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Residential Round-Up: Making Sense of Our Market

As news articles revolving around our housing market in the Treasure Valley seem to have died down a bit, so has the pressure on buyers. For the first 9 months of the year, we saw year over year increases each month of 24-48% with the median home price of $534,950 in Ada County and $422,000 in Canyon County. Although prices are continuing to increase, we're also seeing a welcome increase in inventory. As of September, we've seen six consecutive months of increasing inventory. As sellers saw short days on market and high sales prices, it gave them extra encouragement to take advantage of the market and list. This is a benefit to Boise buyers as more available homes leads to less competition resulting in only about 33% of homes on the market selling for over list, the lowest percentage since June of 2020.

 

We are still far from a balanced market where we have 4-6 months of inventory (we're at about 1.5 months currently) which continues to result in opportunities for sellers.

 

As a seller, it is important to talk to your trusted Realtor about the market conditions and current comps. Due to the slower pace, we're not seeing the month over month price increases we were seeing at the beginning of the year. Some sellers may still have that in their mind and a large reason we're seeing homes sit on the market right now is due to an over-inflated list price. Accurately pricing your home the first time around leads to a higher contract price overall. It is also important your home shows well and is in good condition. With more inventory, buyers may have more options.

 

Although overall we're seeing an increase in the number of homes available in the Boise area, some areas that are in high demand are still going to see multiple offers and go pending quickly. This can still lead to some challenges for buyers looking in those neighborhoods meaning they'll need to be ready to act quickly and there may not be a lot of negotiation room on price. Ensuring your agent is communicating with the listing agent and finding out what's important to the seller results in either submitting a strong offer or may determine that it's not going to fall into your budget, timing or other parameters. It's important to have a clear plan with your agent when going into a potential multiple offer situation. Thankfully with incredibly low interest rates and potentially some seasonality as the holidays approach, it's still a great time for buyers. What we are seeing in the industry (and also through news avenues) is continuing growth and in-migration which will continue to add to the increase in our real estate market and homeowner's equity.

 

If there are any questions you have regarding the market, buying or selling, or have a friend or family member that does, we'd love to help!

 

Paige Brown, Associate Broker

Swope Investment Properties

 

Boise Multi-family Market is Holding Strong, Despite Residential Cooldown
After stay-at-home orders across the nation in Spring of 2020, a surge of buyers, mostly from the West Coast, chose Idaho as the location of their new home.  They figured that if they were going to work from home, why not upgrade their home and quality of life and move to Idaho. This surge of migration caused Boise property values to ascend at a pace we have never seen.  COVID is still playing a factor in the Boise market.  As businesses were allowed to re-opened along the West Coast, residential real estate in Boise started to slow.   Now that we are in the fall with winter and the holiday season soon approaching, Boise is seeing a traditional market cool down. 
 
However, we have yet to see significant signs of a market correction on multi-family (four plexes and apartments).  Duplexes and Tri-plexes in our area tend to follow the residential market trends more closely.  As you can see in the below graphs, Ada County fourplexes are leveling out, but holding.  In the four larger apartment deals that I have been involved with this year, the confidence and value of investment properties within the Treasure Valley is still very strong.
 
 
If you would like to take advantage of the opportunity to cash out, or accumulate investment real estate in Boise, Idaho, we're here to help.  Feel free to reach out to your Boise Investment Properties Team.
 
 
Stacy McBain, Associate Broker with Swope Investment Properties
 
Tony A Drost, Associate Broker with Swope Investment Properties
 
 
Boise Residential Real Estate Update

Recently, Boise Regional Realtors hosted their annual housing summit. Real estate and the growth of the Treasure Valley is something that is at the tip of everyone's tongue, locals and visitors alike. As Realtors, we are having conversations every day about the state of the market and where things are at.

 

When jumping into the Boise housing market, the first thing discussed was how prices are driven by low inventory and an increase in purchasing power for buyers. With the pandemic, many have also decided to make moves out of bigger, busier environments and head to a place where they are able to afford more and have some space to be able to live and still feel safe. The jump in the market is not, I repeat, is not due to lending practices as was the problem a decade ago. Buyers are coming in with large down payments and 23% of all transactions wihtin thee Boise area were cash which has contributed to the increase in homeowner's equity and reduces some of the risk from the market.

 

Another factor affecting Boise housing prices is the lack of high density units. In 2019, the housing inventory only consisted of 18.2% being 2 or more units within the structure. This takes into consideration condos, townhomes, apartments and other multi-family properties. Through June 2021, only 15% of all permits were for 2+ unit structures. Having more multi-family properties is a great asset to a growing community like Boise, as it allows for higher density per lot, it generally means more affordable housing options and also spreads out construction costs.

 

Overall, homeowners gained an average of $71,000 year-over-year through Q1 of 2021 which is the second year in a row Idaho has had the highest increase of any state. Even with housing prices increasing an average of 32% year over year in Ada County (Boise, Eagle, Kuna, Meridian, Star, Garden City), its continuing to show as a strong market and both a great time to buy or sell. Whether you're looking at making a move with your personal home or investment properties, reach out so we can discuss your goals and come up with a plan!

 

Paige Brown, Associate Broker, Swope Investment Properties

Boise Investment Properties Team Blog

The Long and Short of Renting

Short-term renting is a fully-furnished, all-inclusive renting alternative that has been growing in popularity in Boise and beyond. There are pros, cons and a couple major decisions to consider, such as “how short,” who’s managing the home and whether AirBnB and the likes will be a primary source of guests.

 

The number one thing to note – the higher rent does not necessarily mean higher profits.

 

Short-term renting starts with a fully-furnished rental, which generally are a single-family home, condo, townhome, or even one or two units within a multi-family property. From there, property owners include all utilities, supplies, internet, and landscape. The property management also involves a lot more moving parts than a typical Boise rental. Lease terms may be as short as one night, or could last multiple months.

 

It’s true that the income is higher, but so are the expenses. When you weigh all that out, there are two ways to come out ahead when providing furnished, compared to unfurnished Boise rentals. Doing your own property management is one way to make a higher net, as short-term rental management costs 20-35%. This often helps put an owner’s net proceeds pretty close to where they otherwise might fall in a long-term/unfurnished rental, which typically costs 10% or less to manage. The other main benefit could be the ability to use your property, in part or in full, depending on the setup (e.g. when family comes to town, or perhaps you keep access to the garage).

 

For the most part, the short-term rental clientele is respectful, but there are bad apples in every bunch. In the review- based system of AirBnB, there’s also more accountability and documentation to help encourage thoughtful behavior. For those who slip through the cracks, at least their stay is brief, unlike bad long-term tenants’ stays.

 

There’s also a rental housing crisis in Boise that short-term renting may not be helping. This depends on who you ask. Some may view it as taking away more affordable rental units. Others may see it as adding units or adding transitional housing options for people who need time to achieve their next step of buying or renting. New grandparents, those remodeling or building homes, tourists, traveling workers, and new arrivals to Boise are among the many people who utilize short-term rental housing.

 

Stacy McBain

Associate Broker, Swope Investment Properties
Boise Investment Properties Team

Boise and Austin Share California Migration

Great Article from  with Austonia compares Austin to Boise, Idaho and the many similarities.

https://austonia.com/austin-vs-boise

 

What has booming population growth, a bustling outdoorsy scene and new trendy hangouts at every corner?

Turns out that's more of a trick question than many Austinites might think.

Month-by-month, Austin seems to be at the helm of Texas' California migration and has seen itself cast as the United States' next Silicon Valley. But despite less attention, Boise, Idaho has much of the same talk—and they're growing at an even faster rate.

 

With a similar outdoor and music scene, competing population statistics and more odd coincidences—their original newspaper is even called the Idaho Statesman—the two cities share more similarities than they might at face value.

 

Here's a look at how both cities are welcoming their unprecedented growth while grappling with not-so-unique growing pains.

 

"Don't California My-"

Idaho may still be thought of as a quiet farming state by faraway onlookers, but the state was the second-fastest growing in the nation with 17.3% growth in the past decade, according to the 2020 Census. The growth has mostly been fueled by migration to Boise from priced-out West Coasters and city dwellers looking for a slightly quieter life. Texas was just behind as the third-fastest growing state with 15.91% growth.

 

The Boise City metro was ranked the fastest-growing in the nation by Forbes in 2018 and has hardly changed pace. Austin and Boise often share top spots on national lists; according to Business Insider, the Austin-Round Rock-Georgetown, TX metro grew 33% in the past decade with a population of 2,283,371, while the Boise metro grew 24% to 764,718 residents.

 

Californians accounted for 10,073 new moves to the Boise metro in 2020, up 27% from the year before. Meanwhile, move-ins to the Lone Star State literally changed national politics as California lost a Congressional seat and Texas earned two in 2021, with many of those making their way to Austin. Each state even sports popular "Don't California My Texas" and "Don't California My Idaho" slogans for disgruntled natives.

 

They both even had one errant political candidate who suggested a wild idea to keep the Californians out. In 2020, a Boise mayoral candidate suggested building a wall to keep out Californians, according to a City Journal article. Sound familiar? In a similar vein, an Austin City Council candidate suggested the city put up a dome around the city to do the same in 2018.

 

Music, Greenbelts and river tubing

With its Barton Creek Greenbelt, picturesque Hill Country views and river tubing, Austin may think it has the Midwest city beat in the outdoors department. But Boise has eerily similar attractions; the Boise River Greenbelt, for instance, provides over 25 miles of hiking, biking and swimming through the city, while those wanting to take a signature Texas river tubing trip can take to the Boise River. The region swaps Hill Country attractions for Bogus Basin, a mountain resort that serves as a skiing hub in winter and hiking oasis come summer.

 

The Live Music Capital can even be compared to Treasure Valley's music scene; while not as reputable as the world-renowned Austin City Limits Festival, the city's annual Treefort Music Fest is growing quickly since its founding in 2012 and has been called "the west's best SXSW alternative."

 

Pushing outward

 

Each metro is pushing outward as well. Meridian, Idaho, the state's third-largest city that sits just minutes west of Boise, was the sixth-fastest growing large city in the nation by percent change from 2010-19, according to the U.S. Census Bureau. While Meridian grew by 48.3% in the past decade, Northwest Austin suburb Cedar Park was just behind with 44.2% growth in the same time span, while Round Rock was the 13th fastest-growing with 33% growth overall.

 

 

Tech influx

 

Austin, sometimes known as "Silicon Hills," has experienced a wealth of new tech HQs as tech giants and startups flock to the hub. With Tesla and Oracle making waves in the Texas Capitol, it might be tough for a smaller city like Boise to compete. But a few firms, including payroll provider Paylocity, have made the move to Boise, with significant investments from fintech company Clearwater Analytics as well.

 

 

Growing pains

 

But everything isn't always peachy in these trendy new hotspots.

 

Affordability crises and infrastructure issues have racked both Boise and Austin. A 2019 report by the state of Idaho predicted that the region would add more than 100,000 residents by 2025, and the result of straining growth has been rapidly increasing rent.

 

Forbes article ranked the city as the No. 1 housing market to watch in 2021, but current residents are feeling its effects. According to Apartment List, the city's rent increased more than any other city from March 2020-21 with a 39% rent jump. On Tuesday, the city said it would need 27,000 more housing units in the next 10 years to solve its housing crisis. The average one-bedroom rental in Boise costs about $1,500 monthly, $700 more than what the average Boise renter can afford.

 

Meanwhile, a new Zillow report says Austin could become the most expensive city outside of California as soon as the end of 2021. Austin's average one-bedroom rent is now just behind Boise at $1,442 a month, $367 more than what the average Austinite can comfortably afford. The median home price in the city of Austin hit an all-time high of $566,500 in May, rising more than $142,450 year-over-year, according to the Austin Board of Realtors.

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