Idaho’s in-migration is noticeably increasing, industry experts say, and is particularly attracting upper-middle and middle-class households, in addition to previously reported new homeowners.
The Boise metropolitan service area boasts the nation’s highest in-migration rate (+67%), according to an October 2020 TOK Commercial report, and the impact on area housing has been significant.
Experts attribute this to some employees no longer needing to live close to their employers, and, as a result, many are choosing to move to locations offering appealing outdoor lifestyle amenities, safe communities and affordable costs of living.
ESRI forecasts the estimated growth rate for the Boise MSA at 2.18% for 2020-2025, which is over three times the national average (currently about 0.66%), the report stated.
This could also be attributed to Idaho’s economy being poised for a robust rebound, the TOK Commercial report stated, and Idaho is surging ahead in national rankings for economic growth. Idaho is the top-ranked state in the nation for economic prosperity (FFIS Index), financial solvency (Barron’s Report), personal income growth over the past year (PEW) and is the #3 state for best employment rate (U.S. Bureau of Labor Statistics).
“Idaho’s economy ranks at the top of the nation thanks to a healthy, collaborative business environment and tight labor market,” the TOK Commercial report stated. “Idaho’s 4.2% unemployment rate (the third lowest in the nation) indicates that current job market conditions are steadily approaching rates that were seen prior to the arrival of the pandemic and well off April’s 11.8% high mark for unemployment.”
New arrivals to Idaho have noticed that limited housing stock is driving sales prices for single family residential housing to record levels, the report stated, and is sending multifamily rental rates soaring.
Despite that, Idaho is attracting more people into the state.
Between 2017 and 2018, Idaho experienced a net migration of 2,708 upper-middle-class people, with 4,672 moving into the state and 1,964 moving out of the state, according to a recent report by SmartAsset. This study did not look at how upper-middle-class migration has affected local economies or real estate markets, SmartAsset stated in an email message.
Idaho ranked seventh in the top states upper-middle class households are moving to, according to SmartAsset, defining those incomes as being between $100,000 and $200,000. Florida ranked number one, followed by Texas and Arizona.
The upper-middle class now represents 12% of all American households, according to SmartAsset, up from 10% nearly 40 years ago.
“This growing, high-earning demographic … is also on the move, migrating across state lines potentially for job opportunities, attractive housing markets or lower tax liabilities,” the report stated. “Though Idaho has fairly high income taxes, it has low property taxes and is actually one of the best states for homeowners.”
Idaho is also appealing to middle-class households, as SmartAsset reports, hosting nearly 50% of its households as middle-class. The median household income (adjusted for cost of living) is $65,574, according to the report, and the median home value is $255,200.
Idaho ranks as the second-top state for middle-class households, meaning it is likely “better suited to this socio-economic class than others.” SmartAsset analyzed data on metrics related to income, jobs and homeownership.
Idaho has seen a slight uptick in homeownership rate, according to SmartAsset, where the state’s homeownership rate increased from 70.7% in 2018 to 71.6% in 2019.
Idaho ranks in the middle of the pack for two metrics considered. Out of all 50 states and D.C., Idaho has the 20th-highest median home value and the 24th-lowest median household income adjusted for cost of living.
Idaho ranks in the top 20% for five of the seven metrics in the study.
“From 2015 to 2019, the median household income in Idaho rose by roughly 26% — the most of any state — from about $48,300 to almost $61,000,” SmartAsset stated. “Idaho has the sixth-highest percentage of households in the middle class (49.9%), sixth-highest homeownership rate (71.6%), second-best Gini coefficient (just over 0.43) and second-highest four-year middle-class job growth (about 42%).”
The middle class, generally characterized as households that earn approximately two-thirds to two times the median national income, comprises slightly more than half of American households, according to SmartAsset. That figure (52%) is down from 61% in 1971.
Other noticeable trends
Idaho also seems to be a good host for multifamily living.
“Strikingly, even as the current housing crunch doesn’t appear to be easing any time soon, the number of multifamily permit applications are down by 70% as compared to 2019 and permit values are similarly only about a third of last year’s values,” TOK Commercial stated in its October report.
Multifamily housing is classified as commercial development and real estate.
“New commercial permits in the Boise MSA began 2019 with solid momentum in January and February,” according to TOK Commercial. However, “the March arrival (and prolonged impact) of the COVID-19 pandemic muted continued growth as the number and value of commercial permits in 2020 has closely followed 2019’s trendlines, albeit at about 50% of the previous year’s activity.”
A strong case for optimism came following September’s permit data, with 14 commercial permits with a total value of nearly $50 million being pulled. When compared to September 2019, that’s up 133% by count and also boasts a 100% increase in value, according to the report.
The takeaway is to “look for even more cranes, cones, and high-vis vested contractors managing numerous construction projects across the Boise Valley.”