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As Boise home prices rise, relative affordability compared to elsewhere is dropping off

The rising prices mean buyers are now getting less bang for their buck when they move here.

BOISE, Idaho — Editor's Note: The video with this story about the number of housing units needed in Boise over the next decade.

As home prices in the Boise area shot up in the past year and a half, the market shifted away from one of its biggest draws — affordability.

The rising prices meant Boise’s relative affordability to outsiders dwindled. While still a high-demand market and a popular landing spot for migration from West Coast states, buyers are now getting less bang for their buck when they move here.

Julene Webb, Real Estate Consultant with Group One Sotheby’s International Realty, heard this sentiment from a recent client.

“Gosh, I thought my $700,000 would have bought me more than I'm seeing,” Webb recalled the client from California saying.

“Definitely today $700,000 buys you less than it did three years ago,” Webb said.

The median price of a home in Ada County in July was $540,000, according to the Intermountain Multiple Listing Service. That’s a 38.5% increase compared to July 2020 and a 122% increase from five years earlier in July 2016. From 2010 to 2020, Ada County added 102,602 people, according to the U.S. Census Bureau.

The influx of people contributed to the high demand and low supply of housing in the Treasure Valley. That drove prices up. Now those high prices are potentially nearing a tipping point, when Boise’s attractiveness as relatively more affordable than other western cities no longer exists.

Christina Ward, a Realtor with Keller Williams Realty Boise, has observed a similar trend as Webb.

“I'm starting to experience buyers saying, ‘I don't know if I'm going to move there anymore because what's the point? We're going to be away from the beach now and we have to pay the same prices,’” Ward said.

According to the National Association of Realtors, the median home price in the Boise-Nampa metro in the second quarter of this year was $469,100. In the Sacramento, California, metro, it was $505,000. In the Portland, Oregon, metro, it was $545,600. In the Riverside, California, metro, it was $510,000.

Migration to Boise has been common for a while. Ward gave the example of how she moved from California 20 years ago and bought a house in Boise’s North End for $125,000, significantly less than it would likely sell for today.

With prices in Ada County now frequently more than half a million dollars, “that's no longer affordable,” Ward said. “(Compared to) the Bay Area, heck yeah, that's a great price. Seattle, great prices still. But Sacramento or inland San Diego or our typical migration pattern cities,” it’s not.

Based on National Association of Realtors data, the median second quarter home price in San Jose, California, ($1,699,000), San Francisco ($1,385,000) and Anaheim, California, ($1,109,500) remains much higher than in Boise.

Compared to other western cities such as Denver ($618,600), Salt Lake City ($485,100) and Phoenix ($408,700), Boise doesn’t offer much more affordability.

Webb gave the example of how six months ago, a young couple might’ve been looking for a four-bedroom home. Because prices have kept rising since then, a three-bedroom home now might be a better option to match their budget.

“At some point, though, prices can't increase over 30% per year,” Webb said. “That can't continue for 10 years. People just get priced out of the market. We're feeling pretty positive about the next couple years but I don't expect prices to increase at the same rate they've increased this last year.”

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