Buyers nationwide are experiencing the pains and challenges of trying to purchase a home when very few homes to purchase exist.  We will see inventory pick up in the 2nd quarter as it does every year, but with the inventory starting at such a low point, it does not appear there will be enough supply for the demand.  This has been and will continue to have a definite impact on the market this year!  Here are some other factors that are defining our current market status:
 
Interest rates: Interest rates, which have been at historic lows for quite some time, are already and will continue to rise in small increments at least a few times this year.  Although this will make it harder for some buyers to qualify for a mortgage, the overall negative impact will be low. 
 
Timing: Just as spring was predicted to come early this year, the spring selling season has had a head start as well.   New listings are quickly coming and going, which is already creating a sense of urgency in buyers that we usually don’t see until summer.  Worry about future interest rate upticks is also feeding the frenzy.  These buyer perceived time-crunch issues result in a low number of days on market (days a new listing is available before it goes pending), an increase in multiple offer scenarios, and an increase of competition among buyers for the best listings.
 
Transition: For those looking to sell quickly for top dollar, the current dilemma of low inventory can be a blessing.  When options are limited, buyers will race out to see new listings as soon as they hit the market, make offers quickly, and present the best offer price and terms they are able to in order to secure the deal.  However, once sellers sell and find themselves needing a new place to buy, the dilemma of low inventory can come back to bite.  Although not the perfect scenario, some short term rental agreements are available and can be a good option for sellers who need a place to land if they face potential construction delays or need time to look for the right house to claim as their new home.
 
New Construction: Due to lack of inventory, new construction is beginning to occupy a large part of the market.  In fact, on March 1st, new construction (including those to be built, under construction, and newly completed) made up 46% of the market in Ada County!    See the breakdown below:
 
·        51% Regular Sell of Existing Homes (944)
·        19% New Construction To Be Built (343)
·        13% Under Construction (246)
·        14% New/Never Occupied (249)
·        2% Short Sales (45)
·        1% Foreclosures (18)
 
Prices: The median sales prices for Ada County was up to $235,000 in February 2016 and continues to rise.  Unfortunately, this rise is not the result of rising income but simply due to the lack of supply.  If a home is priced fairly, it will usually sell quickly for the full asking price, or in some cases will even be bid up by multiple offers to thousands of dollars above asking price.  Although fairly priced homes are selling quickly, it is important to note that homes priced above market value aren’t flying off the market.  In fact, despite low inventory, many overpriced homes are sitting on the market, leaving buyers wondering, “What’s wrong with that house.”  That is NOT what you want buyer’s wondering…so, although there is potential to get top dollar for your home in this market, overzealous pricing can cause problems. 
 
Here are the February 2016 market statistics for Ada County compared to February 2015:
·        571 closed sales – up 12.2%
·        $235,000 median sales price – up 4.5%
·        57 days on the market – down 14.9%
·        1,379 pending sales – up 25.5%
·        1,769 units of inventory – down 8.7%
·        3.2 months supply – down 15.8%