Boise Real Estate Statistics: June 2011
Although Boise home sales are down 6% vs. a year ago, home sales have actually risen 6% over last month (May 2011). Last year during March, April, and May first-time Boise home buyers received Federal tax credits-artificially increasing demand. The best year to year comparisons will come later this year the 2010 tax credit won’t be a factor.
For nearly two years, distressed home sales have driven the Boise real estate market. In June, short sales made up 15% of all home sales and REOs (bank owned properties) accounted for 29%. In total, 44% of all Boise home sales were distressed. The sheer volume of these distressed sales has a major impact on Boise home prices. With nearly half of all home sales are distressed, it’s no wonder that prices continue to fall. Fortunately, the percentage of distressed Boise home sales is actually dropping. In December 2010, distressed sales made up 61% of all Boise real estate. By the way, less than one in six (16%) of Boise short sale listings actually close.
In 2005, Boise real estate researchers created and began tracking a term they coined as the affordability Index. At that time it was 19%, meaning that it took 19% of a median income to buy a median priced resale home at the then current interest rates. By June of 2006, that number had risen to 30%, indicating that homes were substantially less affordable. Now that number sits at 13%.
In June, the cost of the median Boise home was $150,000-up 5% from May 2011. Surprisingly, the median new construction home was nearly $240,000. Relatively few entry level buyers are choosing new construction and, obviously, most of the current new construction is on the high end.
Examining only resale homes in the Boise market, the median priced home falls to $138,500. The record low was in January 2011 when the median resale price dropped to $126,500. Is that as low as we’ll go? Most likely; barring a major disaster in the Boise real estate market.
Prices will rise only when home inventory levels are depleted enough to upset the supply / demand balance. Real estate inventory is falling-indicating that we are potentially on the way to a market recovery. In June of 2011, housing inventory was 32% lower than June 2010. Resale inventory is down even further. In June 2011, there were 1,970 available homes vs. 3,129 available homes a year ago. That’s a whopping 37% drop in only 12 months.
Why the big drop-off in available homes? In this market, most potential sellers won’t sell unless they absolutely have to. As a result, as buyers purchase the available short sales and REOs, inventory levels shrink. Eventually, buyers will bid Boise home prices up in an effort to obtain the relatively scarce resources. At that point, sellers will return to the market.
Home sale discounts are of particular interest to both homebuyers and sellers. A discount is simply the difference between a home’s asking price and the final sales price. In June 2011, the average discount was about 2.3%. This discount level is about where we were a year ago. A low discount rate does not measure the overall price trends. It simply indicates that Boise home buyer and Boise home sellers are coming to a common understanding of where fair market real estate values lie.
In the market for affordable Boise homes? Check out our website for details about the advantages of hiring a Boise real estate agent to help you find your dream home.
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