Is this the next real estate bubble?
As you could guess, it was a busy first-half of the 2017 residential real estate market. You might be surprised with how much your home has appreciated in value, and wonder if the next real estate bubble is around the corner…?
The Boise Regional REALTORS® have crunched this year’s housing data, and it tells quite the story. Our housing market is growing from consumer demand vs. supply — not from speculation as was common a decade ago. Total dollar volume and sales prices are also being driven up by higher costs for new construction.
Historical Monthly Inventory vs. Median Sales Price for Ada County
Activity for existing and new single-family homes combined between Jan 2004–Jun 2017. Inventory and median sales price rose together through Jul 2007 and fell together through Jan 2012. Since then, inventory has not kept up with demand, pushing the median sales price up 98.5% since Jan 2012.
Historical Monthly Inventory vs. Median Sales Price for Canyon County
Activity for existing and new single-family homes combined between Jan 2007–Jun 2017. Inventory and median sales price fell together through Dec 2011. Since then, inventory has not kept up with demand, pushing the median sales price up 136.0%.
Comparing Existing and New Construction Median Sales Prices
Monthly median sales price activity for existing vs. new single-family homes between Jan 2012–Jun 2017. As of Jun 2017, the new construction median sales price in Ada County was 35.8% higher than existing homes, 44.2% higher than Canyon County new construction, and 97.0% higher than existing homes in Canyon County. New construction in Canyon County was 36.6% higher than existing in the county but 31.2% lower than Ada County’s existing median sales price.
- Higher cost of materials — Lumber +12.9% YTD through May 2017, now higher than the previous peak in April 2004.
- Higher labor costs due to the scarcity of workers — Unfilled construction jobs at the highest level since Sep 2016, although 14% lower than the high in July 2016.
- Higher land prices effect on home values — In Q1-2016 (most recent data), land as 34.9% of a home’s total value in Idaho, up 19.2% from Q1-2015
This information is provided by the Ada County Association of REALTORS®, which began doing business as Boise Regional REALTORS® (BRR) in 2016. BRR is the largest local REALTOR® association in Idaho, with over 4,000 members and two wholly-owned subsidiaries — the Intermountain Multiple Listing Service, Inc. (IMLS) and the Boise Regional REALTORS® Foundation. Source: 2017 Mid-Year Residential Real Estate Update