The continued appearance of Boise on "Top 10 Places to Live" lists has sent the local real estate market into a tailspin. Sellers haven't seen conditions this favorable in a long while, but buyers face a limited housing stock. According to the most recent RE/MAX housing report, the monthly supply of homes in Boise dropped about 18 percent between February and January, and has plummeted a whopping 33 percent in the past year.
"There's a lot of demand out there for housing, particularly on the starter end," said Ben Ayers, senior economist at Nationwide Insurance. "If Boise continues to follow the trends that we're seeing across the rest of the country, there's not enough building to keep up with demand."
According to the Health of Housing Market Report put out by Nationwide, the average Boise home remained on the market for about 37 days in 2017, a span roughly a month shorter than the 67-day national average.
Meanwhile, the RE/MAX housing report indicates the actual number of homes on the market is continuing to decline. Boise RE/MAX broker Darrin Jaszkowiak said that's mostly due to a high turnover in transactions.
"A lot of news articles that you're seeing say there's no inventory out there," said Jaszkowiak. "But that's a little bit of [a] misnomer, because there are actually a lot of transactions happening. The overall inventory just isn't staying put. Homes come on the market and they come off the market pretty rapidly. So, it's important for homebuyers to make informed, but quick, decisions."
The median price of homes for sale in Boise has also been steadily increasing over the past year, and is now up 12.75 percent to just over $250,000, according to RE/MAX. In terms of housing affordability, Ayers said he and his colleagues look at the growth of housing prices versus the growth of personal income. He added that the influx of new residents is also impacting costs.
"You're seeing strong population and job growth, which feeds more and more demand for housing," said Ayers. "A lot of those jobs are in higher-paying sectors like financial services and health care. With higher wages, more people are able to afford more homes, and that's certainly having an impact on the market and the price structure."
Many projects were put on hold during the recession, stalling the growth of home construction in Boise. Jaszkowiak said the housing inventory remained stagnant during that time.
"We had a deep recession, so we had a lot of gains to make up, which have largely been done," said Jaszkowiak. "So, even though our growth has been robust, a lot of that is part of that recovery. We still have fairly good affordability for our area, compared to the median household income. Plus, we're seeing a lot of greater diversity in neighborhoods, leading to a high quality of life."
While there is concern for a shortage in housing and affordability, Ayers said there's hope.
"Nationally we're very optimistic [about] the the trends in housing," he said. "We're a little concerned about where house price growth is going, especially in markets like Boise, and what that's doing to affordability, but generally we still see good trends on the demand side, which should still keep housing moving."