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.
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.
Pending transactions at the end of July were two-and-a-half times the
number of residential properties on the market. The number of pending
contracts at the end of the last two months are the highest we’ve seen
in at least the last ten years. Homes that show pride of ownership and
are well cared for are likely to sell quickly. Multiple offers are
flourishing in all price ranges, even over $1 million.
The average price of homes sold in the last year have risen to $405,316, an 11% increase over the last twelve months.
Sellers: Bring on your properties. The prices are great and the sale should be quick.
Buyers: Act quickly and be prepared to loosen your purse strings.
Check out the graph below to follow July’s pending and inventory statistics for the last ten years.
June saw a small increase in Ada County closings and an 18% increase in pending contracts compared to the pendings at the end of June, 2019. This increase in new contracts was achieved despite a 40% drop in inventory over the last year. The demand-to-supply ratio is higher than ever! Resale inventory has dropped over 50% since June, 2019, and new home inventory has increased 23%.
Despite the increase in new home inventory, as builders rush to
answer the need for homes, there are only 26 days of new homes ready for
occupancy. Owners of residential property in Ada County are reluctant
to put their homes on the market for want of replacement property during
a period of low inventory. As a result, there is only a 21 day supply
of resale homes.
Despite the Coronavirus effect on demand, average prices over the
last year have increased 10.2%. Unless inventory can increase, which
will probably mean new home construction must pick up dramatically, we
expect prices to rise more rapidly in the future as people in congested
living areas look for more spacious and safer environments.
The chart below shows the number of new contracts at the end of each month over the past year.