Housing inventory dropped in December. How did that affect prices?
From November to December, home prices in Ada County increased more than any single-month increase since June to July.
For several months this fall, the market stayed steady. But from November to December, the median price of an Ada County single-family home increased from $537,900 to $546,000, according to the Intermountain Multiple Listing Service. The rise coincides with a decrease in inventory, but it’s unclear what it signals for the year ahead.
Though the median price increased, for-sale homes’ average days on the market increased from 29 to 32. That’s a big difference from when homes averaged 10 days on the market in June. Sixty-three more homes sold in Ada County in December (954) than in November, but there were 214 fewer active listings (582) and 279 less pending listings (1,198).
In Canyon County, the median price of a single-family home rose from $409,900 to $419,480. The average days on market also rose from 31 to 41.
Inventory of resale homes in Ada County has now dropped to 0.4 months, according to Christina Ward, an associate broker for Christina & Co. of Keller Williams Realty Boise. Inventory means how long it would take to run out of housing supply if no more homes came on the market.
For much of the first half of 2021, inventory was less than a month. It rose to 1.3 months in both August and September, Ward said. But then it dropped to 1.1 months in October, 0.8 months in November and 0.4 in December.
A balanced market is widely considered by industry experts to be when there’s between four and six months of inventory. The Treasure Valley has been in a seller’s market for years.
“I was really gearing up thinking this is going to be the new normal where we start to see a rise from 1.3 (months of inventory), we’re going to go up in inventory,” Ward said by phone. “And we ended up going down again going into the winter time.”
In September, Ward said the increase in inventory felt like a breath of fresh air. Buyers were perhaps competing with two other offers instead of 10 as they were earlier in the year.
An increase in interest rates, which Ward expects, and an increase in housing supply would be two reasons to cause a shift toward a more buyer-friendly market. But predicting the future remains a challenge, and Ward cautions against only looking at shifts from one month to the next.
In December 2020, the median price of an Ada County home was $434,628. In one year, the price increased 25.6%. The relative affordability that once helped attract buyers from more expensive places has partially worn off. The effects of the lingering COVID-19 pandemic are also unclear.
“With inventory going down, it’s really going to depend on are people still working from home and are they going to continue to move here?” Ward said. “Or has everyone moved here that’s going to move here?”
Kuna gains national attention
On Friday, Realtor.com ranked its top 10 markets for first-time homebuyers, and Kuna made the list.
The website based its top 10 on factors including affordability, available listings, people ages 25-34, available jobs and commute times.
“Young homebuyers are likely to have better luck in Kuna than some of the surrounding towns,” a Realtor.com news release read.
Ward said a significant portion of the homes for sale in Kuna are new construction, which could make it a more attractive location than other nearby cities.
Other details from the latest monthly listing-service report:
- Of the 343 homes sold in December in Ada County, 335 cost at least $400,000.
- Newly constructed homes in Ada County dropped from a median price of $601,301 in November to $579,990 in December.
- Highest median prices: Eagle, $899,000; Northeast Boise, $793,055; North Boise, $783,500.
- Lowest median prices: Garden City, $370,000; Southwest Caldwell, $387,495; Wilder, 387,500.
This story was originally published January 11, 2022 at 4:00 AM.
