Boise Rental Market & Vacancy Rates

Overview

The average rent in Boise, ID is $1,566 per month. Boise rents have increased by 0.06% over the past year and 20.46% over the past three years. The vacancy rate for all rental properties in Boise is 1.20%, down from 2.77% one year ago.

Average Rents in Boise

In Boise, the average monthly rent for all property types in the first quarter of 2021 is $1,566. Rents rose $1, or 0.06 percent from the year prior and are now slightly above the record highs the Boise area set in the first quarter of 2020.

On a per-month basis, the average house rent in Boise is $1,743. That is an increase of $134 (8.32 percent) from the previous year. Single-family rents rose $105 from last quarter and are now above the previous record high of $1,703 we saw in the second quarter of 2020.

Rents for three and four-bedroom houses hit new record highs in the quarter, rising from $268 (17.67 percent) to $1,785 per month and $339 (17.42 percent) to $2,285 per month, respectively. Two and five-bedroom house monthly rental rates showed a decline from the record highs we saw 12 months ago. Essentially, we saw a notable jump in rents for two and three-bedroom properties and a decrease in rents for two and five-bedroom houses.

The average apartment rent in Boise is $1,119, an increase of $61 (5.77 percent) from the prior year. Multifamily rents rose $46 from last quarter.

Boise two-bedroom multifamily units increased in price by $84 (7.62 percent) per month, hitting a new record high.

One-bedroom rentals rose $94 (10.51 percent) but are still slightly below the record highs set in the third quarter of 2020. Apartment units with three bedrooms rose in price by $5 (0.42 percent) from the year prior but are down $219 from the all-time record set in the second quarter of 2020.

Boise Rental Vacancy Rates

The average Boise rental market vacancy rate for all property types declined to a new record low of 0.75 percent from 2.77 percent twelve months ago.

Single-family investment property vacancies declined to 1.20 percent from 2.83 percent the year prior. Apartment vacancy rates fell to 0.53 percent from 2.71 percent.

After falling sharply to a five-year low in the second half of 2019, vacancy rates rose steadily throughout the first three quarters of 2020. Then in the fourth quarter of 2020, combined single and multifamily vacancy rates plunged to the lowest level on record before falling to new records this quarter.

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Residential Investment Property Summary and Outlook

Pandemic-driven demand for rentals is pushing vacancies to record lows throughout the Boise metro area.

Boise's significant population growth over the past ten years was only accelerated as COVID-19 gripped the country at the beginning of 2020.

People are fleeing overpriced and overcrowded coastal cities as work-from-home flexibility has become a reality for many.

Limited inventory and increased demand have caused local home values to surge to new records.

Despite average rents increasing 24% over the past three years, strong house price appreciation in the purchase market continues to keep renting, at least somewhat, affordable by comparison.

The shortage of properties in the purchase market is driving potential buyers to the rental market.

At the end of 2020, single-family vacancies declined to 1.5%, down from 2.95% the year prior. Multifamily vacancies fell to a record low of 0.69% from 2.32% in 2019.

When vacancy rates rose above 4% in the second quarter, it appeared to us to be more a reflection of renter's reluctance to move during a pandemic than inherent weakness in the rental market. The first quarter of 2021 has made it vividly clear – demand for rentals is almost literally off the charts.

Both single-family and multifamily rents are at or near all-time highs. At the end of 2020, we saw the most popular unit types for each, three-bedroom houses and two-bedroom apartments, jump to new records of $1,695 and $1,105, respectively.

Still, recent price records for rents are more of a reflection of demand than aggressive price increases by landlords. At the beginning of 2021, by our calculations, more properties may be below market rates than at any other time in the last three years. However, a new round of rental increases in the first quarter of 2021 is beginning to close the gap.

Property owners had initially been reticent to raise rental rates as the pandemic set in and have been slow to catch up.

While record-low vacancy rates may have been brought on by a confluence of events that are not likely to repeat themselves; market forces will continue to keep vacancies below their long-term averages (and rental rates high) for the foreseeable future.

Note: Historical market vacancy rates average 5% to 6% for both single and multifamily rentals.

Prices

The median home price in Boise, ID (metro) is $459,000. In the first quarter of 2021, the median sales price for duplexes was $495,450, $792,500 for fourplexes, and $1,430,000 for apartment buildings (defined as five or more units).

Affordability

Rents at 30% or below household income are typically considered affordable. In fact, many property management companies require a minimum 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 $66,293, equating to rents of $1,657 per month.

Multifamily Market Report - 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 monthly rents.

Apartment Projects Under Construction in 2020*

• Boise = 622 units
• Meridian = 634 units
• Eagle = 0 units
• Garden City = 29 units
• Nampa = 556 units
• Kuna = 12 units
• Star = 0 units
• Caldwell = 194 units
• Total = 2,047

* Preliminary

Building Permits Issued for Multifamily Units by County

Boise Rental Units by Structure Type

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

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 considered, 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 9,264 rental units. It 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, Community Planning Association of Southwest Idaho, and the 2021 SW Idaho Vacancy Report Q1 from the Southwest Idaho Chapter of the National Association of Residential Property Managers.