Jobs are everything to an economy. Period. Almost every potential homebuyer needs a job. Job growth in Idaho was an impressive 3.27 percent in the 12 months ending August 2016, second best in the entire country, trailing just Oregon at 3.31 percent. Boise’s job growth was almost double the 1.72 percent growth rate nationwide.
The Boise City-Nampa Metropolitan Statistical Area grew at an annual pace of 3.36 percent in the most recent 12 months, ranking 47th best out of 348 MSAs and divisions nationwide. Boise-Nampa added 9,800 net new jobs in the past year and now totals 301,500 working people.
The latest unemployment rate for the Boise MSA was 3.7 percent at the end of August, considerably lower than the national 4.9 percent rate. The Federal Reserve considers an unemployment rate in the range from 5.0 to 5.5 percent as full employment.
Perhaps more impressive is the latest housing sales trend in Canyon and Ada counties. Home sales year-to-date through August totaled 7,914 units, up 6.8 percent from the same period a year ago. This comes after a 19.7 percent increase from 2014 to 2015. In contrast, U.S. existing homes sales were up just 3.27 percent year-to-date and 6.48 percent from 2014 to 2015.
The median existing home price in the Boise MSA rose from $190,100 in the second quarter of 2015 to $208,200 by the end of the second quarter of 2016, a gain of 9.5 percent, according to the National Association of Realtors. The median U.S. home price for the same period was $239,100, up 5.57 percent.
From a building perspective, the Boise housing market continues to be underbuilt, considering aggregate supply and demand.
From 2012 through 2015, the Boise MSA added 1.7 net new jobs for each new residential building permit issued. These permits included all housing from a single apartment unit to the largest mansion. Economists consider supply and demand in balance when there are 1.25 to 1.5 net new jobs per new unit. In the 12 months ending June 2016, there were an average of 1.57 new jobs per new dwelling unit.
The positive economic data of the Boise housing market is supported by strong fundamentals.
Ted C. Jones, Ph.D., is senior vice president and chief economist for Stewart Title Guaranty Co. firstname.lastname@example.org. This column appears in the Nov. 16-Dec. 20, 2016, edition of the Idaho Statesman’s Business Insider magazine. Click here for the e-edition (subscription required).