BOISE — As the Treasure Valley continues to grow at a breakneck speed, the cost of housing rises with it.
According to a monthly report from Boise Regional Realtors, the number of existing homes that sold for $1 million or more went up by 25 percent in the year since March 2018. The number of existing homes that sold for between $700,000 and $999,999 went up by 31 percent, according to the report.
“Part of it is there’s a little bit of price inflation,” said Phil Mount, president of Boise Regional Realtors. “It’s amazing what a million dollars doesn’t buy you anymore.”
The cost of new construction is also going up, according to the report.
Part of the issue is a lack of contractors and the cost of raw materials is on the rise. The cost of soft timber went up 25 percent last year, Mount said.
Additionally, Ada County saw a mass exodus of trade workers during the recession. Many moved away to find work and didn’t return, he said. As a result, contractors are having to pay tradesmen more for their work, and the cost of new construction is going up, Mount said.
In March, new construction sales made up roughly 40 percent of home sales in Ada County, and the median new construction home sale hit $335,000, a record for Ada County.
For reference, Mount said the median cost of a single-family home seven years ago was $153,590, less than half of what it is now.
“We’re looking a little better than we have been,” he said, noting that Ada County has seen slightly higher inventory in the past two months. “We do seem to have a little more inventory at that starter price.”
According to a report from Intermountain Multiple Listing Service, inventory has increased month to month since January, the bulk of available homes being in the $300,000 to $400,000 range.
Another issue that Boise is having is that wages have not kept up with growth and cost of housing, Mount said.
According to the Bureau of Labor Statistics, Ada County saw a wage increase of 5.1 percent between first quarter 2017 and first quarter 2018. However, in that same time, the cost of a single-family house rose 16.6 percent, according to 2018 reports from Boise Regional Realtors.
Mount considers homes priced in the $250,000 range to be starter homes for Ada County. Houses priced lower than that are becoming increasingly rare, Mount said, noting that the cheapest listed house in Ada County right now is going for $150,000.
Places such as Portland, Seattle and Salt Lake City have all experienced population booms but have all recovered for the most part.
“They’ve now, after a huge explosion in growth, they’ve built their way out of their inventory problem,” he said. That isn’t the case for Ada County.
“We’re continuing the trend we’ve been on for the last two to three years,” Mount said. “It’s a trend that is not unique to Boise.”
While Boise is one of the fastest-growing communities in the country, Mount said a number of other cities such as Birmingham, Alabama, are having similar housing issues.
“It’s a common problem,” he said. “The city of Boise in particular is taking good steps with affordability.”
Still, Mount believes that the Treasure Valley will be fine. Years ago, Mount said many of the people moving to the Treasure Valley were either retirees or those who had the ability to work remotely. That’s changing, he said.
“In the last three or four years, we’re getting a lot of employers that are coming to the Boise Valley,” Mount said. “It’s a mix of stuff, I think we’re still seeing people who are coming here for quality of life and can telework.”