Posts in category 'News'

To view the Treasure Valley homes currently for sale, CLICK HERE.

The median sales price for homes in Ada County was $561,500 in October, up 4.0% from the month prior and 5.4% higher than October 2021. Until last month, there have been month-over-month declines in the median sales prices since the peak of $602,250 in May 2022. We haven't seen a year-over-year decline in the overall median sales price since October 2014.

Higher mortgage interest rates have decreased purchase power for buyers and cooled demand, causing some buyers to make budget adjustments and others to press pause on their home search. According to Freddie Mac, retrieved from FRED, Federal Reserve Bank of St. Louis, the average 30-year fixed-rate mortgage was 7.08% on October 27, 2022, more than double the 3.14% average in October 2021.

With the steady incline in rates and dampened demand, why didn't prices dip last month? While there were 32.5% fewer home sales in October 2022 than in 2021, there were still 670 home sales, and the mix of those sales gives us a clue as to why the overall median sales price didn't budge much in October.

There are two primary segments to housing inventory — existing/resale homes, and new construction homes. New home sales made up 31.9%, or nearly a third, of all home sales in October. The median sales price for new homes was $657,500, while the median sales price for existing homes was $500,000, down 3.7% from October 2021. This significant share of new home sales pulled up the overall median sales price.

Due to rising mortgage interest rates, we've watched price growth decelerate on a monthly basis since May of this year. The fact that October didn't bring any major changes, price wise, indicates home values are not likely poised to plummet, though we may see more adjustments to come. Sales have slowed but won't disappear — regardless of market conditions, life continues to go on, and some life events require a move.

Buyers who were able to purchase this fall had more negotiation power than we've seen in years and used creative tactics, like using closing cost credits to buy down the interest rate, to combat higher monthly payments. With price growth slowing and more inventory to choose from, buyers have been able to snag existing homes at a lower price point than they would have a year ago, with the option to refinance down the road if interest rates go down.

To view the Treasure Valley homes currently for sale, CLICK HERE.

The median sales price for homes in Ada County was $540,000 in September, down 4.4%, or $25,000, from the month prior, but 0.9% higher than September 2021. The median sales price dropped for the last four months, but we've yet to see a year-over-year decline in overall prices. After peaking at 44.0% in May 2021, annual price growth has trended down and slowed significantly, due in large part to higher mortgage interest rates.

However, when we look at the existing/resale segment, home prices have declined year-over-year. The median sales price for existing homes was $500,000 in September, a 4.8% dip from the same month a year prior.

As we've mentioned in previous market reports, low mortgage interest rates drive demand for housing by increasing buyer's purchase power. The opposite is also true — higher mortgage interest rates decrease purchase power and cool demand. According to Freddie Mac, retrieved from FRED, Federal Reserve Bank of St. Louis, the average 30 year fixed-rate mortgage was 6.7% on September 29, 2022, more than double the 3.0% average in September 2021 and throughout the majority of last year.

The Federal Reserve's rate hikes and efforts to reduce inflation have had major impacts on the housing market, resulting in slower price growth and fewer sales. Buyers are making budget adjustments or pressing pause on their home search as they face higher monthly mortgage payments.

Single family home sales dipped 30.3% last month in Ada County, and September marked the seventh month of year-over-year declines in sales. Compared to last year, sales are 15.1% lower year-to-date.

Lessened demand has also given inventory a chance to accumulate, with 2,420 available listings on the Intermountain MLS at the end of the month, a 93.8% increase from September 2021. More inventory is good news for those who are able to buy in today's market, as they aren't facing the fierce competition for homes that we experienced a year ago. If rates drop in the future, buyers may opt to refinance and save on their monthly payments. Additionally, buyers have gained negotiation power.

And negotiate they have — the average original list price received for existing/resale homes in September was 92.5%, which means that on average, buyers paid less than asking through a lower accepted offer, price reductions, or seller concessions. In September 2021, the average original list price received was 98.0%, meaning that on average, buyers paid slightly less than asking price for existing homes. Another metric that indicates competition that's made a significant shift from a year ago is Days on Market. Existing homes that closed in September spent an average of 37 days on the market before going under contract, compared to 17 days in September 2021.

With the shifts in the housing market and economists talking about an overall recession, many are naturally asking, "What's next?" While BRR does not make forecasts, REALTOR.com reports that housing experts anticipate that prices will decline in the next year or so, particularly in markets like ours, where we saw prices appreciate so quickly.

Understanding what's happening with the housing market is helpful, but if you're considering buying or selling a home, it's more important to consider your unique circumstances and needs. Work with a real estate agent and a lender to learn about your options for achieving your real estate goals and come up with a plan that works for you.