Professional and memorable marketing campaign material set’s apart career real estate agents from ‘hobbyists’, and brings immediate credibility with potential sellers. Access to ‘Design Vault’ puts professional-grade media creation at the fingertips of every Group One Sotheby’s International Realty agent. Watch the video to learn more.
Repeating the pattern that began this January, sales in March were lower than last March because of severely limited inventory. With only a 9-day supply of available homes, buyers are competing with each other, pushing average prices up 16.6% over the last 12 months. Multiple buyers, escalation clauses and audacious offers have become regular stories in our residential market.
The supply of resale or existing properties is so limited that the price per square foot of existing properties has risen above the price per square foot of new homes, a phenomenon not seen in my 40 years in this market.
Anecdotal data reveals that many owners are holding on to their properties for fear of not being able to find a replacement property.
The data below compares first-quarter results for the last 4 years of limited inventory during which time the average sold price has increased 49%.
Same month sales – meaning sales this February compared to sales last February – are down once again, continuing the trend started last month. And it’s all due to lack of inventory.
As you can see from the chart below, Ada County housing inventory at the end of last February was more than three times the amount of inventory at the end of this February, thereby limiting buyers’ choices, increasing competition among buyers, and causing prices to increase more dramatically (the median sold price increased 14.8% over the last 12 months).
Another unusual recent trend that has continued is that the price per square foot of existing (resale) properties has exceeded the price per square foot of new homes, $211 compared to $205. We don’t remember this happening before. This could create the opportunity to sell your 2500 square foot home and buy a 2500 square foot new home for a lower price!
Be sure to contact your Group One Sotheby’s International Realty agent to help you guide your decisions in this most unusual market.
If you read the title of this article and rolled your eyes because it sounds pretentious, you’re not alone. Why do people come up with fancy terms to describe what amounts to everyday practices and procedures? Because sounding smart is what some people value! 🙂
Understanding what people value, and how your services provide that value, can help you be more effective in communicating to your clients (or potential clients) how you can meet their needs.
Use the illustration below to think about the value you provide to someone looking to sell or buy a home, and then consider ways you might effectively articulate that value to your clients; past, present, and future. You may find that you never need to offer a discounted commission again.
Our annual market summary for Ada County highlights some interesting and significant issues happening in the world of local residential real estate. In our report we offer side by side comparisons of statistics from year ending 2019 and 2020 for each MLS defined area. Learn which areas have increased the most in average price, which areas are most affordable over all, and get a glimpse of where the market may be heading in 2021.
Significant issues of the year are:
that housing inventory (properties available to buy as of December 31st) has decreased
that, in spite of the decrease in inventory, unit sales have increased, and
because of the limited inventory, prices have
increased by about 14%.
To dig even deeper, ask your Group One Sotheby’s agent to give you more specific information regarding your own opportunities in this market as it evolves.
Corona is just the latest in a series of trends that has redefined the landscape of office space for several industries, including real estate. While the days of large office spaces with a desk for every agent may be on the decline, having a place to meet with clients face-to-face and get business done is still important.
With that in mind, we’re pleased to announce our new temporary location in Eagle at 1675 E. Riverside Drive, Suite 100 (across from Taziki’s). We’ll be here until our new permanent location, currently in the planning and design phase, is done.
If you’re in a bind and need to get a document printed or need an internet connection ASAP, stop by and check out our new place. We’ll be happy to help.
The story of Ada County real estate for the last five years has been
consistent: Increased sales (from 11,316 units in 2016 to 12,710 units
in 2020) in the face of decreased inventory (starting at 1,784 units at
the beginning of 2016 to only 379 units at the end of 2020).
January of this year began with 379 housing units available for sale and ended with 323 units, still consistent with the recent past. However, unit sales during the month of January decreased by 24% over those of last January, the first decrease in same month sales in many years.
For the future: Let’s keep an eye on inventory and sales in the next several months to see if this trend continues.
For the past: Ask your Group One Sotheby’s International Realty agent for our 2020 annual housing report to be issued February 15.
And what questions it leaves us.
First, a reminder about what we cover. Our statistics are from our database constructed from MLS statistics, covering single family homes and homes with acreages up to 2 acres of land, townhomes and condominiums. Some services that cover only detached single family homes will have slightly different statistics. We believe it is more informative to include all the main choices that buyers have, especially as housing forms change over time.
The year ended with only 379 such properties on the market, the lowest number we can remember. Inventory at the end of 2019 was 3.3 times more than it was at the end of 2020 and gives us approximately 12 days of available homes.
Despite the low inventory, sales during the month of December were 6% higher than they were in December, 2019. Perhaps even more astounding is that pending contracts were up 21% over the last year. Demand is rising, sales are rising and prices are up. The average and median prices of residential properties sold in 2020 increased by 15% over properties sold in 2019.
Perhaps the most surprising statistic, however, is that the price per square foot for resale properties, at $205, was higher than the price per square foot of new homes, at $201. We don’t remember that ever happening.
The charts below show the relationships between sales, prices and inventory every year since 2002.
Last year at this time we had 320% more inventory than we had in Ada County at the end of this November and yet we had 7% more sales this November than last November and 18% more pending transactions at the end of the month. That has been a major part of the real estate story for the last half of the year: increased sales despite a drastically lower supply of property available for sale. We discussed this in our report last month (“The Answer is Velocity”).
Multiple offers are occurring at every price range and buyers have learned to act aggressively and quickly. A market like this requires some strategic thinking. Some sellers are moving into rentals then putting their properties on the market so they can look for replacement properties in a leisurely manner with cash in hand. Whether you are a buyer or a seller, be sure to check in with your Group One Sotheby’s agent to develop a strategy for this market.
The lack of inventory combined with the acceleration of buying activity has pushed prices up 14% over the last 12 months, roughly double the national price increases reflected in the Case-Shiller index.
The charts below show how this year has been different from last year. The first chart shows pendings and inventory from last year as they occurred in a strong but fairly normal pattern. The second chart shows what has happened this year and, in particular, how pendings and inventory have inverted.
The question is, “How can we sell more properties than are on the market?”
At the end of September, we had 583 properties on the market in Ada County. At the end of October, we had 495 properties. And yet, we had 1,261 sales during October and 2,008 pending contracts at the end of October.
How can this happen? The answer is that properties don’t stay on the market very long. On a day when 40 properties are listed and brought into inventory, 42 properties might have been sold. Hence, sales velocity. The cumulative days on market (CDOM on our charts) for existing properties is 21 days – and that includes the time necessary to arrange for an appraisal and process a loan on most properties.
Have you been thinking of selling?
Another telling statistic for this most unusual market is that the average sold price is 99.8% of the average list price – not much of a discount. If you like it, buy it! The average price of sold properties over the last 12 months is $424,161, a 14% increase over the previous 12 months.
Consult your Group One Sotheby’s sales professional to develop a strategy for taking advantage of this unique market.
The chart below shows how the price per square foot of existing home sales compared to new home sales has narrowed over recent years, making existing (or resale) properties much more valuable.