With only 1,391 homes for sale last month, Ada County hit another record low for inventory—down 6.6% from December last year. Although this is a clear sign that the housing shortage continues, we are seeing steps made toward a more balanced market. For example, although overall inventory fell, inventory of newly constructed homes is on the rise. In fact, in a rare phenomenon, 317 more newly built homes sold in December than existing homes. Usually, this is the other way around. This means builders are picking up their game and helping to provide much needed homes to satisfy heavy buyer demand.
There is some concern that this massive increase in new construction will lead to overbuilding, as experienced in the mid-2000s. However, new construction today appears to be driven by actual buyer demand, resulting from more people moving into the area, than on the speculative building that occurred during the bubble.
Builders and existing home owners alike still have a long way to go in creating and freeing up inventory, especially in the lower price points. This has been difficult for builders as increased costs for land, labor, and materials forced the median price for new construction up 13.5% from last year, hitting a record high of $361,030. This price is quite high when compared with the much lower median sales price of $254,250 for existing homes in Ada County. Thus, there is a great need for owners of existing homes to move up into higher price points and release more inventory in the lower price points for entry level buyers.
Below are the current Ada County market statistics for December 2017 compared to December 2016:
Closed sales – 805 (up 2.0%)
Median Sales Price (including new construction) - $277,900 (up 13.5%)
Days on the Market - 42 (down 20.8%)
Pending Transactions - 1,180 (up 19.9%)
Inventory: 1,391 (down 6.6%)
Months of Supply – 1.7 (down 5.6%)
We also wanted to show how the number of months supply of inventory fluctuates based on the price range. The current month’s supply condition in each price range is as follows:
$159,999 or less: 0.4 months.
$160,000 - 199,999: 0.3 months
$200,000 - $249,499: 0.8 months
$250,000 - $299,999: 1.9 months
$300,000 - 399,999: 2.2 months
$400,000 - 499,999: 2.5 months
$500,000 - $699,999: 2.7 months
$700,000 - $999,999: 4.4 months
If you’re interested in knowing more about the current state of the market, check out these informative December 2017 Boise Regional Realtors Market Reports for both Ada and Canyon counties.