Another month has gone by in the Boise real estate world. Although I know things are really cooking for me personally as an agent, I always look forward to looking at the research to see what is actually going on in the housing market in Ada County. The numbers are out. Let's review the findings.
First, it looks like Boise home sale are up 13% from this month last year. In fact, September 2011 home sales are ahead of the same month for 2007, 2008, 2009 and 2010. This is something we also saw last month. It appears the sales volumes are legitimately up. In fact, pending Boise house sales are 23% ahead of last year at this time.
Distressed sales have dominated Boise real estate for several years now. In fact, last December distressed home sales (comprised of total short sales + total REO or bank-owned sales) represented 61% of all sales for the month. This month short sales make up 18% of total sales and REOs are 20% of the total. All said, distressed sales have dropped from 61% to 38%. Is the market absorbing the underwater properties? These numbers seem to say yes.
So volume is up, but what about prices? This is probably a more interesting question to most homeowners in the Treasure Valley right now. The answer is a bit of a mixed bag. The median price of a resell home is $135,000 in Ada County. This is down 7% from last month; and down 13% from this same month last year. However, that is a 7% increase from January 2011. The median price last January (which happens to be our record low since the real estate bubble burst in 2006) was $126,000.
Home affordability has improved dramatically as well. In January 2005, it required 19% of a median Boise income to buy the median priced Boise home. In July of 2006, homes were at their most "unaffordable" point. The median monthly home payment required nearly 30% of the median monthly income. This month--September 2011--was a new record for "most affordable"-11.6%. Boise homes have not been this affordable for nearly a decade.
What should we expect home prices to do? Prices may drop in the short run, but expect prices to begin rising soon. Why? Boise home inventory is down 33% from a year ago. This means that the net result of all the sales vs. all the new listings has resulted in a major reduction in the total number of homes available for sale in the Boise area. This "house shortage" should eventually start to push home prices higher.
Over the past 60 months, new construction inventory has dropped for 45 months. There are currently 542 new construction homes available for sale vs. 1890 in September of 2006. Existing home inventory has dropped to 1785 from 2837 last year and 1859 last month. Three years ago, Boise had almost 4000 existing homes for sale.
Like any industry, home supply and home demand determine home prices. This month sales discounts remain relatively low. In September the difference between asking price and actual sales price averaged -3.2%. Last year at this time, it was 3.8%. Discounts were nearly triple those in recent years. The low discount levels indicate that buyer and seller expectations have reached a balance.
Have we hit rock bottom yet? Have prices stabilized? Should I buy now or keep waiting for yet lower prices? All indications point toward a recovering market. Each year, Boise real estate hits its lowest point between December and February and each year the market hits its high point between June and August. If we can maintain the year vs. year improvements in , home sales volume, inventory, and prices over the next six months, I will be confident we are in a recovering market. We'll see what happens in the coming months.
First, it looks like Boise home sale are up 13% from this month last year. In fact, September 2011 home sales are ahead of the same month for 2007, 2008, 2009 and 2010. This is something we also saw last month. It appears the sales volumes are legitimately up. In fact, pending Boise house sales are 23% ahead of last year at this time.
Distressed sales have dominated Boise real estate for several years now. In fact, last December distressed home sales (comprised of total short sales + total REO or bank-owned sales) represented 61% of all sales for the month. This month short sales make up 18% of total sales and REOs are 20% of the total. All said, distressed sales have dropped from 61% to 38%. Is the market absorbing the underwater properties? These numbers seem to say yes.
So volume is up, but what about prices? This is probably a more interesting question to most homeowners in the Treasure Valley right now. The answer is a bit of a mixed bag. The median price of a resell home is $135,000 in Ada County. This is down 7% from last month; and down 13% from this same month last year. However, that is a 7% increase from January 2011. The median price last January (which happens to be our record low since the real estate bubble burst in 2006) was $126,000.
Home affordability has improved dramatically as well. In January 2005, it required 19% of a median Boise income to buy the median priced Boise home. In July of 2006, homes were at their most "unaffordable" point. The median monthly home payment required nearly 30% of the median monthly income. This month--September 2011--was a new record for "most affordable"-11.6%. Boise homes have not been this affordable for nearly a decade.
What should we expect home prices to do? Prices may drop in the short run, but expect prices to begin rising soon. Why? Boise home inventory is down 33% from a year ago. This means that the net result of all the sales vs. all the new listings has resulted in a major reduction in the total number of homes available for sale in the Boise area. This "house shortage" should eventually start to push home prices higher.
Over the past 60 months, new construction inventory has dropped for 45 months. There are currently 542 new construction homes available for sale vs. 1890 in September of 2006. Existing home inventory has dropped to 1785 from 2837 last year and 1859 last month. Three years ago, Boise had almost 4000 existing homes for sale.
Like any industry, home supply and home demand determine home prices. This month sales discounts remain relatively low. In September the difference between asking price and actual sales price averaged -3.2%. Last year at this time, it was 3.8%. Discounts were nearly triple those in recent years. The low discount levels indicate that buyer and seller expectations have reached a balance.
Have we hit rock bottom yet? Have prices stabilized? Should I buy now or keep waiting for yet lower prices? All indications point toward a recovering market. Each year, Boise real estate hits its lowest point between December and February and each year the market hits its high point between June and August. If we can maintain the year vs. year improvements in , home sales volume, inventory, and prices over the next six months, I will be confident we are in a recovering market. We'll see what happens in the coming months.
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