boise/Garden City, 800 DownloadPDF DownloadPDF DownloadPDF
Eagle, 900 DownloadPDF DownloadPDF DownloadPDF
Star/Meridian, 950 DownloadPDF DownloadPDF DownloadPDF
Southeast Meridian, 1000 DownloadPDF DownloadPDF DownloadPDF
Southwest Meridian, 1010 DownloadPDF DownloadPDF DownloadPDF
Northeast Meridian, 1020 DownloadPDF DownloadPDF DownloadPDF
Northwest Meridian, 1030 DownloadPDF DownloadPDF DownloadPDF
Kuna, 1100 DownloadPDF DownloadPDF DownloadPDF
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