The latest Existing Home Sales Report from the National Association of Realtors (NAR) revealed a direct correlation between a lack of inventory and rising prices.
We are all familiar with the concept of supply and demand. As the demand for an item increases the supply of that same item goes down, driving prices up.
National year-over-year inventory levels have dropped each of the last 18 months, as inventory now stands at a 4.0-month supply, well below the 6.0-month supply needed for a ‘normal’ market. Local inventory is even lower than the national average, with about two month's supply in most price ranges.
In fact, December 2016 saw a new record for inventory in Ada County, falling below the previous record low of 1,664 from January 2013, bottoming out at 1,490 homes for sale.
NAR’s Chief Economist, Lawrence Yun had this to say:
"Existing housing supply at the beginning of the year was inadequate and is now even worse heading into 2017. Rental units are also seeing this shortage. As a result, both home prices and rents continue to far outstrip incomes in much of the country."
But there is good news about rising prices. More and more homeowners are recovering from a negative equity situation and learning that they are able to sell their homes and either move up to their dream home or downsize to a property that will better suit their needs. Look for these homes to come to market soon.
Buyer demand continues to outpace the supply of homes for sale. Listing your home in the winter attracts serious buyers who are looking to close the transaction quickly.
Listed below are the current Ada County market statistics for December 2016 compared to December 2015:
- Closed sales - 782 (down 2.9%)
- Median Sales Price - $245,000 (up 5.6%)
- Days on the Market - 54 (down 3.6%)
- Pending Transactions - 984 (up 2.1%)
- Inventory: 1,490 (down 14.5%)
- Months of Supply - 1.8 (down 25%)
We also wanted to show how the number of months’ supply of inventory fluctuates based on the price range. The current months’ supply condition in each price range is as follows:
- $159,999 or less: 9 days
- $160,000 - 199,999: 24 days
- $200,000 - $299,499: 1 month, 18 days
- $250,000 - $299,999: 2 months, 6 days
- $300,000 - 399,999: 2.5 months
- $400,000 - 699,999: 2.9 months
- $700,000 - 999,999: 8.7 months
If you’re interested in knowing more about the current state of the market, check out these informative December 2016 Boise Regional Realtors Market Reports for both Ada and Canyon Counties.
Content from Keeping Current Matters & BRR Reporting