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A native Idahoan (I bet half you don't even know Richfield exists) living in Austin Tx here. I remember seeing prices explode in the late 90s in Boise. It seems like another explosion is taking place where I see say a 1900 sqft home asking near 300k in say Columbia Village/nearish Micron.
Are the salaries really supporting this or is it some kind of Silicon Valley where even the highly paid engineers have to eat Ramon noodles to afford to live near work?
Not really a rant, but what's going on this last year that's causing prices to explode again?
Just guessing: Boise is very cheap relative to the rest of the Western states. I hear from a lot of people from California and Seattle who could never afford to buy a house in that area and are moving to Boise because real estate is so cheap, compared to what they know. (coupled with the fact that Boise is an attractive place to live. Detroit is cheap, too, but nobody wants to live there)
Lots of people moving in and not enough housing stock for everybody drives the price up.
As far as I can see, salaries are not supporting house prices, but people are bringing money in with them.
Just guessing: Boise is very cheap relative to the rest of the Western states. I hear from a lot of people from California and Seattle who could never afford to buy a house in that area and are moving to Boise because real estate is so cheap, compared to what they know. (coupled with the fact that Boise is an attractive place to live. Detroit is cheap, too, but nobody wants to live there)
Lots of people moving in and not enough housing stock for everybody drives the price up.
As far as I can see, salaries are not supporting house prices, but people are bringing money in with them.
Salaries don't support the houses there either for the most part. If you bought a million dollar home in CA, you'd need $200k down (which would take a lifetime to save up for), and then still have a payment of around $5k per month. Even if that is half of your salary, you'd still have to make more than $160k per year, and that would leave you with half of your salary going to your mortgage and the other half to support everything else.
When we sold in CA, the people that bought our home were like us. They were a little bit older, had made some equity over their years in the housing market, and had bought up a number of times. They didn't have one of these fantasy $200k jobs that people seem to think grow on trees in California for people coming out of college. People in CA are making $100k and living four to five at a time in rental rooms in a house in certain places.
Idaho isn't unique in that respect. The difference here is that if you want to, you can guy a cheaper home (mid-$100's) and start building your equity, get the tax write off, and get out of apartment rentals. In CA, those same starter homes start at $500k in bad areas, and go up as you get into areas where you won't get shot walking the dog at night.
It's expensive and hard everywhere. The same people that are driving up the prices and can afford to buy here can also afford to buy there. Yes, it might be a nicer home, but once you take the pay cut that I and most others do, it evens out pretty much. It's the other benefits that I moved here for, like a slower pace of life, safer, less crowded, etc.
It's the people moving in from out of state that is driving the housing market. I'm a native that's lived all over the US, and most recently mid-Atlantic area. What you save on by moving here beyond cost of housing are other things like taxes (ex. Went from paying $20K in property tax to $7K, then get the homeowners discount to 3.5K), car insurance went from $3200 per year for two cars to $750. (Same cars, same mileage), and electricity - went from $800 a month electric to $120.00.
New to Boise, only been living here two months, but all I see is house farms, fields and fields of new housing. On all sides of Boise and within the city limits, massive housing developments. I got to wonder too, who is living there and how are they paying their bills? Can there really be that many jobs here? And what happens if the Treasure Valley economy crashes? What if there is a huge tech crash impacting HP, Micron, etc? Who is going to live in these massive housing developments?
We bought an inexpensive 3/2 in a nice area for 187K. (Smallest house in the development). But in two months Zillow/Realtor.com etc are saying it is worth $213 to $215K. In two months?
New to Boise, only been living here two months, but all I see is house farms, fields and fields of new housing. On all sides of Boise and within the city limits, massive housing developments. I got to wonder too, who is living there and how are they paying their bills? Can there really be that many jobs here? And what happens if the Treasure Valley economy crashes? What if there is a huge tech crash impacting HP, Micron, etc? Who is going to live in these massive housing developments?
We bought an inexpensive 3/2 in a nice area for 187K. (Smallest house in the development). But in two months Zillow/Realtor.com etc are saying it is worth $213 to $215K. In two months?
DH
Your observations are spot on.
Boise, like many areas, is experiencing a housing mania - although it seems that prices may have recently stagnated. It seems there is a standoff between high asking prices and buyers not interested in overpaying - there is a limit to how much people are willing to overpay to buy a house. Along with that, is the massive overbuilding and speculation that will not fare well when (not if) the next crash comes. The mentality that we must "buy now or be priced out forever" feeds this. The mentality that "real estate never goes down" feeds this. The real estate cartel feeds this by peddling fiction, ignoring cycles, and leveraging fear into desperation. It isn't "different this time".
Earnings in this market do not support these housing prices, and all of this is going to end badly - lots of folks will be upside down on their homes. While $300k seems "cheap" compared to insane CA prices, the earnings in this market do not support the prices. In other words, current market prices are unsustainable. If you are making typical Idaho wages, you probably cannot afford this market.
Does anyone really think 13% appreciation in two months is normal and sustainable?
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