Homebuyers Squeezed as Western States See Prices Double Or More In Last Decade Kirk Siegler May 28, 2021 STEVE INSKEEP, HOST: It's a good time to be selling real estate in Boise, Idaho. It is now one of the hardest markets in the country to buy in or even rent in. According to new figures from Zillow, home values in Boise have gone up 32% in a year, which is part of a trend in the Mountain West. Here's NPR's Kirk Siegler. KIRK SIEGLER, BYLINE: This time last year, Marissa Lovell's landlord offered to sell her current rental house in Boise for $256,000. It was the lockdown, and she and her fianc are first-time homebuyers - Lovell's a writer and publicist; he's an arborist - so it took them until July to get their loan secured. By then, the price had risen to $300,000. Today, it's for sale for almost $400,000. MARISSA LOVELL: And this is a 730-square-foot home - two-bedroom, one bath, no laundry, no place to put laundry, no dishwasher. It's like a tiny home (laughter). It's like the original tiny home. SIEGLER: Lovell loves the neighborhood, though. You can ride your bike downtown to a show. There are cool bars and restaurants. But... LOVELL: In the last 30 days, according to Zillow, our house has gone up $15,000. Like, it's just - you can't keep up with it. SIEGLER: Now, she's still half-looking around in Boise, but every time she goes to a showing, there are at least 30 other people, and her realtor tells her they'll need to offer at least 20 grand over. Oh, and do that in 24 hours for a house you don't even really like. LOVELL: There's kind of just, like, a feeling of, like, panic-buying almost, which I don't want to do. So... SIEGLER: Will it just get worse, or should she ride things out and wait for a crash? That's a question real estate economists, like Vivek Sah at the University of Nevada, Las Vegas, are getting a lot right now. VIVEK SAH: The boom is sustainable. The growth in price is not.

SIEGLER: He says as the pandemic eases, so will some of the supply chain troubles, like lumber and labor shortages, and that should make the housing market less tight. SAH: This whole bubble thing will kind of slow down to become a more normal market where prices increase probably between five to 10%. SIEGLER: As for a housing crash, though, Sah sees a big difference between this boom and 2008, when it was mostly speculators and home-flippers. Now, there is some of that today. But he says mostly people moving into Nevada, Arizona, Idaho have jobs and are living in these homes. It's an almost cliche headline in the West right now - pandemic buyers fleeing West Coast cities for the roomy interior. And if this trend sticks, University of California, Irvine economist Ed Coulson doesn't expect much of a correction in the housing market in the next year. ED COULSON: It's going to be interesting to see whether or not the change in preferences that we seemed to observe during the pandemic are permanent changes. SIEGLER: Does the guy who left Southern California for the rural north last through another Montana winter? Or, Coulson says, do major employers begin restricting work-from-home rules and call everyone back to their downtown offices? Regardless, he says the housing market in Boise, with all of its amenities, will probably stay hot, just like we saw in cities like Denver even during the 2008 meltdown. LOVELL: Our neighborhood's pretty awesome, too. Like... SIEGLER: So what's Marissa Lovell to do? Well, she's stuck for now in her tiny rental, hoping her landlord doesn't sell it. Lovell moved to Boise 10 years ago when the housing market was at rock bottom. Since the recovery, median income has gone up here by more than 20%, but the median housing price, more than 250%. LOVELL: And it used to be, like, really affordable with housing. SIEGLER: Now, she says, everything that drew people like her here - the cheap living, the creative economy, the city's success - is in jeopardy if housing is so far out of reach. Kirk Siegler, NPR News, Boise

discuss the following:

1. Analyze the situation occurring.
2. Which economic concepts are at play here?
3. Apply economic theories and models to support your response.