The March 2011 Boise Real Estate numbers are in. Sales are UP 37% from last month, but down 8% down from this month last year. It?s difficult to compare home sales this year to last year?s numbers because at this time last year, we were in the final months of the first time homebuyer tax credit. As a result, March, April, May & June of 2010 were very strong. That said, March 2011 is stronger than both March 08 and 09. Boise home sales volumes are looking up!
What can we expect of the Boise real estate market in the coming months? Pending sales are up 12% from last month, so more sales are on the horizon. Although we can?t expect to keep pace with last spring, home sales this summer should outperform those of last summer. (There were some very slow months last summer after the tax credit ended.)
Distressed sales still make up a huge amount of total home sales. Boise?s Short Sales were 20% of the total this month, which is slightly less than the record high of 23% for the month before. REO sales were 38% of total sales in March, slightly less than the all time high 40% in December 2010. All together distressed sales accounted for over half of all Boise real estate sales (58%), near the record high 61% set in December 2010. Sales volumes are relatively strong, mainly driven by distressed home sales. Buyers shopping distressed sales can still find a large selection of homes to choose from.
What can we expect in home prices? The dollar volume is up 30% from last month, but that is still down 20% from a year ago, which means prices are still dropping. This month the average price of a home sold in Boise was $135,000, down 9% from last month and down 14% from last year. The record low home price was $126,500 in January 2011, so the past two months have seen a slight increase. These indicators lead me to believe we are at the bottom of the housing market and increasing sales volumes will stabilize and eventually increase home prices again.
The three indicators that lead me to believe Boise home prices will soon stabilize are: 1. Affordability, 2. Inventory levels, and 3. Price discounts.
Concerning affordability; the median priced resale home in January 2005 cost 19% of a Boise resident?s median income. During the height of the real estate bubble in June 2006, that cost was 30%. Currently the affordability index has fallen to a record low of 12% for a resale home. Although prices may fall a bit more, this leads me to believe we are near the bottom.
Inventory levels have dropped 28% compared to last year, and are down 2% from last month. New Construction inventory is 570, compared to 644 last year at this time. New construction inventory has dropped 42 out of the last 54 months. In September 2006 New Construction inventory reached an all time high of 1890. Resale inventory is currently 2057 compared to 3028 last year at this time. The all time inventory high for resale homes was 3920 in July 2008; the record low was 657 in July 2009. (Seeing the run-up for that year, it?s no wonder the Boise real estate bubble burst.)
Trends in price discounts indicate that prices are stabilizing. This month there is only a 1.1% discount given off the asking price, compared to 3% at this time last year. Discounts were virtually non-existent during the skyrocketing prices of 2005-2006. During Boise real estate?s ?dark ages? (2007-2010), average discounts were nearly 7%! Homes priced at market value are now moving, and discounts have shrunk to 1%.
Todd McCauley is an owner/agent of Eagle Rock Properties, a Boise real estate brokerage. He manages a program called The HELP Program that designed to help struggling buyers qualify for a home. He helps buyers and sellers with Boise homes.
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