Hopefully, you found our summary of the 2021 market in Idaho Falls helpful.
In this blog, we want to talk about some of the rental trends that are sure to impact your Idaho Falls investment portfolio. We’ve focused on multifamily properties in our market report because that’s where so much of the growth is occurring.
A high-level overview is this: in our market, we’re setting a lot of growth. The demand for investment properties is also growing. That’s thanks to a shifting market and new priorities for investors.
Here’s what you need to know.
Increasing Job Growth in Idaho Falls
A steady increase in both job opportunities and population has created an ideal environment for investors in the local market. In 2020, the U.S. Bureau of Labor Statistics Idaho Falls reported that Idaho Falls experienced the country’s fastest job creation rate. Employers are moving into Idaho Falls and they’re looking for workers. Residents are earning more, feeling financially stable, and looking for high-quality rental homes.
Unemployment has declined over the last decade and the labor force has grown. This leads to a stronger tenant pool for owners renting out properties. Idaho Falls is the business center of Eastern Idaho. One of the largest local employers is the Idaho National Laboratory (INL), a research facility operated by the U.S. Department of Energy. A diverse collection of small and medium-sized national corporations also have offices here. Local employers like the school district and medical centers also contribute to a thriving economy.
The High Cost of Homeownership
Another trend is that there’s a huge desire among Idaho Falls residents to be homeowners, but the cost of entering the sales market is often prohibitive. Interest rates are still historically low and it’s a great time to buy. However, values have skyrocketed and inventory is incredibly low. As of January 2021, fewer than 50 units were available for purchase. This creates a lot of competition, and leaves a lot of people needing to rent for longer than they’d like to.
Home prices in Idaho Falls increased by 15 percent over the last year. The median home values increased 300 percent since 2000.
Increasing Rental Values in Idaho Falls
The rental market has become more competitive as well.
Average rental prices increased nearly 28 percent between 2018 and 2020. Vacancy rates remain below 3 percent, setting up rental property owners and investors for big gains in the Idaho Falls market. The higher rental prices are due to low inventory.
There’s also a trend in new construction multifamily properties that have driven up rents. These are not the same apartments from a decade ago. These rental units have amenities, comforts, and access to technology. These are things that drive up value. Good tenants are willing to pay more for things like pools, fitness centers, and community clubhouses.
Multifamily rental properties are leased quickly. Not only is there a demand that outpaces supply, there’s also a delay in new construction projects, driving a sense of urgency among tenants who are looking for homes. It may have taken a month to rent out an apartment several years ago. Now, it takes fewer than two weeks to find and place a tenant in Idaho Falls.
We’re taking a close look at the full market report that we recently published in this blog series, and we’d love to tell you more. You can download your copy here. Find out what 2021 is likely to hold for your property values and the entire rental market.