Disappearing Real Estate Inventory
The Boise real estate market, similar to other markets in the county, is expected to do very well this year as mortgage rates remain at historic lows and the "Boise secret is out". We've seen a record number of Californians as well as buyers from other states moving to Boise and surrounding areas in the last few years. One of the main challenges to the real estate sales is the lack of available homes. This month, move.com published a report showing that 2020 is beginning with the lowest available real estate inventory in two years. According to this report: “Last month saw the largest year-over-year decline of housing inventory in almost three years with a dramatic 12 percent decline, pushing the number of homes for sale in the U.S. to the lowest level since January 2018.” Again, this is even more pronounced here in Boise and Treasure Valley.
The report showed the decline in inventory across all price points - see below:
George Ratiu, Senior Economist at realtor.com, explains how this drop in available homes for sale comes at a time when more buyers are expected to enter the market: “The market is struggling with a large housing undersupply just as 4.8 million millennials are reaching 30-years of age in 2020, a prime age for many to purchase their first home. The significant inventory drop…is a harbinger of the continuing imbalance expected to plague this year’s markets, as the number of homes for sale are poised to reach historically low levels.
What does this mean to you?
If You’re a Buyer…
Be patient during your home search. It may take time to find a home you love. Once you do, however, be ready to move forward quickly. Get pre-approved for a mortgage, be ready to make a competitive offer from the start, and understand that a shortage in inventory could lead to the resurgence of bidding wars. Calculate just how far you’re willing to go to secure a home, if you truly love it.
If You’re a Seller…
You are in the driver’s seat. We have a seller's market. When there is a shortage of an item at the same time there is a strong demand for that item, the seller of that item is in a good position to negotiate. Whether it is price, moving date, possible repairs, or anything else, you’ll be able to demand more from a potential purchaser at a time like this – especially if you have multiple interested buyers, resulting in multiple offers. Stay reasonable, but understand you probably have the upper hand.
The real estate market will remain strong throughout 2020. Understand what that means to you, whether you’re buying, selling, or doing both.