Ada County results for August showed signs of a slowing market. Sales (closings) were down 2% from last August and pending contracts, a sign of things to come, were down 12%, the biggest year-to-year decreases in quite a while.
While new home closings were up 18% compared to last August, resale home closings were down 7.7%. Pending new home sales were down 3% compared to pending sales for last August and were down 14% from last month.
Is this a temporary slowdown or a market turn? It's too soon to tell but the increase in average prices (27% over the last two years), the decrease in affordability, especially for local residents, and the amount our market has depended on the immigration of home buyers all point to a market that will probably experience a correction at some time in the future.
Is there good news that could come out of a market turn? Right now, we have 33 days of inventory available for sale and occupancy, up from 23 days at the end of May. (Most of the new home inventory that is reported isn't ready for occupancy.) A slowing of sales could create more inventory and more inventory means there should be more choices for buyers.
Even though we've had an increase in inventory in recent months, the chart below shows how far we are from the inventory level needed to approach a "balanced" market.