Understanding the real estate market’s fluctuations is crucial for making informed decisions. In this data-driven blog post, we will analyze year-over-year market conditions in Ada County, Idaho, focusing on sales, inventory, and market balance indicators. We will also discuss the impact of factors such as mortgage products, stagflation, and the economy on the real estate market. information is provided by Boise Regional REALTORS® (BRR) March 2023 Market Report (ADA county, Boise Idaho) https://www.boirealtors.com/
Year-Over-Year Comparison of Market Activity and Sales in Ada County
In March 2023, Ada County recorded 742 home sales, a 9.3% decrease compared to March 2022. Despite the decline, this marked the second consecutive month of single-digit year-over-year declines, signaling increased market activity. Additionally, homes spent an average of 72 days on the market before going under contract in March 2023, compared to 78 days in February 2023 and an unspecified number of days in March 2022.
Year-Over-Year Comparison of Median Sales Price
The median sales price in Ada County was $483,450 in March 2023, down 16.0% from $575,536 in March 2022. This decline represents the fifth consecutive month of year-over-year decreases in price, raising questions about whether the market is experiencing a crash or temporary stagflation.
Year-Over-Year Comparison of Inventory and Months’ Supply of Inventory (MSI) in Ada County
In March 2023, Ada County had 1,134 single-family homes available, split between 613 existing homes and 521 new construction homes. Comparing this to March 2022, there has been a significant increase in inventory, although the exact percentage is unspecified.
The Months’ Supply of Inventory (MSI) is a crucial metric for determining how many months the current inventory would take to sell without any new listings being added. In March 2023, the MSI for all single-family homes was 1.6, with 1.3 for existing homes and 2.3 for new-construction homes. Although the exact MSI figures for March 2022 are not available, the growth in inventory suggests an improvement in market balance.
Market Balance and the Impact of Mortgage Products
A balanced market is one that does not favor buyers or sellers and is generally achieved when the MSI is between 4-6 months. With the current MSI levels in Ada County, the market remains unbalanced, favoring sellers. However, with the growth in inventory and longer days on the market, buyers have more options and time to make decisions – an opportunity they haven’t had in recent years.
Mortgage products, such as the 40-year mortgage and interest-only payments on a 30-year mortgage, can also affect the real estate market. These products may help buyers enter the market, but they could also contribute to market imbalance and possible stagnation.
Year-over-year comparisons reveal fluctuations in the real estate market, with median sales prices declining and inventory slowly accumulating. While debates continue over whether the market is crashing or experiencing stagflation, it’s essential for both buyers and sellers to stay informed and make strategic decisions based on the available data. Factors such as mortgage products, stagflation, and the economy can significantly impact the real estate market, making it crucial to monitor trends and adjust strategies accordingly.
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