Clients are always asking my thoughts on the prices, increases, demand and of course.... Can this market continue climbing?" I wish I had a crystal ball. I don't, but I do study the market and its statistics. With the help of Boise Regional Realtors I've compiled information that might help you understand what's happening in the Boise real estate market. Questions? Happy to help! Want more information on your specific area/area you are considering? Let me know!
SUPPLY AND DEMAND DYNAMICS CONTINUE TO
DRIVE HOME PRICES UP IN ADA COUNTY
The existing home median sales price reached a new high at $329,000, up 14.7% from May 2018. Local home prices are being driven by the persistently low inventory of existing homes compared to demand.
Due to the lack of inventory of homes for sale at the lower price points, the share of higher-priced home sales continued to rise, further driving up the median price for the segment, as well as the market overall.
The median sales price for Ada County reached a new record of $342,990 in May 2019, for existing and new homes combined. This was up 12.5% from May 2018.
A balanced market—not favoring buyers or sellers—is typically between 4-6 months of supply. In May 2019, the Months Supply of Inventory metric for Ada County was at just 1.5 months for all price points combined, and for existing homes priced below $300,000 MSI was at one month.
Think the Boise area is in a bubble? Well...
At the 2007 peak, there were 1,355 new homes for sale compared to 756 in April 2019. Instead of prices being based on supply-and-demand, they were being driven by speculation. Today, new home prices are being driven mostly by higher land, labor, and material costs, as well as a low level of move-in ready inventory, compared to demand.
Because there are fewer homes available at the lower price points, the share of home sales above $300,000 continued to rise – at 61.3% of all existing homes sales in May 2019. As a result, as more existing homes sell at higher price points, it further drives up the median price for the segment, as well as the market overall.
To that point, the median sales price in Ada County, for existing and new homes combined, reached a new record of $342,990 in May 2019, up 12.5% year-over-year.
NEW CONSTRUCTION HOME SALES AND MEDIAN HOME PRICES CONTINUE TO CLIMB IN ADA COUNTY
New construction sales are gaining more and more of the market share and continuing to influence the overall median sales price.
In the existing home segment, the median sales price has been rising due to a persistent lack of supply, especially in the lower price points.
An increased share of higher-priced existing homes has contributed to the higher median sales price reported for the existing home segment.
New Construction’s Impact on the Overall Market
As reported last month, new construction sales are gaining more and more of the total market share in Ada County. Since new homes generally sell for more than existing homes, new home sales continue to have a greater impact on the overall median sales price. In February 2019, new construction sales made up 38.7% of all home sales in Ada County. In March 2019, that share increased to 39.8% resulting in an overall median sales price of $335,000, an increase of 8.4% year-over-year and a record high for Ada County.