Boise Rental Vacancy Rate
Below is a graph that shows First Rate Property Management’s vacancy numbers, which include rentals in the Boise, Meridian, and Eagle areas. These numbers include all properties within our portfolio, which include single family homes, duplexes, four plexes, condos, and small apartment buildings. What I found interesting is that in 2010 vacancy spiked in October and this year that spike occurred in September. Based on the chatter I’m seeing on the property manager forums and the calls I’m getting, all local property managers are scratching their head wondering why the sudden change in the market. If you go back to my posts throughout the summer, things were moving along real well. Today, the number of inquiries has drastically slowed down. I’m not sure why, but I can only assume that most renters settled in prior to the start of the new school year.
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Boise Rental Vacancy By Building Type
In the spring, we saw a tremendous increase in demand for single-family homes. Today, these units have the highest vacancy rate. Currently we have a 6.4% vacancy on all of our single-family homes which is over double our average vacancy of 2.9%. Again, I believe this is directly related to the fact that the demand for these homes are from families with children and most did their moving in the summer. Our two bedroom properties are doing the best with a low vacancy of 1.85%. Our Studios and one bedroom apartments are at 5.33%.
Boise Rental Vacancy By Area
As normal, the Boise Bench vacancies continue to be much higher than the other areas. We have reduced our multi-family inventory in Eagle so those numbers are looking good. Our homes in Eagle are doing well as they have always done well in Eagle. As I have stated before, multi-family buildings in Eagle don’t perform as well, simply because Eagle is more of a bedroom community with very little employment and no upper level schooling. Eagle rental homes are in good demand, simply because the Eagle area is a desirable place to live. However, we for the first time in a long time, we have a spike in East Boise. The data is skewed, because we have some single family homes in that area and as explained above, that market has softened up. Also, any properties near BSU that didn’t follow our recommendations on having leases go through the school year, are now dealing with a vacancy between semesters and students have already chosen their housing.
Boise Rental Investment Sales Market
As I have described, there is a shortage of inventory, which has increased values. However interest rates dropped again on Monday, so performance still remains very good even though the buyer may pay more for the property. I think this creates a win-win scenario. Sellers who have been waiting for values to improve before selling can now get that higher price. Buyers wanting to take advantage of this market still can purchase a great performing property, even though prices are now a little bit higher. Short sales and REO numbers are down on multi-family buildings, but just last night another 4-plex was listed as a short sale at a price well below market. It surely will receive multiple offers and I imagine the actual sales price will be a good 5-10% higher than list price. This confirms that demand is up and supply is low.
Tony A. Drost
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