Boise-area home prices increase 4 times as fast as income
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Affording Boise
Soaring rents. Skyrocketing home prices. The double-digit rates of increase in the costs of Boise-area housing create increasingly urgent problems for low-income, working-class and even moderate-income Idahoans who need places to live. This is Affording Boise, a series of Idaho Statesman special reports on housing.
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Wages aren’t keeping up.
As the housing crisis in Boise festers, with skyrocketing prices for houses, a key factor at play is that people aren’t earning enough to stay on pace. With rising rents, too, that’s resulted in families living in cars and single mothers moving to multiple school districts in just a couple of years.
High demand and low supply are driving prices up. Stagnant wages are driving people out. As housing costs increase faster than wages increase, affordability dwindles.
“For the average Joe, it’s getting pretty unaffordable,” labor economist Jan Roeser said by phone. “… The data makes it pretty clear how Boise’s price has escalated.”
Roeser, who works for the Idaho Department of Labor, called Boise an “overpriced market” because of the disconnect between home prices and incomes.
Data from the U.S. Census Bureau, the Bureau of Labor Statistics and the Intermountain Multiple Listing Service tell the story of the growing disparity between workers’ incomes and the cost of housing.
In February 2012, the median price of an Ada County home was $158,000. By February 2017, it was $256,600, up 62.4{73375d9cc0eb62eadf703eace8c5332f876cb0fdecf5a1aaee3be06b81bdcf82}. Five years later, in February 2022, it was $549,900.
That’s a 114.3{73375d9cc0eb62eadf703eace8c5332f876cb0fdecf5a1aaee3be06b81bdcf82} increase from 2017 and a 248{73375d9cc0eb62eadf703eace8c5332f876cb0fdecf5a1aaee3be06b81bdcf82} increase from 2012.
Meanwhile, the median household income in Ada County was $53,909 in 2012. By 2017, it was 12.9{73375d9cc0eb62eadf703eace8c5332f876cb0fdecf5a1aaee3be06b81bdcf82} higher — $60,858. Now, Roeser estimates the median household income at $77,272 (a 27{73375d9cc0eb62eadf703eace8c5332f876cb0fdecf5a1aaee3be06b81bdcf82} increase from 2017), based on 2019 data adjusted using the Employment Cost Index, a federal survey of employer payrolls to monitor changes in employee compensation.
So in the past five years in Ada County, home prices have increased 4.2 times faster than incomes. In the past 10, they increased 5.7 times faster.
The median house now costs seven times as much as the median income, compared with 2.9 times in 2012 and 4.2 times in 2017.
Roeser said the steep rise in housing costs has pushed some people to Canyon County, which has long been cheaper than Ada.
But Canyon County doesn’t offer much relief anymore for ordinary workers. The median price of a home in Canyon County rose from $169,754 in February 2017 to $434,450 — an increase of 156{73375d9cc0eb62eadf703eace8c5332f876cb0fdecf5a1aaee3be06b81bdcf82}. Canyon’s median household income went from $47,324 to an estimated $63,199 — a 33.7{73375d9cc0eb62eadf703eace8c5332f876cb0fdecf5a1aaee3be06b81bdcf82} increase. Home prices increased at a rate 4.6 times faster than incomes.
In February 2012, the median price was $87,000 while the median income was $41,555.
The median house now costs 6.9 times as much as the median income, compared with 2.1 times in 2012 and 3.6 times in 2017.
Since homeownership has become more difficult for people, more are renting. Apartment-complex construction in the Treasure Valley has boomed in recent years, but demand outstrips supply, and rents have soared.
That’s further straining the limited supply of rentals. In the fourth quarter of 2021, the vacancy rate of rentals in Ada and Canyon counties was 1.6{73375d9cc0eb62eadf703eace8c5332f876cb0fdecf5a1aaee3be06b81bdcf82}, according to the National Association of Residential Property Managers.
Meanwhile, the median two-bedroom apartment in Boise now rents for $1,218 per month, up from $952 in March 2020, according to Apartment List.com.
The government recommends that people with low and moderate incomes spend no more than 30{73375d9cc0eb62eadf703eace8c5332f876cb0fdecf5a1aaee3be06b81bdcf82} of income on housing and related costs.
For Ada County households earning the median income, that means no more than $23,181 per year, or $1,932 per month.
“Affordable housing for those individuals that just make middling, I mean, better than average, but certainly not what you would consider high income — there’s really not apartments for them to rent, there’s not homes for them to buy,” Roeser said. “It’s really quite a shame.”
In November, Boise was ranked the least affordable city in the United States, according to a study from Oxford Economics, an economic forecasting company in England. The study evaluated income and home prices.
Housing costs may be more attainable for people moving to Boise from other places where they’re making more money and thus can afford higher prices, or from cities where housing is more expensive than in Boise, so people can use the proceeds from selling their houses there to buy here.
Traditionally, education has been the most effective way to eventually earn higher wages, Roeser said. As housing costs rise, she views leveraging education for more money as a way for people to become more competitive in the real estate market.
Roeser said she thinks the median household income will go up in the next few years. Employers will have to try to keep up with housing costs, and people may leave the area until then, she said.
For now, “the data speaks for itself,” Roeser said.
/cloudfront-us-east-1.images.arcpublishing.com/dmn/O2J5Z4GLWVJNII37X5C2376ZPM.jpg "Home mortgage firm Mr. Cooper laid off almost 700 employees as loan demand sank")
