Idaho experienced a dramatic housing boom from 2018 through 2023.
This was the steepest increase of any state during that period.
These rapid gains far outpaced local incomes.
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Statewide, home values rose about four times faster than household incomes.
With house prices so high relative to pay, affordability plummeted.
By 2023, Idaho had become one of the five least affordable states for homebuyers.
Many local families simply could not keep up with the cost of housing.
Pandemic Effects on the Housing Market
The COVID-19 pandemic further turbocharged Idahos market.
At the same time, there were too few homes for sale to meet the surge in demand.
This led to intense bidding wars during 20202021.
It became common for homes to sell above asking price within days of listing.
Market Cooling in 2022-2023
By late 2022, the market began to cool off.
Higher loan costs made monthly payments more expensive, pricing some buyers out.
Buyers suddenly had a bit more negotiating power than during the frenzy of 2021.
Even with this breather, affordability remained a serious challenge in 2023.
Who Are the Homebuyers?
Many Millennials (people born in the 1980s and 90s) reached their prime homebuying years in this period.
However, first-time buyer participation actually fell to historic lows by 2022.
Cash-Rich Buyers Advantage
There are a few reasons behind this decline.
During the height of Idahos boom, cash-rich buyers had a big advantage.
These buyers often outbid true first-timers who didnt have such resources.
As a result, the typical first-time buyer ended up waiting longer and was older than in the past.
By 20222023, Boomers actually surpassed Millennials as the largest generation of homebuyers nationwide.
In Idaho, many Boomers often recent retirees from pricier states relocated or competed for homes as well.
Boomers frequently had significant cash or home equity, making their offers tough to beat.
Investment Buyers
Meanwhile, real estate investors were also active during the boom.
They particularly targeted entry-level homes (the same ones first-time buyers wanted).
This investor activity worsened the shortage of starter houses for regular buyers.
Overall, the average homebuyer in 2021 was quite different from the average buyer a decade earlier.
The Boise area and Coeur dAlene in north Idaho were prime magnets.
By mid-2021, about 73% of people viewing Boise homes on Redfin were from outside Idaho.
This flood of transplants often with home-buying budgets well above local norms pushed prices up rapidly.
Other parts of the state felt this trend as well.
North Idaho became a popular escape for West Coast residents, contributing to Coeur dAlenes housing boom.
Many of these newcomers were bringing budgets that far exceeded what local Idaho buyers could typically afford.
These cash-heavy transplants often bid well above asking price on homes.
Housing prices exploded as a result, climbing beyond what many long-time Idaho residents could pay.
The influx of higher-income buyers drove up home values statewide, and locals found themselves struggling to compete.
This shows that the affordability crunch extended beyond Boise it was felt in communities across Idaho.
What Types of Homes Are First-Time Buyers Purchasing?
Throughout 20182023, single-family detached houses remained the most popular choice for first-time buyers in Idaho.
Attached housing gained ground, especially in Boise and other urban areas.
These kinds of homes are often more affordable for first-time buyers.
For example, townhouse communities sprang up offering brand-new homes at lower prices than comparable single-family houses.
Manufactured Housings Growing Appeal
Manufactured homes (mobile homes) provided another path to homeownership.
In many parts of Idaho, they were among the few properties available under $250,000.
Sales of manufactured homes rose during this period because so many buyers were priced out of ordinary houses.
Upsizing vs.
Downsizing Trends
Buyers choices in home size also varied by life stage.
On the other hand, many older buyers were downsizing.
Empty-nesters and retirees often sold their large family homes and looked for a smaller, easier-to-maintain place.
Ada County (Boise, Meridian, etc.)
saw its median home price rise to around $540,000 by early 2023.
As Boise became very expensive, many first-time buyers started looking in outer communities for relief.
Builders followed suit, putting up new subdivisions in these fringe areas where they could offer slightly lower prices.
Despite a slight market cooldown by 2023, Boises housing remained competitive.
Kootenai Countys median home prices jumped into the $500,000+ range.
During this period, Coeur dAlene was even ranked among the hottest housing markets in the nation.
The demand was so strong that inventory could not keep up, leading to bidding wars reminiscent of Boises.
By 2023, the rapid growth began to level off, but affordability remained a concern.
However, it did not escape the statewide trend of rising prices.
Home values climbed significantly in the late 2010s and especially during 20202021.
Eastern Idaho (Idaho Falls and Pocatello)
These areas saw more modest growth.
Home prices remained lower than Boises, but still climbed notably during 20182023.
Virtually no part of Idaho was untouched by these trends, though the intensity varied by region.
Comparing to 20082017: Then vs. Now
The decade before 2018 looked very different for Idaho homebuyers.
After the 2008 housing crash, home prices were low and there were many homes on the market.
First-time buyers in 20102015 had an easier time they could find affordable houses and even negotiate on price.
Fewer people were moving in from out of state then, so buyers were mostly local families.
There also wasnt the same bidding-war environment.
In fact, buyers were pretty cautious right after the crash, and sellers often had towaitfor offers.
Conclusion
From 2018 through 2023, Idahos housing landscape was transformed.
Looking ahead, Idahos leaders are looking for ways to balance growth with affordability.
