Real estate data company RealtyTrac says Boise is in better shape than most of the country when it comes to the difference between wages and home prices.
RealtyTrac looked at wage growth and home price growth from 2012 to 2014 in the nation’s 184-largest metro areas. Nationally, price growth outpaced wage growth 13-to-one. RealtyTrac vice president Daren Blomquist says in Boise, it was closer to four-to-one.
“Home prices in Boise have increased 22 percent over these last two years during this housing recovery,” Blomquist says. “During this same time period we’ve seen a 4.9 percent increase in average weekly wages in Boise.”
That’s a faster growth in home prices than the nation as a whole, but a much faster growth in wages. A report out last week from the U.S. Bureau of Economic Analysis showed Idaho had one of highest increases in personal income in the country from 2013 to 2014. Of course, Idaho has among the nation's lowest wages.
Blomquist says, while Idaho’s wage and home price gap is better than much of the country, it is not sustainable. If it continues to widen he says, the area will find itself inside another housing bubble. But he says he expects Boise’s price growth to level off soon.
“That will mean those buyers who are in the market right now who maybe are having trouble finding a place to purchase, they don’t have to have that urgency to buy now," he says. "They can wait a little bit until the time is right for them.”
Blomquist says some places, like coastal California, are already in a housing bubble. He says like the housing bubble before the Great Recession, it’s being driven by institutional investors. He doesn’t think big investors are buying much in Boise yet.
He says in many California cities home prices have gone beyond the means of the average person.
“One of the other things we looked at is affordability. ‘Are we seeing homes that are unaffordable in each market?’ And in Boise that is not the case yet," he says. "We’re still showing that the median priced home in Boise requires 28 percent of the median income earner’s income. Twenty eight percent is still within that range of being affordable. In fact 28 percent is kind of the dividing line traditionally [between affordable and not affordable].”
Find Adam Cotterell on Twitter @cotterelladam
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