Rental Market Update
This is a market update provided for people interested in residential and multifamily market conditions in Idaho Falls and Eastern Idaho market. Each section of the article includes the latest market data, finishing with key takeaways and possible market limitations.
· Average vacancy in 2016 was 7%
· Rent from 2014 to 2015 increased 2%
· Rent from 2015 to 2016 increased 8%
Idaho Falls Market
· Average vacancy in 2016 was 5-6%
· Average rent increases in 2016 was 7%. One bedrooms were up 2.1% and 2 bedrooms were up 9.2%*
· Median home values are up 9.1% in last 12 months
· Rent Increase 2.1%
Idaho Falls Projections
· Home Values will increase 5.8%
· Rents will increase 7%**
Multifamily Construction Projects:
Kartchner Homes just completed The Falls Apartments (220 units) in Snake River Landing (currently 82% occupied, and projecting 95% occupancy by the end of May). They have broken ground on another apartment community on 1st Street in Ammon.
Big Sky, LLC is to complete construction on St Clair behind BigLots before the end of the year. This is a one and two bedroom single level neighborhood with a distinctive boutique feel. The same group out of Billings is scheduled to begin construction on 106 units off of Sunnyside.
Freedom Partners out of Wyoming has built the townhouses behind Smiths and across from Bonneville High School is scheduled to begin construction on more townhouses south of Skyline High School. They will be adding a garage to at least some of these units.
There are a handful of other smaller projects in the works. Forty units off Broadway and another 35 off of 1st St. These are all townhouse style with no garage.
Jake's 2 Cents:
New laws require sprinklers in all "up and down" style fourplex buildings. All new construction has to be townhouse or community style in order to either avoid sprinklers or justify the expense.
Idaho Falls is offering better product – better finishes, square footage, and overall investments that will have higher long term returns (with good management).
We’ve all been talking about Millennials and the desire for amenities and flexibility afforded by renting. Nevertheless, local absorption rates are really impressive. It shows Idaho Falls is becoming a more typical national market than it has historically.
Idaho Falls has built a large number of new units over the last couple years. They are all filling quickly. Rental rates are increasing. With so many options to choose from, renewal programs have never been more important to reducing turnover in a competitive rental market.
Limitations: Because East Idaho is a small market there is not a lot of research available. Local data is supplied by census and Zillow.
Zillow gets its data from people listing on their site, so if the properties are not listing on Zillow, data is missing. This reduces reliability and exaggerate the price increases coming from the addition of more higher quality, more expensive product.
Will a typical 2 bedroom fourplex built in 2005 see a 9% market increase in the last 12 months the same as a 1000 ft two bedroom townhouse built in 2016?