RE/MAX: Boise, Salt Lake City and Phoenix Saw the Biggest Jump in Median Sales Price in September

According to the latest RE/MAX National Housing Report, housing inventory levels remain extremely constricted across the U.S. (for context, Months Supply of Inventory was 1.5; a six months supply indicates a market balanced equally between buyers and sellers). These levels, unsurprisingly, contributed to the rise in median sales price seen across the 52 metros measured in the report. In fact, September marked the 33rd consecutive month with an increase in home prices year over year. In September 2021, the median of all 52 metro Median Sales Prices was $329,000, down 1.1% compared to August 2021, but up 12.5% from September 2020. Thirty-one metro areas increased year-over-year by double-digit percentages, led by Boise, Idaho, at +28.8%, Salt Lake City, Utah, at +27.3%, and Phoenix, Arizona, at +24.5%.

Despite these competitive conditions and the typical seasonal dip in home sales (closed transactions were down 4.2% year over year), home sales maintained strong momentum overall in September indicating buyer demand remains high. For those exhausted buyers out there looking for a more promising metric, there’s promising news: the U.S. Census Bureau and Department of Housing and Urban Development’s new residential construction report showed multi-family housing starts were up over 17% from August 2020 beating expectations.

“This was the second-most active September for sales in 14 years, trailing only 2020, which was an outlier in many ways,” says Nick Bailey, President, RE/MAX, LLC. “Plus, the expected seasonal drop in sales from August to September was half of what it usually is, indicating that buyers and sellers are still very much on the move.

“The intensity on the buy side has been exhausting, but buyers can navigate the ups and downs with the help of a full-time, experienced professional. Affordability remains a challenge in most metros, where tight inventory continues to push prices. Homebuilders are trying to fill the gap – especially with multi-family home construction – but many of them are held up by shortages in labor and materials. That said, the market’s still active – just not quite at the pace we saw earlier this year.”

What is it about Boise, Salt Lake City and Phoenix that led to home prices surging by double-digit percentages? Leveraging data from the Bureau of Economic Analysis (BEA), Forbes recently analyzed percent changes in annual and quarterly GDP data to determine which states have seen their economies grow the fastest. According to their findings, Utah, Idaho and Arizona were among the top-10 best states by GDP growth, in line with the rise in demand seen in the RE/MAX report for these respective areas.

Josh Horner of RE/MAX Masters in Salt Lake City credits the burgeoning local economy as the reason why they’ve seen a spike in population growth and a hotter real estate market.

In a statement to Utah-based Deseret News, Horner said, Utah’s housing market in particular “seems to be stronger and perhaps more durable than other markets.”

“Couple that with low taxes, a favorable business climate and major projects like the $4 billion airport renovation, a 20,000 acre inland port, and a brand new ski resort on the backside of Deer Valley,” he said. “Utah currently has a very durable economy and real estate market.”

Ann Cassero of RE/MAX Desert Showcase in Peoria, Arizona, attributes Phoenix’s high popularity to a continued legacy as a retirement destination, investor hub for rental properties and newfound paradise for West Coast escapees.

“In the past, decades ago, the smog escapees left Southern California and went to Northern California at the same time as many New Yorkers were heading to California. Then it was both southern and northern Californians heading to Oregon and Washington. Now it’s all of the West Coast heading eastward,” Cassero says.

“Even with the explosive growth Boise has seen this past year, the area still offers a type of lifestyle people are drawn to,” says Yuri Blanco of RE/MAX Executives in Eagle, Idaho. “With employment opportunities continuing to grow here as businesses thrive in Boise, it’s still a great time to buy here even as affordability remains a challenge.”

With September home prices being the fourth highest in the 14-year history of the report, it’s worth noting August-to-September averages for 2015 to 2019* for the metrics measured to illustrate what’s typical in late summer-early fall:

• The drop in home sales of 7.0% from August was less than half of the 2015-2019 average decline of 15.3%. Year over year, sales were down 4.2%.

• The month-over-month Median Sales Price decline of 1.1% was one-third of the 2015-2019 average August-to-September drop of 3.4%.

• Reflecting both the number of homes coming on the market and the velocity of sales, the 4.9% month-over-month drop in active inventory was more than double the 2015-2019 average August-to-September decline of 2.3%. Inventory was down 23.6% year over year. Nine months into 2021, inventory has declined month over month in all but June and July.
*Excluding abnormally high second-half home sales in 2020 which skewed year-over-year comparisons

Whether you’re making a move to Boise, Phoenix, Salt Lake City, or a city in any of the more than 110 countries and territories with a RE/MAX presence, a RE/MAX agent can help navigate this complex environment and serve as a trusted advisor for one of the largest transactions in your lifetime.

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