Boise Rounds Out The Top Five Hottest Real Estate Markets

Boise State just release its list of the hottest markets in the US, and Boise rounds out the number five spot. Boise with its temperate climate, very strong labor market, and proximity to other metropolitan areas like Portland, Seattle and Salt Lake City, make Boise a prime spot for homeowners. Boise ranked in the sixth spot for May. But with the median age of inventory being only 33 days, the demand for housing being so hot, and prices continuing to increase Boise climbs one spot to number 5 in the nation.

The list was surprising with no cities in California taking any of the top five spots. This is the first time in six years that California is not in the top five hottest markets.

The top ten rankings are:
1 Midland, Texas
2 Columbus, Ohio
3 Boston, Mass.
4 Fort Wayne, Indiana
6 San Francisco/Oakland, California
7 Vallejo/Fairfield, California
8 Buffalo, New York
9 Colorado Springs, Colo.
10 Detroit/Dearborn, Mich. compiled it’s list from June Data looking at search trends, supply, demand, and prices. The sweet spot is when there is limited supply, strong demand and prices are rising. Days on market is a key indicator to the heath of a market. Looking at the top 20 spots the DOM (days on market) averaged only 34 days nationwide.

Housing Prices Aren’t the Only Thing Causing Californian’s to Relocate.

In the Bay Area alone the median price of homes recently surpassed $900,000. Not enough housing is being built and what housing exists is outrageously expensive. But the price of housing is not the only reason Californian’s are moving in droves.

So what does make Californian’s throw their hands up in the air and declare “I’m finished!” It’s the price of childcare, the traffic, dirty streets, the prospects of retirement, to name a few.
Housing Prices - Moving Californians
Many people look at the prospect of retiring and they simply cannot see a day when they can retire with the high cost of taxes, gas and even groceries.

To give you an example, in San Francisco, any income under $117,400 is now considered low income. Whereas, $73,300 is considered very low income. In other areas, like Marin County and San Mateo County low income is also considered $117,400 or less. One year ago that figure was $105,350 where only 1 year before that low income was $98,500. That is an increase of 16% in two years. Alameda and Contra Costa Counties considers low income to be $80,400 and these figures are expected to rise by 10% within the next year.

Finding employment to match those figures is hard to come by. But more importantly finding a job with an annual pay increase of 8-10% to keep up with inflation is even harder to come by. Thus the prospects of being able to retire for many is down right scary.

Even the cost of groceries in California are more expensive. San Francisco, Redwood City and South San Francisco spends 30% more for groceries than the rest of the country. A gallon of milk costs $2.59, in Boise Idaho it costs $1.77 a gallon. A loaf of bread will run you $4.97, in Boise Idaho it will run you $1.48.

Interestingly, Oakland, Berkeley and Hayward residence spend 6% more than those in San Francisco. The cost of buying a loaf of bread or a gallon of milk may not break you. But when you are filling up an entire shopping cart for a family of four to five, it really adds up fast.
Housing Prices - Bridge Toll Costs
The cost of traveling is also prohibitive. To cross a bridge in the Bay Area can cost you as much as $6 or higher. The gas tax in California is currently set at $0.42 per gallon. Add that to the fact that Californians already pay about $0.50 higher than the national average and the cost of getting too and from work is a real concern.

In the last year over 1,000,000 Californians have moved out of the state with the largest exodus coming from the Bay Area. But you cannot pin the exodus one thing. Traffic jams, child care costs, crime rates, inflation and cost of living, poor roads, and many more reasons are to blame.

Portrait of Robert Schopke
Rob Schopke
Phone: 208-402-8700

Src. SF Gate, SF Chronicle

FIVE Things to Know About Investing in Single-family Rental Homes

ONE: Know Your Investment Criteria First.

Before making any investment you need to know what your financial objectives are. Are you looking for a stable investment for retirement with little downside but provides a stable and reliable income? Looking for a more expensive single family residence in a great school district may provide added stability, a reliable income stream, with lower risk. 

Are you looking for a longer-term investment that produces the maximum income. Investing in less expensive houses and holding them for the longer-term may be the risk level you want. Often lower priced homes will be riskier with more upside return. You may get higher income for the money and experience more appreciation in the long-term. 

TWO: Separate Investing From Operations  

Just like financial brokers help manager your money, a local property management firm can assist you in renting and maintaining your investment property. Property management firms can handle the day-to-day management tasks of rent collection, repairs, maintenance and leasing. 

While some people will choose to self-manage their investment property, property management firms can save you a lot of time and money. These firms typically charge between 7-8% of the rent and they mange properties for a living. Another benefit is that property management firms may allow you to buy investment properties outside of where you live. 

THREE: Don’t Limit Your Investment Property Search to Where You Live.

If you lived in Atlanta, Georgia, you wouldn’t buy a Coca-Cola Stock just because they were headquartered near where you lived. You would make the best financial decision you could make. Say you live in an area of limited growth, but you knew that Boise Idaho was one of the fastest growing communities in the USA, would it be smart to invest in the Boise market. It would! 

You couldn’t buy an investment property for $150,000 in Seattle, Denver, or San Francisco, but you could in Boise, Idaho. Perhaps investing and hiring a property management firm in Boise would allow you to diversify your investment portfolio, take advance of the rapid market appreciation and secure a more stable income for yourself. 

FOUR: Real Estate Investing is a Marathon, Not a Sprint

You might be familiar with all the reality home flipping shows where someone buys a fixer-upper, fixes it up and sells it for a fast profit. While that may be a way make a one-time profit, real investing in single family homes is completely different. It is about building long-term wealth.

Don’t be influenced by the short-term fluctuation in your real estate portfolio. You may only own your investment property got a few months before a tenant moves out. Don’t be spooked. Your next tenant may live there for several years before moving out. If you buy a nice house in a nice area your income and asset appreciation  should be quite lucrative over time. Invest for the long term. Use your real estate investments as a wealth building engine and to diversify you overall investment portfolio.

FIVE: Finding a Great Agent

Don’t try and go it alone. Finding a great real estate agent can be extremely beneficial. Great agents study the markets both local and nationwide. They keep current on new laws and represent you in all negotiations. A great agent can mean the difference between buying an investment property or buying a GREAT investment opportunity. Building a relationship with an agent can help you regardless of where you are buying your next investment property.


RE/MAX Executives