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Wednesday, January 13, 2016

Ada County December Market Report

From the Ada County Association of Realtors


December 2015 Market Report: Home Prices and Sales Up Despite Rates; Inventory Still Way Down


January 12, 2016 by  · Leave a Comment

In December 2015, the median sales price of all single-family homes in Ada County, as tracked by the Intermountain MLS, was at $232,500, up 8.4% compared to December 2014. The median sales price of existing single-family homes was $208,975, up 7.2% year-over-year, and the new construction median sales price was $323,813, up 7.6% year-over-year.

There were 785 closed sales in December 2015, up 28.5% over the same month last year. This brought the total dollar volume sold last month was $210.1 million, up 34.1% compared to last year.

After the Federal Reserve announced they would raise the interest rate at the end of last year, it caused concern that mortgage rates would soon follow. Economists were quick to remind everyone that there are many factors that determine where mortgage rates go, in addition to the federal interest rate. Case in point, days after the interest rate increase was announced, mortgage rates moved north of 4%, then dipped back below that mark at the start of January.

In a recent article, REALTOR.com said it expects 30-year fixed rates to “end 2016 about 60 basis points higher than they are [now, and note] that level of increase is manageable, as consumers will have multiple tactics to mitigate some of that increase.” This is especially true for buyers at lower price points. While they may see some impact to their monthly mortgage payments, it shouldn’t make purchasing in 2016 unaffordable.

There were 964 pending sales in December 2015, up 35.4% compared to December 2014, which bodes well for closed sales figures in the first quarter of 2016. “The growth in pending sales shows that home buyers were not deterred by the news of a rate change,” said Carey Farmer, 2016 President of the Ada County Association of REALTORS®. “I’m certainly seeing that with my own clients, as they continue to shop for homes and write offers. The bigger concern is the continued lack of inventory.”

In December 2015, the months supply of inventory for all single-family homes in Ada County was at 2.5 months, down 28.6% from last year. New construction was at 5.3 months of supply, down 26.4% from last year, while existing homes were only at 1.7 months of supply, down 32.0%. (A balanced market—not favoring buyers or sellers—is typically between 4-6 months of supply.)

“This time of year people think they must wait for the ‘spring market’ to list their homes. However, I have spoken with many homeowners who are in a great position to list now, and who want to sell now, and in doing so will get in front of buyers who are desperate for more inventory,” said Farmer, who is a REALTOR® with Group One in Eagle. “Buyer demand is there, we just need more homes to show them.”


 

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