While home prices have averaged a 20% year-over-year increase for several months, some cities have posted gains of over 50%. One of these is Boise, which has become crowded with people from the west coast, and where home prices have risen by over 60%. The figure is not just unsustainable. It is headed for a major reset.
Zillow reports that the median price of a home in Boise was up 59% from March 2021 to March 2022. The only city that topped that was Austin, with a 71% rise. The Boise median home price reached $589,627. The number is so high that it has pushed some long-time residents out of the market. James McGrath, a real estate broker at Yoreevo in New York City, commented: “Anytime prices increased that much in a short period of time, that’s a signal to me that, hey, there’s something brewing here.”
In Boise’s North End neighborhood, prices topped $1 million. This is the first time this has happened to any Boise neighborhood. A report from Florida Atlantic University put Boise at the top of overpriced markets, with homes at a premium of 75% over what they should be worth. In contrast, near the bottom of the list, New York City carried a premium of just under 3%.
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Among metropolitan statistical areas, Boise was one of those with the most rapid population growth from April 2020 to July 2021. It rose 4% to 795,268. New home construction has not kept up.
If high mortgage rates hit housing prices, and they will, markets where homes are overpriced are most subject to resets. Boise is at the top of that list.
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