Idaho Real Estate Market Trends & Analysis

Few markets across the country have been able to keep pace with the Idaho real estate market. A vastly improved economy, in association with an influx of new residents, have elevated price gains past nearly every other state in the last year. Nonetheless, increasing home values continue to receive momentum from the decreasing supply of lower-priced inventory, increasing demand, and the purchasing power awarded to buyers by low mortgage rates.

There is very little to suggest these indicators won’t continue to push prices higher for the foreseeable future. Despite double-digit price gains over the course of 12 months, however, real estate in Idaho is still relatively affordable. Attractive prices, combined with a positive forecast, suggest the Idaho real estate market may be one of the best places to invest now, and for the foreseeable future.

The Top Idaho Real Estate Markets

While the best real estate market in Idaho is up for debate, here’s a list of the cities investors may want to pay special considerations to:

• Boise

• Coeur d’Alene

• Idaho Falls

• Meridian

• Twin Falls

Idaho Real Estate Fees & Regulations

Real Estate

Closing Conducted by:	Escrow
Conveyance:	Warranty Deed

Foreclosure Procedure

Primary Foreclosure Method:	Non-Judicial
Process Period:	5 - 6 months
Notice of Sale:	Trustee
Redemption Period:	None

Taxes

Income Tax:	1.6% - 7.4%
Corporate Tax:	7.60%
Sales Tax:	6.00%
Estate Tax:	No
Inheritance Tax:	No
Median Property Tax:	0.69%
Property Taxes by County:	http://www.tax-rates.org/idaho/property-tax#Counties

Average Transactional Costs

Closing Cost:	$2,440.00
Transfer Fee:	No Fees
Origination Fee:	$1,800.00

Idaho Housing Market Overview

• Median Home Value: $270,900

• 1-Year Appreciation Rate: +13.3%

• Median Home Value (1-Year Forecast): +6.2%

• Median Rent Price: $1,450

• Price-To-Rent Ratio: 15.56

• Average Days On Market: 50

• Unemployment Rate: 2.9% (latest estimate by the Bureau Of Labor Statistics)

• Population: 1,754,208 (latest estimate by the U.S. Census Bureau)

• Median Household Income: $50,985 (latest estimate by the U.S. Census Bureau)

• Percentage Of Vacant Homes: 12.58%

• Foreclosure Rate: 1 in every 4,644

Idaho Median Home Prices

According to Zillow’s latest Home Value Index, the median home value in the Idaho real estate market is $270,900. At their current level, Idaho homes are now valued higher than they have ever been. Having already surpassed pre-recession highs, every price increase represents a new record in Idaho. It is worth noting, however, that real estate in Idaho had to overcome a great deal of obstacles to get to where it is today. Over the course of a decade, in fact, Idaho has seen dramatic price variances.

Not unlike the rest of the country, Idaho was hit hard by the housing bubble. Median home values bottomed out around $141,000 in the first month of 2012. Since then, Idaho real estate prices have increased 92.1%. In that time (from January 2012 to October 2019) median home prices have increased nearly eight consecutive years. To put things into perspective, median home values across the United States managed a much more modest 55.0% increase over the same time.

The incredible momentum witnessed in the Idaho real estate market is directly correlated to the same factors increasing prices across the country: growing optimism in the real estate sector, a strengthening economy, and a distinct lack of available housing. If for nothing else, more buyers are able to actively participate in the market thanks to improving working conditions, opportunities and wages. Nonetheless, there simply aren’t enough homes to meet the growing demands of today’s buyers. Homeowners have been able to increase asking prices in the face of competition.

Real estate has appreciated at nearly twice the rate as the national average, which begs the question: Why? What is it about the Idaho real estate market that enabled prices to increase so dramatically? The answer is simple: affordability. Despite nearly a decade’s worth of appreciation, real estate in Idaho is still relatively affordable. In fact, real estate in Idaho is so affordable that it’s attracting out-of-state buyers from just about everywhere. As recently as 2018, Idaho was recognized as one of the fastest-growing states in the country. Thanks to affordable housing, more people are looking to call Idaho home. However, the same influx of buyers is simultaneously driving prices higher, and they’ll continue to do so for the foreseeable future.

Idaho Median Rent Prices

Not unlike every other market across the country, rental prices in Idaho share a direct correlation with home values. For the better part of a decade, in fact, Idaho’s rental price increases have come in the face of rising home values. Since the last quarter of 2010, all the way through to today, rental prices in Idaho have increased 96.4%. As a result, the median rent price in Idaho is now somewhere in the neighborhood of $1,450, according to Zillow. With a price-to-rent ratio of 15.56, most Idaho residents will find renting more affordable than buying.

For a better frame of reference, the median rent price across the entire country is about $1,700, or a mere $250 more than Idaho. Despite U.S. rental prices being slightly higher, however, it’s Idaho rental prices that have increased at a significantly faster rate in the last decade. From December 2010 to today, when Idaho rents increased 96.4%, median rents across the United States increased a much more modest 29.2%.

Idaho Foreclosure Trends & Statistics

According to RealtyTrac, a nationally recognized real estate information company that specializes in distressed properties, Idaho has a very low distribution of distressed properties. With approximately one out of every 6,615 homes in some stage of distress (default, auction or bank owned), Idaho boasts a foreclosure rate of 1.5%, which is considerably lower than the national average. With a 3.9% foreclosure rate, the national average is nearly three times the rate exhibited in Idaho. The significantly lower foreclosure rate may be attributed to the state of Idaho’s economy. With a low unemployment rate, growing wages and more employment opportunities, Idaho homeowners have found it easier to get out from underwater mortgage positions than in years past.

“In September, the number of properties that received a foreclosure filing in ID was 30% lower than the previous month and 29% higher than the same time last year,” according to RealtyTrac. The county most responsible for the year-over-year increase may be Lincoln, which has the highest distribution in the entire state. With one out of every 1,994 homes in some stage of foreclosure, Lincoln has a foreclosure rate of 5.0%. Other neighborhoods with high distributions of foreclosures include:

• Washington (1 in every 2,311)

• Gooding (1 in every 3,085)

• Kootenai (1 in every 3,088)

• Payette (1 in every 3,088)

While Idaho foreclosures have increased in the last year, it’s important to note that their distribution is still relatively low.

Tax Lien Investing

• Tax Lien or Deed: Tax Deed State

• Interest Rate: N/A

• Redemption Period: 3 Years (Then county takes property and sells it at auction.)

Idaho Online Tax Deed Auction

Below you will find a list of online auctions in the state of Idaho. Click on the link of the county you would like to research:

• Boise, ID - July

Idaho Real Estate Investing

Real estate investing in Idaho, much like everywhere else, is dependent on securing assets with attractive profit margins. The more an investor is able to secure a deal under market value, the more likely they will be to realize a worthwhile payday. Therefore, Idaho real estate investors should pay special considerations to the state’s distressed inventory. If for nothing else, distressed assets award savvy investors with higher profit margins than their traditional counterparts.

In order to truly tip the scales in their favor, however, Idaho real estate investors should focus their attention on one type of distressed asset: auction homes. As it turns out, auction homes make up the largest distribution of Idaho’s distressed property inventory. Representing 53.8% of the entire state’s distressed inventory, auction homes are far and away the most abundant source of distressed assets. That means that more than half of Idaho’s distressed inventory is expected to be sold at auction at some point in the near future. Perhaps even more importantly, however, is the ease in which investors may attend said auctions. Since most of Idaho's distressed properties are going to be auctioned off to the highest bidders, investors will increase their odds of landing a deal with good profit margins by attending local auctions.

Of course, knowing where to find real estate deals in Idaho is only part of the equation. Once investors secure deals, they need to know what to do with them, which begs the question: Which exit strategies are working the best for Idaho real estate investors?

While the Idaho real estate market appears more than capable of supporting the three most popular exit strategies (wholesaling, rehabbing and renting), one stands to offer more potential relative to current market conditions than the others: rehabbing. There is a significant need for rental properties across the entire state, but affordability lends itself to buyers. The fact remains: Not only are more people inclined to buy in the Idaho real estate market, but they are also financially able and willing. As a result, rehabbers will find plenty of demand for their deals now, and in the future.

Idaho Housing Market Predictions

Predicting any housing market — even one as “predictable” as Idaho — is a fool’s errand. There isn’t a single investor who can predict what will happen in a given market without at least some inherent margin of error. Nonetheless, it has become good practice to try and anticipate the market. Investors with their finger on the pulse of their local real estate market will have an upper hand. So long as they realize nothing is ever guaranteed, making educated guesses as to what is most likely to happen can award savvy investors with a significant advantage over reactionary competitors.

If, however, you aren’t comfortable making some predictions of your own, here’s a small list of the events most likely to unfold in the Idaho real estate market over the next year:

• Demand will continue to drive prices higher: The Idaho real estate market continues to draw buyers from across the country. That said, there aren’t enough listings on the market, which creates an inordinate amount of demand. The same demand that facilitates activity will continue to drive up prices until more inventory is brought to the market. It’s reasonable to expect prices to increase as much as 6.9% over the course of the next 12 months.

• Several factors will continue to promote homeownership: Demand will continue to grow in the face of rising prices, as there are simply too many things working in favor of buyers. Historically low mortgage rates, in particular, will continue to push more buyers to act sooner rather than later; that, and the relative affordability witnessed across the state.

• Idaho will do its best to alleviate the inventory crisis: Idaho has fallen victim to a distinct inventory shortage, which is predominantly to blame for historically high prices. However, the state has already started to address the issue. Construction activity is growing and large-scale housing projects are in the works to increase housing inventory. That said, it will take some time until the projects are finished. As a result, prices will continue to rise until the assets are bought to market.

Summary

Few markets across the country can compete with the potential of the Idaho real estate market. Not only has real estate in Idaho outpaced national appreciation rates for the better part of a decade, it looks like it will continue to do so for at least another year. As the primary beneficiary of positive net migration, a vastly improved economy, affordable home prices, and positive housing market sentiment, the Idaho real estate market is strong, and getting stronger. With several large-scale building projects in the works, it appears as if the state will fix their inventory shortage sooner rather than later; when it does, things will only get better for everyone in the market.

Sources:

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https://www.census.gov/quickfacts/fact/table/ID/PST045218
https://www.bls.gov/regions/west/idaho.htm#eag
https://www.realtytrac.com/statsandtrends/foreclosuretrends/id/
https://www.realtytrac.com/statsandtrends/id/
https://www.realtytrac.com/statsandtrends/foreclosuretrends/
https://www.zillow.com/id/home-values/
https://www.zillow.com/home-values/
https://www.attomdata.com/news/market-trends/u-s-foreclosure-activity-down-24-percent-in-august-2019-14th-consecutive-month-over-month-decline/
https://www.attomdata.com/news/market-trends/flipping/q1-2019-home-flipping-report/