Boise’s housing market is a moving target. Last fall, StateImpact reported on a market still in the doldrums. Earlier this spring, we started to hear about growing demand and new construction. Yesterday, we took a look at the tough competition for low-priced properties, as new homebuyers and investors scramble for good values.
The trickier questions to answer are why these changes have come to Boise so quickly, and how long the
turnaround can continue at this rate.
In April, Robert Lang of Brookings Mountain West explained it this way: homes in markets that were hit harder than most may actually have become undervalued, making those homes especially good deals.
He also stressed that the price improvement in Boise has to be kept in perspective. It is, after all, improvement from the point at which prices bottomed out. As Lang put it, “there’s light at the end of the tunnel, but we are in most places still in that tunnel, because we have yet to get ahead of where we were.”
This week, Eric Allen, a regional director of Metrostudy, answered a few more of those “why” questions. First on the list, “Why is Boise’s housing market faring comparatively well?” The answer? “It’s complicated.”
“It’s not just one thing,” Allen says. “We have in-migration and favorable housing prices.” Also, Boise has had pent-up demand. “There were lots of doubled-up households, people living in mom and dad’s basement,” Allen explains. “Those people are starting to come back into the market while prices are still low, and interest rates are low.”
Like Lang, Allen advocates for perspective. He points out that Boise’s housing market is still in the hole. “It was so dead for so long, and now all of a sudden we’re seeing this big increase,” he says. “It feels like everything is blowing up.” In truth, Allen says, the city remains at 50 percent of normal production and sales.
Take Ada County as an example.
The median new home price peaked at around $320,000 in 2007. After bottoming out at $175,000, the county’s median new home price stands at $226,000. So where will prices level out, and when? Will they rebound completely, to where they were in the run-up to the recession? Or will they find a lower resting place? As Lang observed of Boise’s price turnaround earlier this spring: “It’s a reason for optimism, because it’s a lot better than seeing declines. The question now is how sustainable that is.”