Thanks to Affordable Housing, Mortgage Applicants Flock to Idaho
While the nationwide housing slump has been well-documented and overall homes sales on the decline, the Idaho housing market isn’t facing anywhere near crises as other areas.
In fact, new residents are flocking to the region anchored by the capital city of Boise, lured in part by the modern-day equivalent of the gold that brought settlers in the 1800s - affordable housing.
In the southwestern corner of Idaho - near the borders of Oregon and Nevada - the Boise metropolitan area’s population jumped about 16% last year from its July 2000 level, one of the nation’s largest metro-area percentage gains, according to the U.S. Census Bureau.
Boise’s mountain vistas and fast-growing, diversified economy are draws, reports the Real Estate Journal, but population growth also has been fed by its proximity to pricey West Coast markets. The third-quarter median home price in Ada County, including Boise, was $242,500.
That compares with second-quarter levels of $283,400 in the Portland, Oregon housing market and $751,900 in the San Francisco housing market according to the Intermountain Multiple Listing Service Inc. and the National Association of Realtors.
“Boise’s one of the nation’s top-10 undiscovered markets that’s now being discovered,” says Kenneth T. Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley, who compares it with other smaller hip and affordable cities such as Madison, Wisconsin.
The construction of houses and places to shop and work has fueled an expanding commercial real-estate market and driven a robust recovery in the local economy following the tech bust.
Employment in October rose 4.9% from the year-earlier month, more than triple the national rate of 1.4%, according to the Bureau of Labor Statistics. This means residents in the area can afford monthly home mortage payments.
Both the suburbs and downtown Boise have attracted development.
Over the summer tenants began moving into the 11-story Banner Bank Building, billed as downtown Boise’s first new high-end office building since 1999. In addition, last year the city gained a $60 million mixed-use project called BoDo, a name derived from Boise downtown and inspired in part by Denver’s revitalized LoDo, or lower downtown, neighborhood.
At the same time, some signs of a cooling housing market suggest Idaho’s construction-dependent economy could see a slowdown in job growth, says Shayna Olesiuk, an economist with the Federal Deposit Insurance Corp.’s San Francisco regional office.
If that doesn’t happen, others say Boise will need to take steps to manage growing traffic and potential pollution problems that threaten the small-town charm that attracted many residents and businesses to the region.
Of course, this kind of surge in residents and home loan applicants would be welcome in almost any other city in the country.