Boise Rental Market & Vacancy Rates
The average rent in Boise, ID is $1,422 per month. Boise rents have increased 8.6% over the past year and 26.3% over the past three years. The vacancy rate for all rental properties in Boise is 2.22%, down from 3.21% one year ago.
Average Rents in Boise
In Boise, the average rental price for all property types in the third quarter of 2019 is $1,422. Rents rose 8.63 percent, or $133 from the year prior. While down from the record high we saw last quarter, rents are still the seconded highest on record.
On a per month basis, the average house rent in Boise is $1,520. That is an increase of $106 (7.5 percent) over the previous year. Single-family rents rose $26 (1.74 percent) from last quarter and are now just below the all-time highs we saw in the first half of 2018.
Two bedroom house rents jumped to a record-setting price of $1,242, up $122 (10.89 percent), while properties with three bedrooms finished the quarter just below previous highs.
The average apartment rent in Boise is $1,040, a decline of 3.62 percent from the record high set just last quarter. Multifamily rents increased $26 (2.56 percent) from 12 months ago.
Boise two and three-bedroom multifamily units increased in price by $77 and $13 per month, respectively. One-bedroom rentals declined $23 to $820.
Boise Rental Vacancy Rates
Boise rental market vacancy rates fell sharply to finish the third quarter of 2019 near five-year lows. The average vacancy rate for all property types declined to 1.53 percent from 2.32 percent twelve months ago.
Single-family vacancies decreased to 2.22 percent from 3.21 percent, the lowest level since the beginning of 2015.
Multifamily investment property vacancies also saw a sizable decrease to 1.22 percent from 1.85 percent the year prior. While apartment vacancies tend to be seasonally low this time of year, this is only the second time since 2014 that vacancies have dropped below 2 percent.
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.
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 rental rates 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 completely reversed itself. For 2018 as a whole, vacancies declined to 2.38 percent, down from 3.35 percent the year prior. Even that was lower than the 5 percent rate we saw at the beginning of 2017.
Single-family rents remain near all-time highs. Despite the average rent increasing 8.6% over the last twelve months, the strong price appreciation in the purchase market continues to keep renting attractive by comparison.
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% for both single and multifamily rentals.
The median home price in Boise, ID metro area (Ada County) is $352,000. In the third quarter of 2019, the median sales price for duplexes was $335,000, $587,500 for fourplexes, and $965,000 for apartment buildings (5+ units).
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.
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
** 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
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*Select data obtained from the Intermountain MLS, Valbridge/Mountain States Appraisal, and the 2019 SW Idaho Vacancy Report Q3 from the Southwest Idaho Chapter of the National Association of Residential Property Managers.