This is not the end of the story…

June numbers are out for the local market in the greater Boise area. As Sgt. Joe Friday would say, “just the facts M’am”.(ask your parents!) The facts are that sales are down slightly, about 12% year over year in Ada County and 24% in Canyon County. Pending transactions are down about twice that. Not a great sign, but not doom and gloom. On the other-hand inventory of homes for sale is way up, nearly up 200% from a year ago. We have been at historic lows for inventory for nearly 2 years so more inventory is very good. And despite much news and speculation about home values, prices in the Treasure Valley values continue to rise, albeit at a slower pace than last year. Specifically, last month’s prices held steady from the month before a rare occasion in the last three years. Year over year, however, prices are up more than 16% in Ada and up 11% in Canyon.

So what does this mean? It means we are not in the last chapter of this story. The economy as a whole is so volatile that the local housing market can only be and is impacted by many other factors. This is not news or speculation. It seems that nearly every day something new is in short supply or skyrocketing in price. Something somewhere and somehow is always affecting home sales in the Treasure Valley. A very different perspective; 1285 homes were sold throughout Ada and Canyon County in June. There are Buyers looking for homes and there are Sellers wanting to sell.

So this is not the last chapter and there is a lot more story to tell. The show is not over. For now, we read on and hang on!

The Real Thing…

We love to look at numbers from the past and try to figure out what the numbers might be in the future. Sometimes this is insightful, sometimes it’s just a best guess. It can be helpful, hurtful, scary, or exciting to compare and forecast. And sometimes the numbers can speak for themselves!

In reality, our real estate market in the Treasure Valley is very strong. This is real news. Despite world news, despite the worries of the U.S. economy, and even in spite of many negative opinions and statements we hear and read this is real.

The greater Boise area is the real thing. Nothing has changed with the wonderful people, the wonderful outdoors, or even our wonderful weather. Even May snow is wonderful! People still want to live here, that is real.

So the real estate numbers today show a slowing of the crazy we have been experiencing but sales are strong, down just 11.5% in Ada County and slightly UP in Canyon County. Pending sales have slowed just a little and although active inventory is more than double what it was at the end of April 2021, it is still significantly lower than at the same time in 2019 and 2020. We need inventory for a healthy market.

Let our insights be grateful and positive. Let our guesses and forecasts be hopeful. We have many real things and many good things in our Valley. Let us find and embrace the good news in the world as we enjoy the strong real estate market locally.

Group One Sotheby’s International Realty Starts New Chapter, 40-Year Real Estate Veteran, Brad Barker Retires

Group One Sotheby’s International Realty, Treasure Valley’s real estate leader, has announced an exciting new chapter in the firm’s storied and locally rooted history. Group One founder and majority owner, Brad Barker, will retire from an illustrious 40-year career in tandem with this announcement. The Boise and Treasure Valley company now sits alongside top-performing and award-winning industry leaders in neighboring Utah, Colorado, Nevada, and California. 

With origins starting in the early 1980s Brad Barker founded Group One on the pillars of doing more, being intentional, and driving meaningful relationships, principles instilled in Barker during his time at both Yale and Dartmouth. Barker’s mantra: “The better we get to know someone, the more we focus on the relationship, the better the service can be.” Some 40 years later, these founding cornerstones have led Group One Sotheby’s International Realty to create a legacy where company culture and providing clients the most stand-up level of service is everything. In the process, Barker became an industry icon, known for his leadership, integrity, and impeccable results. In the mid-2000s, KaLinn Dishion joined Barker, furthering the company’s footprint and reputation, leading by example through her incomparable work ethic. 

“Our new partnership is truly an extension and continuation of Brad’s inspiring legacy and our commitment to our community”, said KaLinn Dishion, Group One Sotheby’s International Realty President and Broker. “We are honored to continue to serve Idahoans for another 40 years; delivering innovation, consistency, and industry-leading support for buyers and sellers from the Treasure Valley to around the world. It is an exciting day for Brad, for Group One, and for our incredible team of agents and support staff.”

Group One Sotheby’s International Realty and its 100-plus Sales Associates and Support Staff will be the seventh company owned by Majestic Realty, joining powerhouses Desert Sotheby’s International Realty, Las Vegas Sotheby’s International Realty, LIV Sotheby’s International Realty, Sierra Sotheby’s International Realty, Summit Sotheby’s International Realty, and Sun Valley Sotheby’s International Realty. KaLinn Dishion will continue to serve as Group One’s President and Managing Broker. 

About Majestic Realty, LLCFounded in 2008, Majestic Realty LLC is the largest Sotheby’s International Realty franchise in the world with over 15.9 billion in total sales volume closed in 2021. The firm represents residential, commercial, and new development clients across five states with over 1,000 sales associates and 231 support staff.

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Up, Up, Up

As we head into spring, the volatility of the world around us is causing uncertainty and speculation about real estate and the economy as a whole. Interest rates are rising, now over 5% with an expectation to rise even more. Inventory of homes for sale is also increasing throughout the Treasure Valley, which is a good thing and can in part be attributed to seasonality as historically, more homes are available and sell during the spring and early summer.

In Ada County, the number of sales has decreased slightly year over year, down 8%, but is up 26% from last month. The number of pending sales has held steady year over year and is also up from the previous month.

In Canyon County, there are good “ups”. Year over year inventory is up 59%, units sold are up 13% and pending sales are relatively steady.

Despite the crazy weather and crazy world around us, we are hopeful that the real
estate market in the Treasure Valley continues on a steady course through the Spring. As we look at the numbers, the signs are generally positive that we continue to enjoy a good market.
– Sean Hart, Associate Broker, Group One Sotheby’s International Realty

What Story Do You Want to Tell?

Each month we have statistical reports generated for real estate in the Treasure Valley. Each month we analyze those statistics, create reports and draw conclusions based on those numbers. We compare this month to last month, and this year to last year, we make comparisons, and we draw conclusions. But what is the story we want to tell? Is it price increases or inventory levels? Is it the number of sales? The answer is YES to all of those questions! We use these numbers to identify trends and often we interpret them towards the future. It has been said that the best indicator of the future is the past. So we look back to the past so that we can look forward to the future.

We can see that in Ada County inventory is up from last month by 10% and nearly double the levels from February 2021. Great news! In Canyon County inventory is actually down from last month by about 17% but is again nearly double from this time last year. Our story might be that inventory is headed in the right direction over the last year in the Treasure Valley, and although improving, supply and demand are still large factors in the market.  

In other statistical categories the numbers are similar and steady over the last year; sales, pending sales. Prices continue to rise at a steady pace as well. In Ada County prices have risen year over year by 25% and in Canyon County by 30%. We have seen numbers like these before. If the past is the best indicator of the future, will we see these numbers again? We now have a war in Europe affecting the safety and security of the rest of the world. We have higher than usual inflation impacting interest rates. There are many factors changing our world every day, month over month, and year over year. 

So, what is the story we want to tell, based on current and relevant real estate statistics and considering the influences of real life? The real estate market in the Treasure Valley is strong! The numbers tell the story! 

Year After Year

On Feb 7, 2020, exactly two years ago, Brad Barker, the owner of Group One Sotheby’s International Realty, commented on the trends of market statistics at the time and stated, ”What’s going to stop us? There are certainly concerns: how long will low interest rates last? Will the lack of affordability begin to limit sales? What if we have a pandemic?

This statement could easily be said today as we continue to deal with many of the same issues and same questions of a few years ago. “How long will interest rates last?” We know interest rates have risen and yet are still very low. So how long will these rates last? The trend appears to be that they are slowly heading up. (today at 3.875%) Time will tell how high they go and what impact they will have. “Will the lack of affordability limit sales?” Statistically, the number of sales continues to increase and so do prices. Year over year sales are up 14% and prices are up 19%. More and more Treasure Valley Buyers are saying they cannot afford to purchase a home today. The impact of affordability is clear at some price points and the solutions are becoming popular to talk about. “What if we have a pandemic?” Obviously, we are in a pandemic and the variants continue to impact our lives. For how long? Not sure we can agree on how long this will impact us but we are impacted today. The effects of this pandemic on Treasure Valley real estate have been minimal if not positive. Having something good come from something so terrible is a blessing and reason for hope even as we continue to recognize and remember so many lives that have been impacted otherwise.

Two years ago Brad finished his comments with, “But for now, the demand for properties in Ada County remains strong. And the strong demand, combined with low inventory continues to push prices up.” Again seems like this statement could be made today. Inventory of homes for sale is up 68% year over year, wow! Statistics sure support it!

Upper-End Market?

We’ve all noticed the large number of apartments being built to serve the middle to the lower end of the housing market. Right now there are over 1,200 units under construction in Ada County. That leaves the middle to the upper part of the housing market for purchases.

Are we becoming an upper-end housing market? Last December, we sold 972 homes with an average price of $491,087. This December, we sold 6% more homes at an average price 25% higher at $613,146. The total volume went up 33% from December 2020 to December 2021.

Although we sold 13% fewer residential properties in 2021 than we did in 2020, the average price was 32% higher so total dollar volume for the year was 15% higher than 2020.

The chart below compares 2021 performance with 2020 performance and the 20-Year charts show the trends in inventory units sold and average prices for the past 2 decades.

Market Correction Continues…

The correction to our overly hot housing market continued through November with unit sales 9% lower than they were in November 2020. The slide in the number of transactions was caused by the rapid acceleration of prices. The average (at $609,206) and median (at $525,000) prices this November were both 26% higher than they were last November. Median days on market, at only 12, were 3 times higher than they were last November.

Pending contracts (transactions in escrow that have not yet closed) were 11% lower than they were at the end of last November, leading us to expect slightly lower unit sales in the next several months. As a corollary, inventory has doubled in the last 12 months although we still have only one month of available homes.

Existing homes, which make up 76% of November sales and 55% of November ending inventory, are still selling for about 12% more than new homes on a square foot basis, a reversal of the statistics in more normal markets.

Please click on the link below to read Fortune Magazine’s article on how national home prices have started to decelerate, which will have to happen here if local sales units are to increase.

Read Fortune Article Here

Settling Down

The Ada County housing market continued its slide in October; year-to-year unit sales, the most important statistics to follow, were down by 17%. The next most important statistic is the number of pending sales, a predictor of the near-term future, which was 20% lower than it was at the end of last October.

The slowing market produced a level of inventory 243% greater than at the end of last October. The inventory of new homes increased just 45% but the inventory of existing homes increased 435%, perhaps reflecting the interest of many homeowners in cashing in on the last several years of appreciation. Despite the increase in inventory, there is only a 39-day supply of available properties.

Why is the market slowing? Prices, of course. The average price of properties sold this October, at $603,000, was 14.8% higher than the properties sold last October, and the median price, at $525,000, was 18.5% higher.

The per square foot sold price of existing homes at $272 was, amazingly, 13% higher than the per square foot sold price of new homes. This price difference is the reverse of more normal markets in which newly constructed homes sell for more than existing homes.
The graph below shows month-by-month unit sales from January through October for 2020 and 2021 so you can see how the market has moved over the last two years…

Still Correcting…

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.

The details are presented in the chart below.