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
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).
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 decreasedby 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.
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
The charts below show the relationships between sales, prices and inventory every year since 2002.
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
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
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.
Last month we discussed 5 anomalies in our current Ada County housing market:
More units sold than we have in inventory
Existing homes sell for about the same price per square foot as new homes
Average time on the market is roughly the amount of time it takes to process a loan
There is only a 15-day supply of resale homes on the market
Pending contracts at the end of August were 181% of the average number of units for sale
At the end of September 2019, there were 1,872 housing units available for sale and 985 sold during the month, a ratio of .53 sold units to available units. That seemed to make sense. This September, there were only 583 units available at the end of the month yet 1,288 were sold during the month, a ratio of 2.2 sold to available units. How can we sell more properties than are available at any point in time? The answer is that many properties that come on the market are sold within a few days – or a few hours – of being listed.
As a result of this hot market, the average price of a residential
property in Ada County (we include single family, single family on
acreages, condominiums and town homes in our statistics) has jumped
12.7% in the last year.
The chart below, similar to the chart in our last report, depicts the
relationship between sold and available units at the end of September
for each of the last 5 years.
ANOMALIES: something that deviates from what is
standard, normal or expected. Below are a few anomalies presented by
our current residential real estate market in Ada County:
1. We have more sales than we have inventory. Put your home on the
market and it is likely to be sold very quickly. Not only is it sold,
but you may have a choice of several offers. Newly constructed homes can
expect an offer before construction is complete. In fact, many builders
want to build only specs, not presales, because with a spec, a builder
doesn’t have to hold a buyer’s hands through the many choices the buyer
2. Resales, or existing homes, sell for about the same as new
construction. The sales price per square foot for resales over the last
12 months is $191 compared to $196 for new construction, a difference
of 2.5%. Historically, we have felt that new homes should sell for about
20% more than existing homes.
3. Average time on market for resale homes is 40 days. That’s about
how long it takes for a loan to be processed. We don’t pay attention to
average days on market for new homes because most of them are listed
before construction is complete.
4. There is only a 15-day supply of resale homes and only 25 days of new homes that are ready for occupancy.
5. Pending contracts at the end of August were 181% of the number of
inventory units, a reversal of the normal relationship which was
discussed in our last month’s market report.
Consult the chart below to see the relationship of sold properties to
available properties at the end of August for the past 5 years.