After passing the $600,000 mark in May 2022, the median sales price for homes in Ada County dropped to $592,090 in June. This was 12.8% higher compared to the same month a year ago. Since 2005, the average year-over-year percent change in home prices in Ada County has been 8.1%.
The incredible price growth was powered by a rapid increase in demand for housing as people transitioned to remote work, the continued household formation of millennials and historically low mortgage interest rates. With an already undersupplied housing market prior to the pandemic, prices shot up as demand outpaced supply.
The buyer pool is lessening due to higher mortgage rates and home prices. Because the demand has slowed down, it has given inventory a chance to catch up. Ultimately, giving the remaining buyers in the market more options.
There were 2,135 homes available for sale at the end of June, a 192.9% increase from June 2021, and the highest inventory we’ve seen since September 2016. Even with the welcome inventory gains, the month’s supply of inventory in June was 2.4 months. A balanced market is defined as a market that does not favor buyers or sellers and is typically between 4-6 months’ supply.
Metrics that indicate competition in the market continued to show signs of normalizing. Focusing on the existing/resale segment, homes that closed last month spent an average of 14 days on the market before going under contract, compared to 10 days in June 2021. Additionally, the average original list price received for existing homes in June was 98.4%, which that on average, buyers paid less than asking through a lower accepted offer, price reductions, or seller concessions. In June 2021, the average original list price received was 103.9%, which means on average, buyers paid more than asking price.
The housing market conditions we experienced for the last two years were unique. Historically low inventory, coupled with rampant demand, resulted in above average price growth and a highly competitive market. The changes we’re seeing in price growth, inventory, and slower market times is moving us toward a more normal market — one where bidding wars are the exception and not the rule, and buyers aren’t having to make split-second decisions and waive contingencies for their offer to even be considered.
Sales also continued to lag in June. There were 818 closed home sales last month, down 16.0% compared to June 2021, and the fourth month of consecutive year-over-year declines.
As the market shifts, sellers may have to adjust their expectations slightly. Offers may not fly in within the hour or first day you list, and your home may not sell for over list price. This isn’t necessarily a bad thing — in fact, it may make your experience less stressful, and sellers are still receiving great values for their homes. Your best bet for selling in today’s market is to price your home appropriately, based on the relevant data, comparables and expertise offered by your real estate agent, and then allow your agent to market your home on the multiple listing service to reach the widest audience possible., and appraisals and home inspections don’t have to be waived in order for an offer to even be considered.
To read more about the trends in the market, please see the Boise Regional Realtors June 2022 Market Report.