The Boise housing market has undergone quite a recovery since the market collapse. Since the market hit bottom, Boise real estate has seen an increase of over 25 percent in average price growth. At the same time, we have seen an increase in equity gains that have made the market a very desirable place to live. Positive trends have equally favored Boise real estate investing as well. Low unemployment numbers, increased job growth and a below average local foreclosure rate all add to the Boise housing market’s appeal. Not only has Boise regained its footing, it has begun to thrive. With solid market fundamentals in place, this growth does not appear to be slowing down any time soon.
The current median home price in the Boise housing market is $178,700. While this number is below the national average of $203,867; it has appreciated at a rate of 12.7 percent over the course of a year. Over the last three years, Boise real estate has appreciated by as much as 42.7 percent, well above the already impressive national average of 28.8 percent. Boise is really on a blistering pace. Current values may be below the national average, but they are growing at what appears to be a sustainable pace this year. In fact, current home price numbers are not far from pre-collapse levels. This should be viewed as a sign that Boise real estate did not grow faster than it should have at the height of the market, and did not dip too low at the bottom. This makes for an ideal market to reside or invest in.
Increased home prices lead to increased equity. In recent years, Boise real estate has not only managed to stay afloat, but in some cases exceed national equity averages. Over the past five years, Boise has shown positive equity gains in every quarter. The following highlights how much equity has been gained relative to the year of purchase.
- Homes purchased in the Boise housing market one year ago have appreciated by an average of $22,596; whereas the national average was $15,753 over the same period.
- Homes purchased in the Boise housing market three years ago have appreciated by an average of $59,851; whereas the national average was $53,565 over the same period.
- Homes purchased in the Boise housing market five years ago have appreciated by an average of $52,237; whereas the national average was $47,444 over the same period.
- Homes purchased in the Boise housing market seven years ago appreciated by as much as $4,096; whereas the national average increased $17,200 over the same period.
The Boise real estate market has made quite a recovery from where it was just seven years ago. Five years ago, there was a decrease in equity. From that point, the market has completely turned around. This bodes well for the market moving forward, and is something the Boise real estate investing community should be excited about.
The general outlook for the state of Idaho, and specifically Boise, appears to be positive. The state economic index is up slightly from last month, and on par with national averages. Over the last 36 months, this figure is 11.5 percent, whereas the national average was only 9.6 percent. Great unemployment numbers are one of the main reasons Boise’s outlook is so encouraging. Boise’s unemployment rate is at a healthy 4.1 percent. This is down from 5.2 percent just twelve months ago. Both of these are lower than the current 5.5 percent national average. What is even more promising, however, is the rate at which local jobs are growing. The twelve month job growth rate is currently 1.4 percent, which is lower than the national average, but still relatively healthy. A strong local economy and sustained employment are giving buyers confidence – just what the Boise real estate market needs.
This confidence is reflected in the amount of new housing permits hitting the market. Over the past twelve months, Boise added over 3,400 new single-family housing permits. The eight year average for this number is slightly over 2,800 a month. This current level of construction represents a 21 percent increase over the long-term average. This number is down slightly from the same time last year, but appears to still have legs. In addition to strong economics, another reason for the increase in construction is in the level of local affordability. The monthly mortgage payment to income ratio for Boise last quarter was 10 percent. This is below the national average of 14.3 percent. Boise is historically strong in this area. With strong employment, increased job growth, a growing economy and a high level of affordability, Boise is truly one of the most desirable places in the country to purchase a home.
Foreclosures were never as big of a problem in the Boise housing market as they were for the rest of the country. At the height of the collapse, when the U.S. national foreclosure rate topped out at 4.5 percent, Boise never exceeded 4 percent. In recent years, it has stayed at least 2 percentage points below national averages for each of the past ten years.
According to RealtyTrac, Boise real estate investing should have about 263 foreclosures to choose from. Subsequently, the distressed property market in Boise should provide investors with plenty of opportunities, even though they have declined about 30 percent in the last 12 months. Of course, investors are more likely attracted to the spreads these homes offer. Again, according to RealtyTrac, distressed properties in the Boise real estate market sell for a lot less than non-distressed homes.
Boise has seen tremendous price and equity gains based on solid fundamentals. With solid fundamentals in place, it bodes well that this growth can be sustainable for the long haul.
Boise Housing Market Summary:
- Current Median Home Price: $178,700
- 1-Year Appreciation Rate: 12.7%
- Unemployment Rate: 4.1%
- 1-Year Job Growth Rate: 1.4%
- Population: 214,237
- Median Household Income: $49,583