We usually report on all the major housing choices buyers face in our market including single-family detached houses as well as condominiums, townhomes, and homes on acreages. For this report, however, we are focusing on just single-family detached housing.
Ada County housing unit sales in September were 20% lower than they were last September, and pending contracts were also down 20% lower compared to the end of last September. This should mean lower same month sales in the next several months. As you can see from the chart below, unit sales began to slow beginning in June, and average and median prices began to fall beginning in July. Unit sales in the last 4 months were 24% lower than they were a year ago for those same months and inventory has doubled, from 21 days to 42 days.
Average and median prices rose 32% from October 2020 to July 2021, a period of 9 months. That kind of month-to-month price escalation is untenable.
August saw the continuation of the Ada County market slide that began in July. Closings in August were 29% lower than closings last August. Pending contracts, which are the best indicators of the near-term future, were also down 19% compared to the level of pendings at the end of last August.
As a result of the decrease in
sales, inventory has increased by a factor of 322% since the end of last
April and by 171% over the last 2 months, increasing from 21 days of
inventory to 39, still quite low compared to a “balanced” level of
approximately 180 days.
In the week preceding this report, almost
90% of the price changes in the market were decreases. The chart below
shows the number of sales and the average prices for each month’s sales
for the last 12 months.
Anecdotal evidence from our agents (commenting on fewer
showings on listed properties, fewer people attending open houses, etc.)
has been backed up by recent results. Unit sales were down this July
compared to last July by 29%, the highest reduction of same month sales
in the last 14 years (see the chart below). Pendings – contracts in
escrow at the end of the month – were also down 18% compared to the
level of pendings at the end of July 2020. Pendings, of course, are the
best predictor of near-term future sales.
Part of the reason for the slowdown
is that the average price of properties sold this July ($624,881) was
43% higher than last July. The median price ($535,000) was 40% higher.
An aftereffect of lower sales is
higher inventory. Ada County housing inventory at the end of this July
grew by 19% compared to the level of inventory at the end of July 2020.
Despite that increase, we still have only 30 days of available
residential properties, far from an over-supplied “buyers’ market”.
What should we do? Sellers, if this trend continues, future prices
may be lower than current prices so, if you’re thinking of selling, now
may be the best time. Buyers, make sure the prices of potential
purchases make sense to you. A professional Group One Sotheby’s agent
can help in that regard.
The chart below shows the record of same month July sales for the last 14 years:
down, pendings down, prices up. Sound like 2007? The question often
heard is, will we repeat 2007-2009 again? The number of units sold and
the number of pendings during the first 6 months of this year are both
down compared to the same statistics for last year. And yet prices are
up. In 2007, this same pattern led to a major correction in 2008. Will
that happen in 2021?
chart below shows that the first 6 months in 2021 are similar to 2007
when unit sales were down, pendings were down and prices were up. The
same pattern is evidenced in the first 6 months of 2021. Although there
are similarities to 2007, there are some major differences. In 2007,
the inventory of available homes was high, while this year inventory is
very low. In addition, the equity in homes today is much higher than
2007 when there were many “no doc” loans which created a risky profile
of existing inventory.
there are similarities today to what the market was like in 2007, we
can witness several trends, such as solid loans and low inventory, that
protect us from another downfall.
The chart below presents a deeper dive into the current Ada County real estate market.
first 3 months of the year saw a reduction in same month sales; April
changed that trend. Even though we had 74% fewer properties available,
we sold 14% more units in April 2021 than we did in April 2020. Pending
contracts – contracts that are executed but not yet closed – were also
up 16% over the end of last April, promising the continuation of a
Although the number of properties sold in the first 4 months this
year were 3% lower than the comparable period of last year, the average
price was an astounding 31% higher and the median price was 28% higher
for sales during that period.
One surprising continuing trend is that the price per square foot of
resale homes is about 6% higher than the price per square foot of new
homes. Historically, new homes have sold for much more than resale
As a reminder, our data includes sales not only of detached single-family homes, but also of condominiums, townhomes and homes on acreages, covering all the expanded choices buyers enjoy in our modern market.
The table below shows a breakdown of units sold as well as the
percentage increase in average and median prices for each type of
residential property sold during the first 4 months of 2021 compared to
the same months in 2020:
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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
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
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.
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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.