Boise Rental Market & Vacancy Rates

Overview

The average rent in Boise, ID is $1,565 per month. Boise rents have increased 14.6% over the past year and 31.8% over the past three years. The vacancy rate for all rental properties in Boise is 2.77%, down from 3.12% one year ago.

Average Rents in Boise

In Boise, the average rental price for all property types in the first quarter of 2020 is $1,565. Rents rose $199, or 14.6 percent from the year prior and are now at record highs.

On a per month basis, the average house rent in Boise is $1,609. That is an increase of $140 (9.53 percent) over the previous year. Single-family rents rose $146 (9.98 percent) from last quarter.

Two bedroom house rents jumped to a record-setting price of $1,363, up $192 (16.40 percent). Properties with three, four and five bedrooms finished the quarter just below the previous highs that were set at various times over the last three years.

The average apartment rent in Boise is $1,058, an increase of $29 (2.82 percent) from the prior year. Rental rates are now just below the record highs set in the second half of last year. Multifamily rents increased by $35 (3.42 percent) from the previous quarter.

Boise one and two-bedroom multifamily units increased in price by $145 and $107 per month, respectively, both hitting new record highs.

Three-bedroom rentals declined $165 to $1,178 and are below the record prices set in the second quarter of 2019.

Boise Rental Vacancy Rates

After falling sharply to five-year lows in the second half of 2019, Boise rental market vacancy rates rose in the first quarter of 2020.

The average vacancy rate for all property types declined to 2.77 percent from 3.12 percent twelve months ago but is up from 1.55% from last quarter.

Single-family vacancies rose to 2.83 percent from 2.73 percent. Vacancies rose from 2.40 percent last quarter, which was near the lowest level we had seen since the beginning of 2015.

Multifamily investment property vacancies declined to 2.71 percent from 3.38, but are also up substantially from the near all-time lows we saw at the end of last year.

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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 with are reporting any issues filling vacancies.

The Coronavirus pandemic is creating new uncertainty in the purchase market for single-family houses, despite lower mortgage interest rates. We expect people that had been considering buying to show a slight preference for renting, at least for the near term.

Monthly rents for all property types are at or near all-time highs. Despite the average rent increasing nearly 15 percent over the last twelve months, the strong house price appreciation in the purchase market continues to keep renting, at least somewhat, affordable by comparison.

Additionally, we continue to see high demand, particularly for short-term rentals from people moving to Idaho from other states.

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 completely reversed itself. For 2019 as a whole, single-family vacancies declined to 2.95 percent, down from 3.04 percent the year prior. Multifamily vacancies declined to 2.32 percent from 2.38 percent in 2018.

While we continue to see a slight uptick in single-family vacancies, rates are still well below the long-term averages. Historical market vacancy rates average 5-6 percent for both single and multifamily rentals.

Prices

The median home price in Boise, ID metro area (Ada County) is $364,490. In the first quarter of 2020, the median sales price for duplexes was $367,000, $570,000 for fourplexes, and $1,000,000 for apartment buildings (5+ units).

Affordability

Rents at 30 percent or below household income are typically considered affordable. In fact, many property management companies require an income of at least two and a half to 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, we continue to see a steady stream of new supply, albeit at higher price points. 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

* Preliminary
** 5 units or more

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.

*This We Know Boise Rental Market Report is based on a survey of 7,369 rental units and refers to the city of Boise and the surrounding areas of Meridian, Eagle, Kuna, Star, and Garden City. Select data obtained from the Intermountain MLS, Valbridge/Mountain States Appraisal, and the 2020 SW Idaho Vacancy Report Q1 from the Southwest Idaho Chapter of the National Association of Residential Property Managers.