A survey from a personal finance website ranks Boise as one of the best cities for first-time homebuyers.
For anyone who has tried to buy a home in Boise recently for less than $250,000, first time or not, the ranking may seem like a joke. Homes in that price range are nearly nonexistent.
From January through May, only 600 homes throughout Ada County sold in that price range, according to an analysis by real estate agent Mike Turner of Front Street Brokers. In the same period of 2018, 1,200 such homes sold, and of 2017, 1,800 homes did.
“There’s no houses out there at that price,” Turner said.
Best cities for first-time homebuyers
WalletHub ranked Boise No. 3 among midsized cities — those with 150,000 to 300,000 residents — and No. 5 overall.
Boise received 65 points out of a possible 100. The city ranks 57th for affordability, 125th for the strength of its real estate market and 28th in quality of life. Each of those three areas accounted for a third of the points possible. Ratings higher than 150 are considered better than average.
Boise ranked high overall anyway, because other cities ranked much lower in certain areas. For example, Overland Park, Kansas, which topped the midsized list, ranked 104th in affordability.
Affordability included the cost of homeowners insurance and the cost of living. The real estate market included rent-to-price ratio, median-price appreciation, the share of mortgage holders with negative equity and median home-price appreciation. Quality of life looked at quality of schools, job market, recreational opportunities, weather and driver-friendliness, among others.
“The main thing that made Boise stand out is the quality of life,” Jill Gonzalez, a WalletHub anaylyst, wrote in an email to the Idaho Statesman. “The city is a good place for first-time home buyers, as it offers plenty of job opportunities, and entertainment and recreation options. In addition, Boise’s residents benefit from good infrastructure, and low average costs for homeowner’s insurance.”
The Ada County housing market has sizzled the past few years. Since last year, prices have set records again and again in both Ada and Canyon counties.
In May, the median price of a single-family home in Ada County hit a record $342,990, up nearly $8,000 from $335,000 in March, also a record at the time. Those price jumps came after 2018 saw Ada median home prices rise 18%, according to the Intermountain Multiple Listing Service.
WalletHub’s survey was based on 2018 data and took into account housing affordability, spokeswoman Diana Polk said.
Against that backdrop, home ownership in the Boise metro area has declined from 72% in 2000 to 68% in 2017, according to statistics from the U.S. Department of Housing and Urban Development.
And rental prices are no bargain. Boise rents increased last year at one of the nation’s highest clips. Apartmentguide.com said earlier this year that the cost of an average one-bedroom apartment increased 14.4% in 2018 and rented for $1,062 in February. A two-bedroom apartment went for $1,344, after a 20% increase in 2018.
Corporate landlords have snapped up an increasing number of homes that previously might have gone to first-time buyers. American Homes 4 Rent, for instance, bought 483 homes in the Treasure Valley between 2013 and 2018. Nationwide, the Agoura Hills, California, company owns upwards of 50,000 homes.
Despite the tight market, Rick Gehrke, an agent with RE/Max Executives in Nampa who sells in both Ada and Canyon counties, said first-time homebuyers can find homes under $250,000 if they lower their expectations. A modern home with a three bedrooms and a two-car garage may not be available in that price range.
“A two-bedroom home with one bathroom and 900 square feet may be all they can find,” Gehrke said. “They should view that as a stepping stone for the house they ultimately buy which might be available in five years.”
Nationally, 2018 was the best year for first-time buyers since 2006, according to a study by Genworth Mortgage Insurance. First-time homebuyers bought 2.1 million homes.
“First-time homebuyers played a key role in reshaping the demographics of many states with a significant shift in homeowner population out of states such as California, Illinois, Massachusetts, Michigan, Louisiana, New York, Texas and into states such as Arizona, Florida, Georgia, Delaware, Idaho and Nevada,” wrote Tien Liu, Genworth’s chief economist, in the report.
In the WalletHub ranking of midsized cities, cities that Boise beat out include Orlando, Florida (No. 10); Vancouver, Washington (No. 18); Tacoma, Washington (No. 23); Reno (No. 32); Spokane, Washington (No. 35) and Salt Lake City (No. 44).
On the midsized list, Overland Park was followed by Grand Rapids, Michigan, and then Boise. Among all cities, Tampa, Florida, was first, followed by Overland Park; Thornton, Colorado; and Grand Rapids.