Supply is low and demand is high in our Ada County market.

 

We’re well into December, which means it’s time to look back on November to see our latest market statistics. 

 

In short, November saw some great numbers, with even more record pricing. The median price for resale homes rose to $425,000, which is an 18% jump year over year and a considerable increase compared to October ($406,000). This new record is the result of insufficient supply running up against persistently strong demand fueled by historically low mortgage rates. The median price for new construction homes, meanwhile, was $429,000. I’ve never seen these two averages so close together; usually, the median price for new construction homes is way higher. 

There were 887 home sales in November, which constituted a 2.5% year-over-year increase. Only 408 homes were listed on the market, which is a whopping 75% decrease compared to the 16,031 listings we saw in November 2019. Why did we see an increase in home sales and a decrease in inventory? I briefly touched on this in my last market update, but these numbers are a snapshot from the last day of the month. Whatever’s available on that day is marked as inventory. Since the average days on market is just 18 days for all homes, they can be listed and sold without ever being counted as inventory.

 

The average days on market for resale homes is 13 days, and we’re often seeing these properties go under contract in just a handful of days with multiple offers. The average days on market for new construction homes is 29 days, so as with other types of properties, these can be listed and sold without ever being counted as inventory.

 

"Home sales are expected to grow by 7% in 2021, and

prices are projected to increase by 3% to 4%."

 

Mortgage rates hovered around 2.77% last month, which is a 24% drop compared to last year. Based on the current median price, that’s a monthly mortgage payment of about $1,400 (assuming you were to put down 20%). Mortgage rates are forecasted to remain low throughout 2021. According to Freddie Mac, interest rates for a 30-year fixed mortgage are expected to remain at or near 3%. Of course, these low rates will continue to make homes more affordable and drive demand in the coming year. 

 

Additionally, home sales are expected to grow by 7% in 2021, and prices are projected to increase by 3% to 4%. This implies that our market will stabilize. Granted, our area experiences higher price increases than the national average. 

If you’d like to know more about our market or how these numbers affect your buying or selling plans, don’t hesitate to reach out to me. I’d love to speak with you. If you’re thinking of selling soon, just know that our market could use the inventory, and the demand is definitely there. I hope you have a wonderful rest of 2020, and I’ll see you in the new year!