With spring just around the corner, it’s the perfect time to become more familiar with what’s happening in the market. Whether you are searching for a new address or contemplating selling your current home, we are here to keep you in the loop on all things real estate.
Interest rates, inventory, cost of materials, income, and unemployment are the most crucial variables that impact the real estate market for both pre-loved and new-construction homes.
As we look at the real estate data for 2022 and the first month of 2023, Idaho’s real estate market is unique as the data is a reflection of the delta between the slow market correction of the most recent twelve months as a result of the relocation surge of 2020-2021.
Resale Market Update
Entering the new year, the Treasure Valley housing market saw a decline in both price and sales. With the rise in interest rates and the hustle of the holidays, Ada County resale home prices fell just under 10% year-over-year to $487,495. Canyon County home prices decreased to just over $395,000, or by 6.4% year-over-year
Although the decline in home prices is mainly due to the increase in interest rates, it’s important to reiterate that the seasons also play a role in the ebb and flow of the housing market.
Continuing into the second week of January, there were 654 existing homes available on the market– an increase of 172.5% compared to the second week of January 2022. The uptick in inventory encouraged buyers to take their time as they house shopped, which stretched days on market to a median of 60 days compared to 22 days one year ago.
January ended with the median sales price on existing homes at $465,000, a decrease of just over 13% compared to the same week a year ago.
The Federal Reserve’s attempt to curb inflation by increasing interest rates, combined with decreased housing prices, resulted in an increase in pending sales. In the first week of February, pending sales were up 10.8% compared to the same week last year. This is the first increase in new contracts since May 2022.
New Construction Market Update
New construction experienced the biggest hit in the market correction of 2022. The median sales price of a new construction home in Ada County in January 2022 was just shy of $589,000. Closing the month of January 2023, new construction prices decreased by 16%, bringing the median sales price down to a rounded $495,000.
With January’s new construction data, we welcomed the 34.5% increase in pending new construction sales in February’s first couple of weeks. While the slowing market has been the talk of the town since the spring of last year, the trend of increased pending contracts indicates an improvement in buyer confidence.
In addition to the rise in pending contracts, open house attendance has increased since the beginning of the year. And our preferred lender, Movement Mortgage, has confirmed an increase of 7.4% in loan applications in the second week of February.
As interest rates continue the downward trend and more buyers move forward with their home search, lack of inventory could be an issue. As we approach the peak real estate season of spring and transition into summer, we may see a slight increase in home prices.
The most recent data shows signs the market correction has most likely bottomed out, and a new baseline is being established. At the Mike Brown Group, we are acutely aware of the importance of staying attuned to the ever-changing market. We are here to help guide you on one of the most important journeys you will ever take; your journey home.