This has been another good year for sellers in the Idaho Falls real estate market. But the market is showing signs of balancing out in the near future, according to the Greater Idaho Falls Association of Realtors.
The average selling price of a home in Bonneville County has reached an all-time high of $218,714 this year, said Greater Idaho Falls Association of Realtors president Brett Magleby. That’s about $21,000, or 11 percent, higher than 2017’s average of $197,699.
High prices can be attributed to the low inventory of homes on the market, Magleby said. Add in historic lows for the average days a home is on the market (42) and rising interest rates (4.63 percent in Idaho Falls, according to Bankrate), which decreases buying power, and you have a recipe for a seller’s market.
Tariffs also are driving up prices for new homes. The National Association of Home Builders reports that the tariffs on $200 billion worth of imports from China, announced by the Department of Commerce in July, affect hundreds of items that “are ubiquitous in home construction and remodeling.”
Additionally, The Washington Post reported that tariffs on Canadian lumber have added “$2,000 to the price of a typical new home.”
“This is not a market that buyers have control in,” Magleby said.
Year-to-date sales, while still among historic highs, are down 4 percent compared to 2017. Last year, 2,081 homes were sold in Bonneville County. Through October this year 1,725 homes were sold.
While Bonneville County would be on pace to reach 2,070 homes sold in 2018, based on a 173-per-month average, November and December are typically slower months, Magleby said, so by the end of the year that 2,070 projection likely will be lower.
The time is right to sell a house but potential sellers are hesitant to list their properties, based on the selection of homes on the market, possibly because they may be worried where they would move to after their homes sell.
“We haven’t been able to put our finger on why people aren’t putting their house on the market — because prices are good,” Magleby said. “I think it’s selection of houses on the market that keep them from moving onward and upward.”
The average days homes are on the market hit historic lows this year at 42. That number has decreased by 65 percent since 2013, when the average for days on the market was 120.
“It tells us that you have to be prepared when you are buying a home,” Magleby said. “You can’t go out and look at 20 houses for sale. You’re going to have to have a Realtor that’s looking (out) for you. Multiple offers are already on that place within the first week of having it on the market.”
In a seller’s market, where homes are in short supply, Magleby recommends, as early as possible before buying a home, getting prequalified for a loan, hooking up with a Realtor and keeping an eye on interest rates.
Ryan Jensen, assistant vice president at Alliance Title, an Idaho Falls-based title company, also saw sales down this year compared to 2017, due to low inventory and rising interest rates.
Jensen said he expects sales volume in 2019 to mirror 2018, with a potential 3 to 6 percent decrease in sales.
“I would anticipate inventory, the cost of building and rising interest rates would be the three factors that influence the kind of market we have next year,” Jensen said.
Magleby sees a brighter future for homebuyers. He said he sees a market balance shift on the horizon, with home inventory rising and appreciation, or the increase of property value over time, slowing down.
“It’s going to balance out next year,” Magleby said. “Sellers are going to try to get out while the getting’s still good.”