Once again in the City of Eagle, we see that home prices continue to rise, while activity has dropped compared to last year. But something seemed off.
(click here to check out the April 2020 report)
When I look at the numbers, specifically in Eagle, from May (and even April) I am confused. Aren’t we in a worldwide pandemic? Haven’t people been losing their jobs? Shouldn’t we see prices drop instead of going up?
But with a deeper look, we see that the foundational principle of economics still holds true: the law of supply and demand.
In May of 2019, 111 properties went pending in Eagle. In May of 2020, pendings dropped to 102, about 8% less. In a lot of ways, pendings reflect demand, as they require an offer from a buyer. It isn’t a perfect indicator, since a pending contract requires both a buyer and seller to agree to terms, but it is one metric we can look at.
But on the supply side, we see a much more dramatic decrease in available homes. In May 2019, 187 properties in Eagle, Idaho were listed for sale. In May 2020, only 122. That is a drop of nearly 35%.
So while the demand has slowed, the supply of homes in the Eagle, Idaho real estate market has dropped even further. This, by itself, would be enough to drive up prices. But let’s not forget that supply in Eagle was already low. The months of inventory remains at under 3 months, under a balanced market of 4-6 months.
The trend does not look like it is going to stop this June. Last year from June 1-12, 2019, 61 listings hit the market in Eagle. From June 1-12, 2020 only 40 listings hit the market. That’s a drop of 34%. That’s great news for sellers. But buyers are likely to pay the price.
My advice to sellers: continue to be smart and market your homes professionally. It is still a numbers game and the more people that see your home, the more options you will have.
My advice to buyers: get creative and look for other ways to entice a seller beyond the sales price. This may be the terms of the deal including closing timeframe and leaseback. Be an asset to the seller.
To see a list of homes that are under construction but available for purchase, click here.
To see homes that are currently on the market and available to move into today, click here.