A Boise Inversion

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.

Crazy Hot

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 can ponder.

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.

© Group One Inc. – 2020

Busting Loose

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.


The effects of COVID-19 finally hit the Ada County housing market, but the market is resoundingly still alive and getting better. Since the business of real estate sales was declared an essential business, we were able to generate and close property transactions during the need to shelter in place.

Residential closings were down almost 30% from May 2019, clearly an effect of the Coronavirus, but new transactions (pendings) at the end of May were down only 6%, which seems amazing since it was challenging to conduct business for a couple of months.

Supply, not demand, is still our major challenge. Inventory, which has been very low, was down even further with a 6% drop from April.  Pending activity for new homes at the end of May was 9% higher than it was at the end of May 2019.There were only 33 days of resale homes on the market at the end of May and only 37 days of new homes that are ready for occupancy. 

Sellers, if you are thinking of selling, this would be the time!  Builders and developers, what an opportunity to generate more housing starts!

Buyers, prices are rising but rates are low, so it’s probably best to act now!

A Telling Month

April was the first month to show the effects of COVID-19 on the Ada County residential real estate market. April closings were down 12% compared to last April while new (pending) contracts at the end of the month were down 16%.  It is telling that new resale contracts, which are generated more recently than contracts for new construction, were down 26%.

When people are confined to their homes, and when people lose their jobs, it’s difficult to buy real estate. 

An interesting statistic we’ve been following is the ratio of pending units to total inventory units. At the end of last April, there were 1,910 pending units compared to 1,523 available units in inventory, a ratio of 1.25 to 1, a significant statistic for a hot market. The ratio at the end of this April was 1.05 to 1, which was lower but it still shows strong demand for the limited inventory available. See below:

Response to the Corona Virus? Resale Listings!

March is normally a month in which people list their resale homes anticipating strong Spring demand. But this March was unusual with an 86% increase in resale inventory!

Many homeowners may feel that property values are at their peak, especially with the uncertainty provided by the Coronavirus, and they may not want to see their properties decrease in value and the net equities diminish. Whatever their reasons, the sudden increase in resale listings is a welcome surprise to a real estate market starved for inventory.

That said, we still have only 45 days of inventory available, 30 days immediately ready for occupancy.

What happens to upward pressure on prices? It’s too early to tell but, even with the recent upsurge in listings, there remain precious few properties for buyers to choose from. The best indicator of future pricing may be the fall off in the number of pending contracts compared to the number of available housing units. As of the end of March this year, there were 599 pending contracts compared to 754 at the end of last March, a drop of 26%. 

A good statistic to watch as the market develops is the ratio of pending units to inventory units. Last March we had 1615 pending units to 1475  of inventory units, or a factor of 109.5%. At the end of this March it was 1518 pending units to 1480 inventory units, or a factor of 102.6%, lower but not drastically lower. Let’s watch how this statistic develops by the end of April and beyond.

Contact your Group One Sotheby’s International Realtor to find out how your neighborhood measures in this important statistic.

The chart below shows the sudden jump in resale listing activity.

And the Beat Goes On

The trajectory of the market continued this February with sales 8.6% ahead of last February, even though inventory is 28% lower than it was at the same time last year. Pending contracts were 16% higher than they were at the same time last year, so it appears the trend of increasing sales will continue.

The average price of homes sold in the last year is 11.2% higher, and the median price is 10.9% higher than the previous 12 months, continuing the aggressive rise in home prices.

While some people are busy preparing for COVID-19, others are busy buying homes.

What would the market be like if we had more inventory? 

Resales are not coming on the market fast enough. New homes make up an astounding 67% of available homes with only 20 days of inventory ready to be occupied. The chart below displays a breakdown of new and resale inventory.