February 2018 Market Report
ADA COUNTY HOME PRICES HIT RECORD HIGH AS INVENTORY DROPS TO RECORD LOW
Boise being named one of the fastest growing cities has certainly brought a lot of additional attention to our region lately, but our market reports have been reflecting that growth for months, most evident through buyer demand vs. supply and its impact on home prices.
In February 2018, inventory was down 18.8% from the previous year, with a record low of 1,205 homes available for purchase, compared to 1,513 homes that were under contract, up 16.1% year-over-year. The result was a new high median sales price for Ada County of $297,500, up 16.7% over the same month last year.
The continual tightening of inventory is a concern, but we’re hearing from some local builders than more homes will be coming this year. New construction homes are more likely to be built in the southern and western parts of Ada County, with Canyon County seeing much of the new development.
In fact, there were 314 new homes for sale in Canyon County in February 2018 versus the 226 in Ada County. This put months supply of new construction inventory in Canyon County at 5.2 months, a balanced level compared to buyer demand — including an encouraging uptick in new supply priced at or below $300,000. Ada County’s months supply of new homes wasn’t quite as abundant at 3.3 months in February.
Those looking to buy this spring should be prepared to make quick decisions and strong offers to be competitive and work with their REALTOR® to stay on top of everything that’s needed to get to the closing table.
An article from REALTOR® Magazine also provides tips for prospective buyers to discuss with their REALTOR® when writing their offers and negotiating terms:
- Discuss the contingencies you’re willing to waive ahead of time. If you find yourself in a multiple-offer situation, any concessions you’re willing and able to make regarding inspection results and repairs or being flexible on the closing date may put you in a stronger position than other buyers.
- Consider offering a rent-back agreement. Sellers who plan to purchase another home are also going to have a difficult a time finding a place in this tight-inventory environment. Offering sellers the option to rent back their home after closing so they can stay longer while they look for another home could make your offer stand out. This may not be an option for everyone, but if so, be sure you are totally comfortable with the arrangement and ask your REALTOR® to explain every term in the agreement to avoid any confusion.
- Be financially prepared beyond the mortgage preapproval letter. If you have any credit issues, clear them up early and be sure you have the funds necessary to close. If there is anything that could stall a transaction upfront or at closing, consider working with a credit counselor or other professional to remove all obstacles before you start looking for a home.
MORE GEM COUNTY HOMES UNDER CONTRACT THAN A YEAR AGO
In February 2018, there were 47 homes under contract in Gem County, up 17.5% from February 2017. That left 44 homes available for sale at the end of February, down 2.2% from the same month last year.
Pending sales (or homes under contract) measures buyer demand, while inventory (or homes for sale) measures supply. The relationship between these two metrics is reported as Months Supply of Inventory (or MSI), which was at 2.1 months in February 2018.
A balanced market—not favoring buyers or sellers—is typically when MSI is between 4-6 months of supply. MSI below four months is usually more favorable to sellers, while MSI above six months is usually more favorable to buyers.
Because buyer demand is outpacing supply, as shown through the low MSI calculation, home prices are rising in Gem County. Due to the smaller number of transactions that occur in the area, we use a rolling 12-month median sales price, to get a better idea of the overall trends.
Based on data between March 2017 and February 2018, the median sales price for Gem County was $185,975, an increase of 10.6% over the same period last year.
Additional information about trends within the Boise region, by price point, by existing and new construction, and by neighborhood, are now available in the February 2018 Ada County, Canyon County, and Gem County and City Data Market Reports. This includes an explanation of the metrics and notes on data sources and methodology.
by Breanna Vanstrom | Boise Idaho REALTORS®