Dan Rowe ABR CRS GRI
Dan Rowe Realty
911 Balsam Boise Id 83706
(208) 866-3481
Quarterly Real Estate Update
Boise ID Metro Area
Q4 2019 Report
Happy Spring 2020! I know, home prices seem so high, but this boom is not local and is not over. Waiting for a downturn could mean missing out on huge gains in value, possibly several years worth. All we can do is try to maintain discipline; think long-term, don't overpay or over-extend. Yes, easier said than done.
The best news I have for buyers and investors is mortgage rates are very near all-time lows, making this an excellent time to secure long-term financing to buy real estate.
It's also not too late to ride this wave- All indications point to double-digit appreciation in home prices again this year, making NOW the best time to buy/invest in 2020.
How much difference can beating the rush make? Over the previous 4 years, the median existing home price has risen by mid-year:
Ada County (2019 +12.5%) (2018 +16.72%) (2017 + 6.62) (2016 + 7.14%) 4-yr range 6.6 to16.7%
Canyon County (2019 +15.88%) (2018 +16.81%) (2017 +11.09%) (2016 +12.3%) 4- yr range 11.1 to 16.8%
Most of these gains come in Q2 and this one could be a huge- supply levels are now lowest yet. Ask me for good local lenders to get yourself prequalified. Also see my Resource Directory.
Boise Metro Home Prices- Q4 2019
Quarterly Median Existing Home Prices are the most reliable indicator of housing market price trends. Monthly numbers are too erratic. I use only existing homes in my chart, as the ebb & flow of new construction can skew the numbers.
Ada County's median existing home price for Q4 2019 slipped 0.44% from the previous quarter to $330,000. These medians typically fall in the winter, but this drop is the smallest in the last 5 fourth quarters, indicating that strong home price appreciation will continue. Year over year, the Ada County median existing home price is still up 13.8% from Q4 of 2018. That's like 3-4 years of normal appreciation in one year!
Canyon County's median existing home price for Q4 2019 fell 0.83% from the previous quarter to $241,000. Year over year, the median in Canyon County is up 15.3% when compared to Q4 of 2018. No reason to expect any slowing yet. These annual increases are worth 5 regular years of appreciation- don't miss out on this year!
Signs of Downturn in Boise Idaho?
If you are worried or hopeful about a downturn coming soon, don't hold your breath. It may be awhile. Here are my findings on 3 major indicators I watch for.
1. Absorption Rate - A slowing here could be a sign of a downturn. I averaged all residential active listings and sales over the last 12 months to nullify the seasonal changes, arriving at a 12 month average absorption rate for each county:
Ada County - 1644 listings / 982 sales = 1.67-month absorption rate -Almost the same as the previous 12 months; 1.61-month absorption rate.
Canyon County - 746 listings / 414 sales = 1.8-month absorption rate -Much lower than the previous 12 months; 2.35-months
Not a rising indicator. The national rate was 3-months as of year end, almost double!
2. Days on market - The 2019 average dom for existing homes was 26 days in Ada county. That's up 2 days from 2018 and too small a change to be meaningful. That's also less than half the national number. Canyon County was also up 2 days at 29 for 2019.
3. Discounts off asking - This chart shows all existing home sales through the end of 2019 in Ada county. The discount is the difference between the average list and average sale price, not counting any closing costs paid by sellers.
The discount off asking that sellers accept continues to get smaller. A very clear sign that the Boise Metro housing shortage is intensifying. The discount will grow when the market begins to weaken.
Boise Idaho Housing Supply Shortage
This is why home prices are rising so fast in SW Idaho. Growing demand and not enough sellers has held supply levels about as low as they can be.
This charts covers all single-family homes, including new construction, actively for sale and under contract on the first day of each month in both Ada & Canyon counties. Given these conditions, Boise area home prices must climb.
Many cities across the country, especially around California, have experienced strong increases in home prices as people migrate, the economy improves and the pent-up demand for housing is absorbed, as the latest from NAR's Q4 Metro Medians proves (coming soon).
Housing Shortage is National Problem
Population growth is very evident here in Idaho, but much of the nation is experiencing housing shortages- the number of properties for sale nationwide has hit record lows. Home building has fallen behind household formation by almost 4 million homes since 2012 nationwide, according to realtor.com.
Home builders are facing escalating prices, labor & lot shortages and building levels remain under 20-year average lows.
Researchers estimate it will take 4-5 years of above-average pace building to cure this shortage. Meanwhile, large populations of renters and qualified buyers are driving rents up.
Source: Realtor Magazine 2/6/20 "3.8M Homes Are Missing From The Housing Market"
Could Boise Have Another Crash?
We all know about market cycles and that a downturn will come. And when this boom ends, will it be a crash or a slow fade?
The crash scenario seems unlikely to happen again with so much pent-up demand. We lost 45% of our 2007 peak value here in Boise, due to a great (not normal) recession combined with the messy mortgage crisis. Back in 2006, nearly 40% of new mortgages were high-risk subprime loans. In 2018, only 3% were subprime loans. The quality of mortgages today has greatly reduced the risk of a system-wide collapse.
Sidenote: We gained all of that lost value back and much more since. That's why you should be thinking long-term, in case you have to wait out a downturn. You must be able to make the payments or cover them with rent. Many people lost their homes to foreclosure or short sale that would be equity rich today.
I have many more charts! See My Market Monitor for more information on Boise Metro housing markets and trends, updated monthly.
__________________________________________________
I am always happy to answer real estate questions; recommend a good lender, provide a free CMA or neighborhood history, an investment analysis, should-I-refi-or-remodel questions, first-timer education, etc.
Q4 2019 Report
Happy Spring 2020! I know, home prices seem so high, but this boom is not local and is not over. Waiting for a downturn could mean missing out on huge gains in value, possibly several years worth. All we can do is try to maintain discipline; think long-term, don't overpay or over-extend. Yes, easier said than done.
The best news I have for buyers and investors is mortgage rates are very near all-time lows, making this an excellent time to secure long-term financing to buy real estate.
It's also not too late to ride this wave- All indications point to double-digit appreciation in home prices again this year, making NOW the best time to buy/invest in 2020.
How much difference can beating the rush make? Over the previous 4 years, the median existing home price has risen by mid-year:
Ada County (2019 +12.5%) (2018 +16.72%) (2017 + 6.62) (2016 + 7.14%) 4-yr range 6.6 to16.7%
Canyon County (2019 +15.88%) (2018 +16.81%) (2017 +11.09%) (2016 +12.3%) 4- yr range 11.1 to 16.8%
Most of these gains come in Q2 and this one could be a huge- supply levels are now lowest yet. Ask me for good local lenders to get yourself prequalified. Also see my Resource Directory.
Boise Metro Home Prices- Q4 2019
Quarterly Median Existing Home Prices are the most reliable indicator of housing market price trends. Monthly numbers are too erratic. I use only existing homes in my chart, as the ebb & flow of new construction can skew the numbers.
Ada County's median existing home price for Q4 2019 slipped 0.44% from the previous quarter to $330,000. These medians typically fall in the winter, but this drop is the smallest in the last 5 fourth quarters, indicating that strong home price appreciation will continue. Year over year, the Ada County median existing home price is still up 13.8% from Q4 of 2018. That's like 3-4 years of normal appreciation in one year!
Canyon County's median existing home price for Q4 2019 fell 0.83% from the previous quarter to $241,000. Year over year, the median in Canyon County is up 15.3% when compared to Q4 of 2018. No reason to expect any slowing yet. These annual increases are worth 5 regular years of appreciation- don't miss out on this year!
Signs of Downturn in Boise Idaho?
If you are worried or hopeful about a downturn coming soon, don't hold your breath. It may be awhile. Here are my findings on 3 major indicators I watch for.
1. Absorption Rate - A slowing here could be a sign of a downturn. I averaged all residential active listings and sales over the last 12 months to nullify the seasonal changes, arriving at a 12 month average absorption rate for each county:
Ada County - 1644 listings / 982 sales = 1.67-month absorption rate -Almost the same as the previous 12 months; 1.61-month absorption rate.
Canyon County - 746 listings / 414 sales = 1.8-month absorption rate -Much lower than the previous 12 months; 2.35-months
Not a rising indicator. The national rate was 3-months as of year end, almost double!
2. Days on market - The 2019 average dom for existing homes was 26 days in Ada county. That's up 2 days from 2018 and too small a change to be meaningful. That's also less than half the national number. Canyon County was also up 2 days at 29 for 2019.
3. Discounts off asking - This chart shows all existing home sales through the end of 2019 in Ada county. The discount is the difference between the average list and average sale price, not counting any closing costs paid by sellers.
The discount off asking that sellers accept continues to get smaller. A very clear sign that the Boise Metro housing shortage is intensifying. The discount will grow when the market begins to weaken.
Boise Idaho Housing Supply Shortage
This is why home prices are rising so fast in SW Idaho. Growing demand and not enough sellers has held supply levels about as low as they can be.
This charts covers all single-family homes, including new construction, actively for sale and under contract on the first day of each month in both Ada & Canyon counties. Given these conditions, Boise area home prices must climb.
Many cities across the country, especially around California, have experienced strong increases in home prices as people migrate, the economy improves and the pent-up demand for housing is absorbed, as the latest from NAR's Q4 Metro Medians proves (coming soon).
Housing Shortage is National Problem
Population growth is very evident here in Idaho, but much of the nation is experiencing housing shortages- the number of properties for sale nationwide has hit record lows. Home building has fallen behind household formation by almost 4 million homes since 2012 nationwide, according to realtor.com.
Home builders are facing escalating prices, labor & lot shortages and building levels remain under 20-year average lows.
Researchers estimate it will take 4-5 years of above-average pace building to cure this shortage. Meanwhile, large populations of renters and qualified buyers are driving rents up.
Source: Realtor Magazine 2/6/20 "3.8M Homes Are Missing From The Housing Market"
Could Boise Have Another Crash?
We all know about market cycles and that a downturn will come. And when this boom ends, will it be a crash or a slow fade?
The crash scenario seems unlikely to happen again with so much pent-up demand. We lost 45% of our 2007 peak value here in Boise, due to a great (not normal) recession combined with the messy mortgage crisis. Back in 2006, nearly 40% of new mortgages were high-risk subprime loans. In 2018, only 3% were subprime loans. The quality of mortgages today has greatly reduced the risk of a system-wide collapse.
Sidenote: We gained all of that lost value back and much more since. That's why you should be thinking long-term, in case you have to wait out a downturn. You must be able to make the payments or cover them with rent. Many people lost their homes to foreclosure or short sale that would be equity rich today.
I have many more charts! See My Market Monitor for more information on Boise Metro housing markets and trends, updated monthly.
__________________________________________________
I am always happy to answer real estate questions; recommend a good lender, provide a free CMA or neighborhood history, an investment analysis, should-I-refi-or-remodel questions, first-timer education, etc.
Thank you for your interest in my newsletter! Please share with family & friends. Any referrals you send my way will be greatly appreciated and well cared-for.
911 Balsam
Dan Rowe
Boise
Id
83706
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