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.
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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.”
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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.
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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.
Boise May Be Center of Real Estate Collapse
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
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