2021 Boise Real Estate Market Investing Forecast

Boise, Idaho, is booming. The city, which has one of the highest appreciation rates in the country, is quickly becoming one of the hottest markets in the country. With a stable economy, abundant job opportunities, and lower property prices than many of its neighbors, Boise is becoming a popular destination for residents and investors fleeing coastal cities. Take a closer look at the local Boise market to better understand the challenges and opportunities real estate investors face in 2021.

What is it that makes Boise so special?

Boise, Idaho, known as the “City of Trees”, is part of the Treasure Valley region in southwest Idaho and has a population of nearly 800,000. It’s the second fastest growing subway in the country with an immigration rate of 3.24% in 2020. Although Boise is a big city with a rapidly growing population, Boise still has a small town feel with big city amenities including hundreds of great restaurants and bars as well as a diverse art and cultural scene. The area is a mecca for outdoor enthusiasts with year-round activities such as skiing, golf, hiking, camping, and fishing.

Boise is home to a number of major employers and Fortune 500 companies that have brought a younger and more educated workforce to the area, around 40% of the population aged 25 to 54. Idaho is ranked # 4 of all 50 states for real estate tax rates with a range of tax incentives for business owners. Home prices were just below the national average in terms of affordability, making Boise an attractive, safe, and beautiful place to work and live.

Market situation

Boise’s inland location is currently one of the biggest draws for residents and investors. Now that homebuyers’ preferences have changed as a result of the pandemic, people want more space, more air, and more land nearby when they work and live. Boise’s lower home prices are a relief when compared to properties in nearby California, Washington, or Oregon. In connection with the higher quality of life, real estate prices are rising. Here are some of the notable trends in the Boise market for 2021.

1. Real estate prices will continue to rise

Low interest rates and a lack of housing drove house prices soaring over the past year. Boise, which is also experiencing heavy immigration, is facing even greater home pressure, causing median home prices to rise 22.7% year over year. This makes it one of the fastest growing markets and there are no signs of slowing down. This is both a good and a difficult position for investors. Those who own real estate here can see a dramatic increase in value in a short period of time, but those who want to invest here face rising prices and fierce competition, making it difficult to find investment opportunities. The good news is that values ​​will hold as the demand for the market appears to be strong.

2. Rental demand will drive prices up

Although rents are still well below the national average, they are rising rapidly as they have increased by 10.3% year-on-year. In March 2021, rental prices rose 5.2% in just one month, according to a study by ApartmentList.com. In a recent study, Boise was named as the hottest rental market in the country right now. It seems that there has been a pent-up demand for rental units as tenants stayed at home during the pandemic, but since vaccinations are widespread, tenants are looking for a new home and prices are rising as a result. Landlords currently have great potential in this market, but low inventory makes it difficult to find and get hold of a lease.

3. Immigration will remain strong

The hot rental and real estate market in Boise is being driven by certain economic factors such as low interest rates, lack of inventory and migration patterns related to COVID-19. However, the long-term demand outside of these short-term trends is there. Good quality job opportunities and better quality of life mean immigration trends are likely to continue here, which in turn will continue to drive both rental prices and property values ​​higher.

Boise housing demand indicators

Charts courtesy of Housing Tides, an EnergyLogic company.

Let’s take a closer look at the residential and economic indicators, which provide further insight into the notable trends for the Boise region.

Unemployment in Boise is low and is currently 2% below the national average. This is a strong sentiment given general economic conditions around the world and speaks volumes about the job opportunities in the marketplace today. While unemployment rates rose in early 2020, rates are close to prepandemic levels and are recovering well.