Homebuyers migrating inland from the West Coast have rapidly turned Boise City housing market into one of the least affordable in the U.S.
With droves of homebuyers moving inland, the Boise City, Idaho housing market has become exactly what people from expensive West Coast markets were hoping to leave behind.
Prior to 2021, the mid-sized metro had been experiencing years of slow and steady home price growth. But in the first 8 months of 2021 alone the median sale price in Boise City increased $100,000. Now at $499,000 -- up 37% year-over-year -- home prices are far outpacing income gains.
This rapid price growth is due largely to inland migration. According to Redfin, 72.9% of users searching for homes in Boise City are searching from elsewhere. Los Angeles (19.7%), Seattle (13.8%), and the San Francisco Bay area (13.2%) lead the way.
The picturesque mountain city makes an ideal getaway for remote coastal tech workers looking for more elbow room. But for those earning the local median income, housing affordability has gone down drain in the last six months.
After years of average affordability, Boise City has suddenly become one of the least affordable metro areas in the U.S.
The National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) measures the percentage of homes sold in an area that a family earning the local median income could afford. In the second quarter of 2021, just 21.1% of homes sold in the Boise City metro were affordable for households earning the area median income of $75,300.
Ranked 226 out of 236 metro areas, Boise City is now officially in the bottom ten for housing opportunity index. It is the only metro in the bottom 19 that isn’t located in California or Oregon, and one of two that wasn’t in the bottom 20 at this time last year.
Metro area HOI (% of homes affordable for median income) Q2 2021 national HOI rank Q2 2020 national HOI rank Boise City, ID21.1226203San Luis Obispo-Paso Robles-Arroyo Grande, CA21.1227224Oxnard-Thousand Oaks-Ventura, CA20.2228225Santa Cruz-Watsonville, CA18.6229226Napa, CA17.4230217San Diego-Carlsbad, CA16.8231227Anaheim-Santa Ana-Irvine, CA13.4232232San Francisco-Redwood City-South San Francisco, CA11.4233234Salinas, CA10.3234231Los Angeles-Long Beach-Glendale, CA8.4235233Corvallis, OR7.2236195Data from the National Association of Home Builders
Perhaps the most shocking part is how quickly affordability fell away.
At the end of 2020, Boise City’s HOI was 50.8% despite a lower area median income. But in the two quarters since, the median home price has gone up nearly $100,000, driving the HOI down nearly 30 percentage points.
Boise City was already becoming less affordable as home price growth outpaced income growth. However, it’s clear that Boise City's little secret got out early in 2021, sending the area into a tailspin of housing affordability.
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With the national median sales price at a record-high $350,000, home affordability is down nationwide. Just 56.6% of homes sold in the second quarter of 2021 were affordable at the national median income of $79,900. That’s down from 63.1% last quarter.
But some areas have been more resilient to price increases than others. The Rust Belt states of Pennsylvania, Ohio, Michigan, and Illinois claim 13 of the 20 most affordable metro areas, but just one of the top five.
Metro area HOI (% of homes affordable for median income) Area median family income (000’s) Area median sales price (000’s) Cumberland, MD-WV94.060.8116Davenport-Moline-Rock Island, IA-IL93.676.3125Sierra Vista-Douglas, AZ93.266.9198California-Lexington Park, MD92.7116.5325Fairbanks, AK92.392.5296Data from the National Association of Home Builders
It’s interesting to note that the median family income of Davenport-Moline-Rock Island is nearly identical to Boise City. However, 93.6% of homes are affordable there compared to 21.1% in Boise.
The pandemic increased migration to more affordable mid-size metros like Boise, driving home prices higher than locals can afford on the median income. It seems only a matter of time before the people being priced out of Boise-like metros continue the push inland in search of affordability.