All Forum Posts by: Summer Aston

Just a thought to consider on if the Boise market is really overpriced or not..

The Boise market feels overpriced to native Idahoans who are used to smaller incomes and have enjoyed a very “underpriced” market for many years before about 2016 when we saw our huge increases. But when you look at the housing market of the West overall, even at our current prices, Boise homes are still less than almost every city in the West. And rents are still higher than a mortgage would be on a home. 

I lived in the Sacramento area my teenage years. When I moved there, it was about the size that Boise is now. Homes prices were incredibly low there compared to The Bay Area and So Cal. It took some time to pick up steam, but in the early 2000s, when all the Bay Area people flooded in, home prices rose at the same rate they have been in Boise. Just as in Boise, a 2000 sf home that was once $200k rose quickly to about $450k. (Very general averages). That became the new normal, because it had been so undervalued compared to surrounding markets. During the peak of 2006, that same 2000 sf home went up to closer to $550k. After the crash, it didn’t drop to $200k, it dropped back to that “new normal”, that new price that had adjusted higher to be in line with surrounding markets. 

This reminds me very much of our Boise market. Native Idahoans can think all they want that somehow, our prices “should” drop more and “should” go back to where we were. Yes, there is a huge discrepancy of wages in Idaho and cost of housing. But just as Sacramento brought in people with the Bay Area wages, Idaho has brought in people with CA, OR, and WA wages...many of whom are keeping their out of state jobs and working from home or even commuting back and forth from time to time.

The answer we don’t know yet is, what is Boise’s new normal? Have we surpassed it? Is it still coming (after pandemic is over)? Will there be a drop from the pandemic? (Hasn’t been one yet and that is totally dependent on length of time no one can predict right now). 

One could argue that Boise is isolated and therefore not have the income base from outside cities or jobs to support the housing prices. The past few years have proven that idea incorrect as the number of people telecommuting rises. And I suspect that telecommuting May become an even greater factor in housing prices post Pandemic. 

If the market, as a national whole, sees price drops due to long term economic effects from the pandemic, then of course, Boise will see that too.  But to assume Boise will have price drops because people “think it should” and “think it is overdue” is to ignore the data and historical market context of the West. 

The fact is, Boise will continue to see our population increase rapidly (post pandemic) and home prices will respond based on the income people are bringing and what is going on with inventory here. 

I am not saying I’m right or wrong here, or this means you should or should not wait to buy. These are just my observations of the overall history of Western housing markets. I’ve lived in Boise 20 years and it is discouraging in some ways to see how rapid change effects a community on so many levels. But just because we don’t like it, or think it “shouldn’t” be this way doesn’t change the fact that it IS this way, that these housing prices and influx of population ARE our new normal. Of course things are slowing with the pandemic but we don’t know if/when that will equate with rise of inventory to justify price drops. Of course we can’t predict how long this will be and ensuing results. But long term, as real estate is long term investing, we need to realize that Boise has a new market normal that we just have to accept. 

Hello Hunter,

I hope you weathered the earthquake here in Boise alright yesterday. 

I’m a Realtor in Boise and so far, the responses have been correct. Our market is slowing for sure, but home prices are holding as inventory is so low. What determines if this is a “good time” for you to buy is all about your own motivations and if the numbers make sense for you. 

We have a couple scenarios here.

1. Is that, if this pandemic lasts in our country just a couple more months and the economy gains strength quickly, when it ends, prices on homes in our market could quickly rise as all the people waiting jump back in the market, and our inventory is so low. 

2. It lasts long enough we see it begin to impact people’s ability to pay mortgages, inventory could increase, prices could drop. 

No one knows. This is not like 2008, however. So even if home prices begin to drop, in general, don’t expect a rash of short sales because most homeowners in our Boise market have a huge amount of equity compared to 2008. Also, in 2008, we had about 4500 homes on the market in our area- now we have about 1000, and that number is dropping at this point in time. So as long as that inventory is so low, and interest rates remain low, even if demand is lower than it has been, the prices should hold- for now. Maybe that will change in a few weeks- again, these are unprecedented times that are difficult to predict. 

One thing on your side, as a Boise local, is that the majority of the out of state competition for SFH is on hold right now. So, if the numbers make sense to you, you need a home to live in, you can afford it no matter what the market does, it offsets what you might currently be spending on rent, or any other such factors, this could be an ideal time for you, personally, to buy. You will not be competing with as many out of state cash buyers.

Buyers, sellers, and investors are all over the board right now in Boise as to what they “should” do. Many are proceeding to take advantage of less competiton and low rates. Many are waiting. You have to make the choice based on what is best for you. One thing we know, rents are here to stay. So if you are currently renting, paying someone else’s mortgage while you “wait” another year or so is costing you possibly more than the prices “might” drop in Boise. 

If you do decide to buy, keep in mind that some things have changed in regards to qualifying for mortgages-so make sure you are working with a very knowledgeable local lender- new info is coming every day. Also, expect agents to show you virtual video tours of homes, if they are occupied, so that you only physically enter homes you are serious about. And in Idaho, we do have a new Covid 19 form that can help cover some risks created by the pandemic. Oh and expect a minimum of a 60 day close. And, this information is relevant today, possibly tomorrow, but could change again. So make sure you are in daily contact with your agent. 

Ultimately you’ve got to make your choice based on what works for you and not Based on fear or speculation. Do the numbers and lack of competition work for you right now? Then go for it. 

Good luck, Hunter! It’s an interesting time for sure, but life still moves forward. Feel free to message me if you want to discuss further. 

I’m a Realtor in the Boise area, and reading threads like these helps me to keep a pulse on where people’s thoughts and fear levels are. I would not “sing praises” that people should still buy- but cautiously suggest to make sure you are in daily contact with a knowledgeable realtor and lender to get the actual data. It is changing daily, but in the Boise market, is not yet indicating a repeat of 2008. As always, you have to make your decisions based on if the numbers and deal work for you. People will always need housing and rentals. Just ask yourself if you can still afford the property if the market dropped somewhat and can afford to weather it out. 
 
There are still so many people wanting to move to Idaho and are putting that on temporary hold. Our inventory is low anyways, and will get lower as sellers’ fears prevents them from listing. One scenario is that, if this shut down from the virus is short lived, there will be a flood of people wanting to move here, (and investors wanting to invest here) kind of like the virus is a dam holding everyone back for now. If that were to happen, the prices in Idaho could increase with low inventory and high buyer demand as soon as this ends. 

Of course, if the shut down lasts a few more months and people lose jobs, etc..that could all flip flop. Another likely scenario to think about is, if Trump lifts the   current restrictions by April 12, states can still decide individually what to do. I would expect some states to keep their restrictions going longer and others, such as Idaho, to lift restrictions if the virus numbers are low. So possibly some markets like ours will get back to work and others will still be on hold. (Which will effect us too).

The bottom line is, no one knows. Use current data from actual lender and from MLS resources. Don't make choices from fear but from what your data and personal situation are. I had someone contact me saying that he was living in Ca and kept "hearing" that high end listings in Boise area are getting pulled off the market in huge numbers. (He is not an investor nor an agent). I looked at the numbers and found that only 3 had been cancelled out of 34 listed over $1 mil (for the city of Eagle). And 14 were pending. So did some people cancel? Sure. In huge numbers? Nope. Will it change next week? Possibly? Depends on seller's motivations, personal situations, virus numbers. But In the average market range in Boise area (around $360k), we still- as of March 25- have some homes and investment properties getting offers on day one and multiples sometimes.

Everyone is coming from a different viewpoint, fear level, financial situation, and motivation right now. Waiting to purchase an investment prop might be wise depending on the length of this shut down (can’t control) and your personal situation (can control). Waiting might be unwise due to the same factors. So...again, make decisions based on data and what’s best for you. The fact that the quad you wanted got multiples over asking shows that the market is still chugging along here in Idaho.   

Good luck out there! It’s going to be interesting!

@James Debenham

I am a Realtor with Silvercreek Realty Group. They are the largest brokerage in Idaho and are very low cost. As an investor, the best thing about them is the network of over 1400 Idaho agents- they network quite a bit so you can find office exclusives or other opportunities that you might not find elsewhere. They have many, many agents who have a license for the same reasons you do.

Good luck!

Hello! Glad to have you in Boise. Yes, brokers are always “hiring” here (you will be your own independent contractor). There is a huge variety of business models here between brokers. If you message me I’d be happy to discuss any questions you have!

Good luck with getting your license! 

Summer

Are you wanting info on wholesaling or how to fund or the market details of that area or....? 

I’m a real estate agent located in Boise who’s been watching the market for many years. It is indeed what you say... most investors last year were seasoned people who were moving their money out of a different market into this one to make their money work a little better for them. Those who already have real estate capital are able to invest here as a place to hold their $. 

The housing supply is actually about 6 weeks now and the inventory is very slightly up. What investors need to focus on is finding a way to provide affordable housing here. I am very concerned the entire “life is good for everyone” feel of Boise is shifting as the Gap between renters and buyers is widening. Two years ago, a two income family that totaled $50k a year could find a decent house to rent for $1000/mo or buy for $150k. Now those same families are struggling to find even a 2 bed apartment to rent as there are thousands of “luxury” apartments being built all over the area. 

I helped a family last year buy a $180k home in Caldwell, and they have their parents and adult sister with husband living with them because their family members could not find an affordable place to rent. This reminds me very much of what happened in the Sacramento market about 20 years ago. 

One town I have my eye on for investing is Emmett. They haven’t completed the highway yet, but when they complete highway 16, it will provide direct access from 84 to Emmett. 

Also, think about possible AirBnB opportunities in places like Star, Middleton, etc...as there are no hotels. With all these people moving here, their families need a place to stay when visiting, and they all complain about having to drive 20 min to get to a hotel. 

The take home I’m seeing is: Emmett-a town to keep your eye on, Airbnb’s in the smaller towns, and rentals that allow for multigenerational/multi family living.