Why Idaho Is One Of The Top Housing Markets In The US
In the previous decade, it was all about moving to the big coastal cities – New York, Los Angeles, San Francisco. While there’s no doubt those places are still wildly popular, there’s also a new trend afoot: urbanites saying goodbye to big city life in favor of less crowded, more affordable inland cities and towns in the Midwest and West regions of the U.S.
Nowhere is this trend more evident than in Idaho, where the housing market is booming and out-of-staters are pouring in to take advantage of the state’s relatively affordable cost of living and Boise’s big-city amenities that come without the big-city traffic and crowding.
We dug through the data to get an idea of what, exactly, is happening in Idaho and why it’s become such a hot spot for incoming home buyers.
Why Everyone Seems To Be Migrating To Idaho
Idaho is one of the fastest-growing states in the U.S. and has seen a huge number of new residents migrating from other states around the country.
According to state-to-state migration data from the U.S. Census Bureau, nearly 80,000 people moved to Idaho in 2018 alone.
The state also experienced the largest percentage of population growth from 2018 – 2019 compared to other states, with a 2.1% increase in population. The next highest states for population growth, Nevada, Arizona and Utah, each saw a 1.7% increase.
So, why are people clamoring to become Idahoans?
Moving company United Van Lines conducts an annual study tracking the amount of inbound and outbound moves in each state and why customers are moving. According to their most recent study, Idaho was the top state for inbound moves.
The most common reason for moving to Idaho among those who were surveyed was retirement, followed by job, family and lifestyle.
If retirees are flocking to Idaho, it could be for the same reason that many others are moving here: affordability.
Historically, Idaho has enjoyed a relatively low cost of living, especially compared to some of its neighbor states. However, if recent trends keep up, this may not remain the case for much longer.
Where Are These Newcomers Coming From?
When we look at who’s moving to Idaho, it makes sense that an affordable cost of living is top of mind.
Of the nearly 80,000 people who moved to Idaho in 2018, the largest portion of them, 21,018, moved here from California. Another significant chunk, 14,955, came from Washington state.
It’s no coincidence that both of these states are home to some of the most expensive places to live in the country, both in terms of home prices and the overall cost of living.
For those looking to make their dollars stretch further and get a shot at homeownership (something that is completely out of reach for most people in areas such as San Francisco or Seattle), nearby Idaho, with its mild climate and ample outdoor activity offerings, can give their budgets some much-needed reprieve without causing too much of a lifestyle shock.
Boise: Idaho’s Crown Jewel
It’s no wonder that California expats are falling in love with Idaho, particularly the city of Boise. Outdoorsy types and avid hikers who enjoy California’s natural and scenic offerings will find themselves with similar recreation options in Boise.
Boise has many of the same great amenities you’d find in larger cities, from thriving music, theater and art scenes to the popular Boise State Broncos games, as well as an impressive array of unique and delicious culinary options.
Boise has made several of the U.S. News & World Report’s “best of” lists, ranking 17th in “Best Places to Live,” 4th in “Safest Places to Live” and 20th in “Best Places to Live for Quality of Life.”
Idaho’s Real Estate Market Has Experienced Serious Growth
In the past several years, Idaho’s home values have seen a huge amount of growth, well above the national average.
According to the Freddie Mac House Price Index (FMHPI), three Idaho cities made the list of the top five cities in the country for year-over-year HPI growth.
Idaho Falls took the number one spot with a year-over-year increase of 13.39%. Boise was third in the nation at 11.53%. In fifth place, Coeur d’Alene saw a 10.21% increase.
Strong New Housing Growth
The city of Boise had the 3rd highest amount of new private housing permits issued per capita in July 2020, according to data from the Federal Reserve Bank of St. Louis.
The number of building permits issued in a given area is often used as an indicator of how strong the housing market is in that area. The high number of per capita building permits issued in Boise indicates a strong demand for new construction.
Boise’s Hot Market
Are Idaho’s most popular cities buyer’s markets or seller’s markets? If you’re looking to move to an area like Boise, be prepared to move fast and bid high. Due to swelling demand and low inventory, competition among buyers is fierce.
This competition has been driving up home prices, which is great news if you’re a seller in Boise, but isn’t exactly music to the ears of Idahoan buyers both old and new, whose incomes haven’t kept up with skyrocketing home prices.
Will The Affordability Last?
With the influx of new residents and increasing amount of housing market competition, Idaho’s growth is a double-edged sword.
Using data from both the FMHPI and the Census, we can compare how home prices and incomes have increased over the past several years and see whether incomes are keeping up with rapidly rising home prices.
Between 2015 – 2019, incomes in the U.S. rose about 22%. In Idaho, incomes rose nearly 28% in that same period.
However, even though Idaho is experiencing slightly higher-than-average income growth, income still hasn’t kept pace with the amount of growth house prices have seen in there. From 2015 – 2019, the FMHPI shows a 24% increase in the house price index for the U.S. In Idaho, it was a whopping 52% – more than double the national average.
So, while the Boise real estate market has seen some tremendous growth in the past several years, many households haven’t been able to participate in it.
The Bottom Line
For buyers looking to make the move to Idaho and jump into Boise’s red-hot housing market, acting quickly is key.
While Idaho housing still appears to be a strong investment, the window of opportunity, particularly in the state’s more popular urban areas, may be narrowing – especially as home prices become less affordable for larger portions of the population.
Learn more about home buying on the Rocket Homes℠ blog.