No Lag in Demand for Homes in Ada County
February 13, 2018 by Breanna Vanstrom
Last January, we discussed the effects of a historic snowfall on Ada County’s real estate market, which is quite different from recent stories about the mild winter helping boost new construction.
But despite builders being able to work when they normally cannot, it hasn’t been enough to push new inventory higher than it was last year. Homeowners are also not listing quickly enough to raise existing inventory levels, reasons for which are discussed in BRR’s 2017 year-end market report.
Surprisingly, pending sales (a measure of home buyer demand) were up 32.7% year-over-year, even as the supply of homes was down:
Key Metrics | January 2017 | January 2018 | YOY % Chg
Inventory 1,425 1,213 -14.9%
Pending Sales 1,037 1,376 +32.7%
Difference 388 -163 —
When looking at these numbers, we see there were more pending sales in January 2018 than the number of homes for sale, both in the existing and new construction segments (figures above are combined).
This happened in early 2017, as well, and can occur because homes usually don’t close in the same month they are listed since it can take 30-90 days to do so after an offer is accepted. So, when inventory is very low, there can be more homes under contract or pending, than available for purchase.
It’s remarkable that we’re seeing pending sales outpace inventory for new construction, too, especially considering the weather has been more favorable for building this winter. These numbers further reinforce the tremendous growth and demand for housing in our area.
The result of this very low supply compared to the very high demand, is that the Ada County median sales price hit a new record high of $279,900 in January 2018, up 16.8% from January 2017.
Demand and Supply Pressures Impacting Gem County Home Prices
In January 2018, there were 42 homes under contract in Gem County, up 7.7% from January 2017. That left 47 homes available for sale at the end of January, up 11.9% 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 2.2 months in January 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 February 2017 and January 2018, the median sales price for Gem County was $183,350, an increase of 10.1% 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 January 2018 Ada County, Canyon County, and Gem County Market Reports. This includes an explanation of the metrics and notes on data sources and methodology.
See the latest market snapshot graphics for Ada County, Canyon and Gem County:
This report is provided by Boise Regional REALTORS® (BRR), a 501(c)6 trade association, representing more than 4,400 real estate professionals throughout the Boise region, with a focus on Ada and Gem counties. Established in 1920, BRR is the largest local REALTOR® association in the state of Idaho, helping members achieve real estate success through ethics, professionalism, and connections. BRR has two wholly-owned subsidiaries, Intermountain MLS (IMLS) and the REALTORS® Community Foundation.
The data reported is based primarily on the public statistics provided by the IMLS, available at: intermountainmls.com/Statistics/Static.aspx. These statistics are based upon information secured by the agent from the owner or their representative. The accuracy of this information, while deemed reliable, has not been verified and is not guaranteed. These statistics are not intended to represent the total number of properties sold in the counties or cities during the specified time period. The IMLS and BRR provide these statistics for purposes of general market analysis but make no representations as to past or future performance.
The term “single-family homes” includes detached single-family homes with or without acreage, as classified in the IMLS. These numbers do not include activity for mobile homes, condominiums, townhomes, land, commercial, or multi-family properties (like apartment buildings).