Idaho Falls ranked among nation's most overvalued housing markets

“Affordability has reached a critical level already,” said Patrick Malone, president of Idaho Realtors and real estate agent with Century 21. “There are no affordable houses in Idaho.”

According to realtor.com, the median listing home price in Idaho Falls was $375,000 in December, trending up 36.4% year-over-year. In 2015, the median price in Bonneville County was $150,000, according to the Snake River Regional MLS website.

Many prospective homeowners right now are often forced to consider houses that are beyond their budget and at a lesser value than what they are looking for, Malone said. He recalled a recent interested buyer looking for a three-bedroom, two-bathroom property around $170,000. The closest Malone could find for this person were two-bedroom, one-bathroom properties around $225,000 to $240,000 that needed “substantial work.”

“I have a 23-year-old son and I really worry about kids his age that just graduated or are just getting married and starting families. Where are they going to live?” Malone said.

The biggest factor for the Idaho housing market increasing in price at a rapid pace is supply and demand, Malone said. Idaho has been the fastest growing state in population for the last half decade, according to the U.S. Census Bureau. In 2021, 53,151 new residents were counted in the state and 48,876 of them came from other states.

Many of Idaho’s new residents coming from other states are fleeing more expensive housing markets. The Fitch Ratings data was cited by an Axios article on Jan. 25, which attributed most homes bought in Idaho are from newcomers with soaring wealth coming to the state.

An April 2021 report from CRBE, a commercial real estate firm, found the number of people moving to Idaho from out of state grew by 21% in 2020 — the fifth-highest increase nationwide. Most people moved to the Boise metropolitan area from Washington and California.

Bonneville County’s population is estimated to be near 125,000, about 20,000 more than in 2010. On Wednesday, Malone said there were 64 active houses in the Idaho Falls market. Since the 2008 stock market crash, homes have not been built fast enough to keep up with Idaho’s growing population, and this is compounded even further by labor shortages, supply chain issues and a global pandemic, he said.

“We were already on this trajectory and having these issues two years ago but COVID just exasperated it,” Malone said.

The 64 active listings is historically low. According to the Post Register’s archives, in January 2017 there were 267 homes listed in Idaho Falls market. Malone said there were about 700 to 800 homes listed in the market at this time in 2015.

“When a buyer that’s shopping roughly has six months of inventory to shop from, that’s considered a balanced market,” Malone said. “Right now, we’re counting inventory in days — not in months.”

Making the housing market more affordable is no easy task and not something Malone sees happening anytime soon, he said. There are some steps that can be taken to get there, including resolving construction issues with supplies and cities allowing higher density buildings to give first-time homeowners smaller and more affordable options.

During Mayor Rebecca Caper’s state of the city speech on Jan. 13, Casper acknowledged the increased need for housing in Idaho Falls.

Casper said during the speech construction plans are in place to add new housing units, which will help ease rising housing costs during the spring.

The Post Register reported Thursday that a consultant hired by the Idaho Falls City Council estimates the city should expect to see about 9,000 new residents and 3,500 new housing units built over the next 10 years.