Here’s what you should know about our real estate market right now.
Our real estate market is on fire. As we close out September, we have all kinds of new records that are being broken.
Back in August, Ada County hit a new all-time high with a median sales price of $400,000. The median price of existing homes is at $385,000, while the new construction median price is $445,000.
We’ve also seen a dramatic decrease in homes for sale over the last year. There are 72% fewer homes for sale now than there were at this time last year. We have just 0.3 months of inventory, so there are a very limited number of homes for buyers to choose from. With inventory extremely low and lumber prices increasing, new homes are only going to get more expensive. Lumber is actually up 80% in cost since April.
Despite low inventory, off-market new construction homes are allowing us to have a more consistent sales numbers. With so many buyers out looking, builders are selling homes that aren’t even built yet and therefore not reflected in the stats because they don’t exist. In August, nearly 25% of new homes sold were not previously listed on the MLS. This should give buyers some hope that there are still options available even though things might seem bleak.
"We could still see another surge after the election."
The main reason demand is so high right now is due to record-low mortgage interest rates. The average rate at the last market peak in August 2006 was 6.5%. Today, buyers are locking in rates under 3%. This has kept monthly payments roughly the same despite the increase in prices over the years.
As you know, we have an election coming up. What does that mean for home sales? Generally speaking, elections breed uncertainty and people don’t like that. With everything that's going on right now, people are nervous about whether they should sell now or wait until the dust settles. Historically speaking, you typically see a decline in sales and prices leading up to an election, but we haven’t seen that decline in 2020. Part of that is due to pent-up demand from the COVID lockdown and demand for homes in this area in general remains high. We could still see another surge after the election.
This is truly a unique year with everything that’s gone on. From what I’m seeing out in the market right now, I don’t anticipate a slowdown at all this fall or winter.
If you have any questions for me about the market or real estate in general, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.