Boise Rental Market & Vacancy Rates

Overview

The average rent in Boise, ID is $1,343 per month. Boise rents have increased 12.57% over the past year and 20.65% over the past three years. The vacancy rate for all rental properties in Boise is 2.63%, down from 2.9% one year ago.

Average Rents in Boise

On a per month basis, the average house rent in Boise is $1,409, a decrease of $8 (0.56 percent) over the previous year.

We continue to see high demand for four and five bedroom single-family rentals particularly in Boise, Meridian, and Eagle. While down from their records, both four and five bedroom rentals finished the fourth quarter of 2018 at the third highest rate in history.

The average apartment rent in Boise is $959 per month. Multifamily rents declined from the previous record set just last quarter of $1,014 but have risen $91 (10.48 percent) over the year prior.

One and two bedroom multifamily units increased in price by $85 and $125 respectively while three bedroom rentals rose $4, remaining virtually unchanged.

Boise Rental Vacancy Rates

Vacancy rates finished the 4th quarter of 2018 at 2.63%. This is a decrease of 0.27 percent from Q4 2017 when vacancies stood at 2.9 percent.

Single-family vacancies rose to 3.30 percent, an increase of 0.09 percent from the previous quarter. In the fourth quarter of last year, vacancies stood at 2.6 percent. Notable - we went from the highest vacancy rate in three years (Q4 2016) to the lowest in the first quarter of 2018.

Multifamily investment property vacancies rose to 2.32 percent, up 0.47 percent from last quarter but down 0.68 percent from Q4 2017.

Multifamily vacancy rates finished Q3 at 1.85 percent. The lowest since the 1.7 percent rate we saw the year prior, and second lowest in four years. In the first quarter of last year, vacancies were 5%. As with houses, Q4 of 2016 was also a multiyear high for vacant apartments.

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Residential Investment Property Summary and Outlook

Demand for rentals throughout the Boise area continues to remain healthy. None of the property managers we have spoken to are reporting any issues filling vacancies.

We see high demand, particularly for short-term rentals, from people moving to Idaho from other states. This helps explain the jump in four bedroom single-family rentals to $2,044 in Q2 2018 (all-time record high).

The significant uptick we saw in multifamily vacancies in the first half of last year, most likely due to the completion of a number of new construction projects, has mostly reversed itself. For 2017 as a whole, vacancies rose to 3.35 percent, up from 3.10 percent in 2016. Still much lower than the 5 percent rate we saw at the beginning of last year.

The increases in single-family vacancies we saw in 2016 did not continue into 2017. Last year we saw vacancy rates drop to 2.98 percent from 3.30 percent in 2016.

While vacancies increased in 2016 compared to the year before, it is essential to keep in mind vacancies in 2015 were near record lows. Historical market vacancy rates average 5-6% for both single and multifamily rentals.

Prices

The median home price in Boise, ID metro area (Ada County) is $320,260. In the fourth quarter of 2018, the median sales price for duplexes was $299,450, $560,000 for fourplexes and $677,450 for apartment buildings.

Affordability

Rents at 30% or below household income are typically considered affordable. In fact, many property management companies require an income of at least three times the asking rent. Based on U.S. Census data, the median household income in Ada County is $60,151, meaning rents of $1,504.

Supply

While there are no signs of a drop in demand for multifamily units from potential renters, it is apparent supply at the higher price points is catching up with demand. In Boise, last year we saw the completion of the Arboretum (162 units), Havenwood (48 units), Kensington (323 units), The Fowler (159 units), The Watercooler (37 units), Tree Valley (32 units). Note: these are not included in the totals below.

Apartment Projects Under Construction in 2018

• Boise = 705 units
• Meridian = 902 units
• Eagle = 446 units
• Garden City = 32 units
• Nampa = 280 units
• Kuna = 136 units
• Caldwell = 128 units
• Total = 2,629

Keep in mind that the Boise area still has fewer apartment buildings than a typical metro area this size. Single unit properties, mostly houses, make up more than half of the Boise rental market.

Building Permits Issued for Apartment Units

Year	Ada	Canyon	Total
2017	1,467	184	1,651
2016	1,147	208	1,355
2015	1,022	11	1,033
2014	1,675	91	1,766
2013	551	8	559
2012	318	65	383
2011	212	144	356
2010	2	0	2
2009	13	0	13
2008	288	61	349
2007	698	390	1,088
2006	730	183	913

* 5 units or more
**Source: Valbridge/Mountain States Appraisal

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Boise Residential Income Property Capitalization Rates

Capitalization Rate, also known as "Cap Rate," is a good starting point to compare Boise investment opportunities quickly. Many more factors need to be looked at, such as the growth or decline of the potential income and the increase (appreciation) in the value of the property.

Capitalization Rate = Yearly Net Income/Total Value

Speak to a Boise Income Property Expert. Contact Us or submit the form below – we look forward to assisting you.

*Select Data obtained from the 2018 SW Idaho Vacancy Report Q4 from the Southwest Idaho Chapter of the National Association of Residential Property Managers.