Boise Rental Market & Vacancy Rates

Overview

The average rent in Boise, ID is $1,366 per month. Boise rents have increased 5.08% over the past year and 20.56% over the past three years. The vacancy rate for all rental properties in Boise is 3.12%, down from 3.2% one year ago.

Average Rents in Boise

On a per month basis, the average house rent in Boise is $1,469, a decrease of $3 (0.21 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 houses finished the fourth quarter of 2018 at the third highest rental rate in history.

The average apartment rent in Boise hit a new record high, jumping $136 to $1,029 (15.23 percent) over the year prior. The previous record was set in the third quarter of 2018.

Boise one and two bedroom multifamily units decreased in price by $15 while three bedroom rentals rose $208 to $1,343, up nearly 20% from twelve months ago.

Boise Rental Vacancy Rates

Vacancy rates finished the first quarter of 2019 at 3.12%. This is a decrease of 0.08 percent from Q1 2018 when vacancies stood at 3.2 percent.

Single-family vacancies rose to 2.73 percent, an increase of 0.13 percent from the previous quarter. In the first 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. In other words, rental house vacancies are barely above all-time lows.

Multifamily investment property vacancies declined to 3.38 percent. Up from 2.32 percent last quarter, but down 0.12 percent from Q1 2018.

Multifamily vacancy rates finished Q3 of 2018 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 2017, 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 2017, 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 2017.

The increases in single-family vacancies we saw in 2016 did not continue into 2017. In 2017 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 $327,200. In the first quarter of 2019, the median sales price for duplexes was $295,000, $550,000 for fourplexes and $961,875 for apartment buildings (5+ units).

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
2018*	1,967	206	2,173
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

* Preliminary
** 5 units or more

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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 Intermountain MLS, Valbridge/Mountain States Appraisal and the 2019 SW Idaho Vacancy Report Q1 from the Southwest Idaho Chapter of the National Association of Residential Property Managers.