Market update provided by Jim Paulson, Broker-Owner of Progressive Realty Corp in Meridian, Idaho.
Inventory is dropping even though historically it is still too high. We have over nine months of available inventory based on current sales levels.
Many homes in Meridian, Idaho are sitting stagnant on the market because home sellers have refused to price them at realistic prices. If you look at the raw numbers from the MLS it is easy to see why some homes are selling and some aren’t!
Listings under contract
Listings sold in Sept.
These numbers illustrate what a few people have been saying on this website for a year – we need more affordable homes since that is what is selling. When you look at the median price of all the homes that sold in Meridian last month, you get $215,000. If you don’t like that number look at the average and you get $234,283.
One of the main reasons we have excess inventory is that the average price of the homes currently for sale in Meridian is $40,000 over the higher of those two “averages”.
The problem with statistics though is people look at the raw numbers and forget to think about what they really imply. For example, people assume the magic number off the computer that said the “Average DOM” (days on market) in Meridian last month was only 108 for actives and 82 for solds. The problem is, that is the number based on the listing contract period of the sale and doesn’t include the number of times the listing has been cancelled or expired and relisted with another company!
That is why I look at absorption rates instead.
Then you need to look at the seasonality of the market.
We are about to go into the winter months which means we will be slowing down historically. Some sellers in Meridian and other areas in Idaho will begin to pull their house off the market since they won’t want to move in the snow in a few months or don’t want to explain to their kids that Santa will still find them if they move after he has made his list of who has been naughty or nice.
Sales will slow down, but then again inventory drops so absorption rates still apply.
The main thing to comprehend is that real estate is unique so you shouldn’t rely on statistics and averages alone. That is why I don’t use sq. ft. for the $ models. Averages, mean, median, price per sq. ft., location, condition, etc. are all tools that need to be used collectively to get the job done today.