by Broderick Perkins
As the legend goes, when French-Canadian fur trappers of the early 1800s reached a rise overlooking a tree-studded high desert plains oasis in the shadow of the Rocky Mountains, they exclaimed, "Les bois! Les bois!" ("Woods! Woods!").
Within years, a pandemic of gold fever hit the region and Boise was born, named for the French-Canadians' spontaneous proclamation.
Two hundred years later, when a band of pioneering real estate investors selected their first-in-a-series of lesser-known real estate investment markets, they similarly bowed to the region, exclaiming "Boise! Boise!" -- but not because of the same kind of green.
Today, temperatures are rising over the psychological equivalent of gold.
Boise's real estate market is booming.
"Believe it or not, Boise is poised to be the No. 1 market for appreciation in 2006, and that has many real estate investors excited," said Lyndon Holdeman, a Boise area real estate investment specialist with Realty Executives of Treasure Valley.
Naturally infused with local bias, Holdeman may be just a little over the top with his assessment, but Boise did have enough real estate market chutzpah to get the first nod from the National Association of Residential Real Estate Investment Advisors' new service showcasing lesser known investment hot spots.
"A teleconference held by our advisors in markets that fly under the main radar, yet hold exceptional investment opportunities made a lot of sense. The strong rental conditions and prime locations for single family home investments in Boise, make Boise a logical choice" as the first pick, explains Sean Brown, the advisors' founder and CEO.
Idaho's historic capital city along the old Oregon Trail midway between Salt Lake City, UT and Portland, OR certainly has the location. At an altitude of nearly 3,000 feet, with a recreational river flowing through it, historical trappings and a contemporary economy, Boise is packing them in.
Topping the Forbes 2005 Best Place to Live list for its attractive business and career development climate, educated workforce, low cost-of-living and other factors, Boise has a real estate market enjoying the area's own economic prowess as well as move-over demand from hot pockets in Washington, Oregon, California and Nevada.
Forbes' No. 1 Best Place is also the state's largest metropolitan area and the third largest metro area in the Pacific Northwest behind Seattle, WA, and Portland, OR.
In the past year, Boise home prices rose more than 22 percent.
From the third to the fourth quarter of 2005, Boise home price appreciation jumped 7.88 percent. Among the 275 metro areas, only Naples-Marco Island, FL, with a 9.49 percent increase in home price appreciation, saw a greater gain.
"The market here in the Boise valley has changed a lot in the last three months. Homes are being sold for a premium and often times several thousand dollars more than the asking price. We have seen upwards of 30 percent appreciation in some areas in less than six months," Boise-based Mountain Valley Real Estate's Ben Peterson, reported to RealtyTimes Market Conditions report in early April.
Holdeman also cited other reasons for the area's real estate investment draw.
- High Demand-Low Supply -- Some 40 percent fewer homes were listed for sale in January 2006 compared to January 2005.
- Low Housing Costs -- Median home prices are just over $200,000 and just about equal to the national median, put at $209,000 in February, according to the National Association of Realtors.
"This is very affordable when compared to California and Las Vegas, where many new residents are moving from to enjoy Boise's clean air, mild climate, low crime, and excellent education systems," Holdeman said.
- Low Mortgage Rates -- The same mortgage rates and high-leverage home loan programs developed for higher-cost regions are available for lower-cost Boise home financing.
- Robust Economy -- The area's diverse economic infrastructure has generated a 3 percent unemployment rate, one of the lowest in the city's history. Large employers include tech giants Hewlett Packard and Micron Technology as well as Albertson's and paper giant Boise Cascade.
- Strong Rental Market -- Apartment vacancy rates remain at about 8 percent and should remain low due to the below-average unemployment rate and the area economy's high demand for workers.
And it's not just Boise.
The state's second largest city, Coeur d'Alene in the north, revealed the eighth fastest year-over-year growth in home price appreciation among the 275 metro areas -- 31.77 percent. The Logan-UT, ID region, in the state's southeast corner, ranked No. 157 with a 7.76 percent annual rate of appreciation.
Among smaller Idaho towns with fewer sales and not otherwise ranked by the OFHEO, Lewiston enjoyed a 15.55 percent annual home price appreciation, Idaho Falls, 11.6 percent and Pocatello 11.51 percent.
Statewide, Idaho ranked No. 8 among other states with an 18.64 percent rate of home price appreciation overall in the last year, compared to 12.95 percent nationwide, according to OFHEO.
"That is a phenomenal return on your investment dollars, and I expect 2006 to be another strong year with double digit appreciation gains," said Holdeman.
Published: April 7, 2006, RealtyTimes.com