Builders and prospective home sellers have been unable to keep up with the persistent demand from homebuyers, stemming from general population growth, Millennials "aging into" the traditional homeownership years, in-migration due to our comparative affordability, and now, the ability for many to work from anywhere.
These reasons, coupled with historically low mortgage rates, have resulted in buyer demand outpacing supply for years, which has been driving the growth in home prices and increasing the speed of the market. In February 2021, the median sales price was $452,400 — up 25.5% year-over-year — and the average days on market metric was 19 days — down 62.0% year-over-year.
Rising home prices are good news for prospective sellers, allowing them to utilize any equity gained to help with the purchase of their next home or a variety of other opportunities. According to a recent Homeowner Equity Insights report from CoreLogic, Idaho ranked second among all states in which homeowners gained the most equity between 2019 and 2020, $48,500 on average year-over-year.
Despite the equity sellers may bring to their next purchase, the tight supply of inventory has made some hesitate to put their current home up for sale until they find their next one.
At the end of February 2021, there were just 168 existing homes for sale — 51.2% fewer than in February 2020. However, there were 65 more homes for sale at the end of February than in January, an increase of 63.1% month-over-month, which we hope is an early indicator of more inventory coming online as the weather warms up.
Looking at weekly activity through the second week of March, new listings were nearly even with 2020 and just below 2019. This is a trend BRR will continue to monitor, keeping in mind any year-over-year comparisons to April 2020 will be skewed due to COVID-19 restrictions.
For those shopping in the new construction segment, there were just 135 homes for sale at the end of February — 80.6% less than the same month last year, and a month-over-month decrease of 18.7%. However, we have heard from some builders that they are selling properties yet-to-be-built, meaning more new homes are available than indicated in the inventory counts.
This tight supply has contributed to the fast, competitive market with homes receiving accepted offers quickly after being listed. Looking at just the existing/resale segment, in February, homes were on the market for just 10 days on average, compared to 32 days last year — a decrease of 68.8% and the fastest we have on record.
If you are considering selling your home soon or anytime this year, talk to a REALTOR® right away. Together, you can make a plan that will coordinate your sale and purchase around a timeline that best suits you, keeping these fast market times in mind.
In this planning stage and as part of this pre-sale consultation, your REALTOR® will advise you on what's needed to prepare your home, such as how to declutter, how much to invest in staging, repairs, or updates (or even if that is needed) and will then coordinate the professional marketing to help your home show best and be seen by the widest audience of potential buyers.
Your REALTOR® can also prepare you for the financial and legal implications related to your home sale and purchase, including, but not limited to the following:
- Determining the appropriate pricing strategy based on nearby sales and the demand for homes like yours.
- How to best evaluate multiple offers and which contingencies you are willing to accept from buyers (or not).
- How to avoid fair housing violations when marketing the home and evaluating offers.
- Tips to keep you safe and your property secure as it relates to COVID-19, audio and video recording devices, property photos, and other potential risk factors.
- Disclosure of adverse material facts that may be present on the property and whether a pre-listing inspection or home warranty may be worthwhile.
- Ways to mitigate any capital gains tax, utilize a 1031 tax-deferred exchange or bridge loan, whether or not you should consider a leaseback… and much more.
In each of our reports in 2021, BRR is focusing on the various phases of a real estate transaction to help consumers be prepared before, during, and after a real estate transaction, showing them what their REALTOR® will be doing for them along every step, and the key data points they can look for to make sense of the market.