subject: Is the Real Estate Market Turning? Perspective from a Boise Real Estate Agent [print this page] Is the Real Estate Market Turning? Perspective from a Boise Real Estate Agent
The Boise real estate market has been in a deep slide since July 2006. That is the month home prices hit their highest levels. Although most of us did not immediately realize prices were beginning to fall, the market has dropped continuously since that time. Boise homes for sale are now selling for the lowest average price since that time. We still haven't seen a price uptick yet.
However, it's early spring 2011 and the volume home sales in the Boise area are up from this same time a year ago. Unfortunately, we recently hit a new record for short sales. They now represent about a quarter of total monthly home sales. When you add bank owned homes for sale, over 60% of total sales are distressed sales (meaning they are either short sales or foreclosed homes the bank is selling directly). Distressed sales have hovered around 60% percentage for the past several months.
Year to date sales at this point is about 15% ahead of year to date at this point last year. However, prices are still falling. Although our volume is up, prices are still falling. The median home price in Ada County was $148,000. That's a 10% drop from the median home price a year ago.
In January 2005 a local realtor / researcher started tracking Affordability. At that that time, it took 22% of a median income to buy a median priced home. During the real estate boom, that number rose to almost 40%. Now that number is down to 14%! From that standpoint, now is the time to buy. Homes are more affordable than they have ever been. When you factor in tax savings, the monthly payment to rent right now is more than it is to buy the same home.
With almost every product, prices are impacted primarily by supply and demand. Real estate and homes are no exception. Although Boise home prices are still falling, as noted earlier, inventory is also fallingleading me to believe that prices will start to increase soon. The number of homes for sale in Ada County is 28% lower than it was at this time last year. In addition, this is the first time in 10 years that the inventory has not increased in February from January!
Inventory breakdowns are as follows: New Construction inventory 577 (about the same as last month). Last year at this time there were 674 new homes for sale. New Construction inventory has dropped for 41 of the last 53 months since reaching a high of 1890 September 2006. Resale inventory is 2097 down from 2121 last month. Last year at this time there were 3024 resale homes for sale. July 2008 was the all time record high at 3920!
Bottom line: Boise home prices are still low (and perhaps falling slightly), but volume is up and inventory is dropping. Although new short sales and foreclosure are continuing to come on the market, Boise home buyers and investors seem to be picking up the slack. All this points to a likely increase in home prices in the near future. If you are thinking of buying or investing in Boise real estate, this may be a good time!
