Speaker 1: It's Friday, July. I'm Oscar Ramiras from the Daily Dive
Speaker 1: podcast in Los Angeles, and this is reopening America. As
Speaker 1: interest rates are rising, companies are calling workers back to
Speaker 1: the office, and home prices expected to fall zoom. Towns
Speaker 1: that drew in remote workers during the pandemic are showing
Speaker 1: signs that the housing market is cooling fast. Boise, Idaho,
Speaker 1: in particular, is emblematic of this, with its housing market
Speaker 1: currently overvalued. By Nicole Friedman, us housing reporter at the
Speaker 1: Wall Street Journal, joins us for what to know as
Speaker 1: more houses are sitting on the market longer. Thanks for
Speaker 1: joining us, Nicole, Thank you for having me. Well, let's
Speaker 1: talk about Boise, Idaho and the housing market that's going
Speaker 1: on there. It was booming in the early part of
Speaker 1: the pandemic, and now, as we're seeing in a lot
Speaker 1: of other markets too, it's starting to cool down really fast.
Speaker 1: But Boise was one of these places where so many
Speaker 1: people were really attracted to going there. You know, the
Speaker 1: prices were a little bit lower, you know, the affordability,
Speaker 1: the pandemic restrict actions, they had a lot less than
Speaker 1: other places. And this kind of boom in remote work,
Speaker 1: these towns that had all this influx that call them
Speaker 1: zoom towns really, and it was one of the the
Speaker 1: the on the top of the list of a lot
Speaker 1: of places. But now that everything's cooling down, mortgage rates
Speaker 1: are really high, everything has kind of been turned on
Speaker 1: its head. It's kind of the opposite of what we're
Speaker 1: seeing during the pandemic. So Nicole, tell us what's going
Speaker 1: on there. Yeah, absolutely so. Boise, as you say, was
Speaker 1: kind of the poster child in some ways for the
Speaker 1: pandemic driven housing boom. A lot of people they could
Speaker 1: work remotely and chose to leave particularly more expensive West
Speaker 1: coast cities and moved to Idaho, take advantage of the
Speaker 1: cheaper cost of living, the ability to work remotely, the
Speaker 1: more outdoorsy lifestyle. And for many people, they were also
Speaker 1: seeking fewer pandemic restrictions, maybe less mask mandates or vaccine requirements.
Speaker 1: And now we really are seeing the reverse of that
Speaker 1: that a lot of the people who were driven to
Speaker 1: move by the pandemic have moved, and so that in word,
Speaker 1: migration has really slowed down, and we're seeing some reversal
Speaker 1: as well. People are being called back to the office
Speaker 1: or maybe they missed their family and friends wherever they
Speaker 1: came from. Some people I'm hearing anecdotally who moved to
Speaker 1: Idaho or Boise in the past few years are moving back.
Speaker 1: And then at the same time, prices in Boise have
Speaker 1: searched so much that housing has gotten a lot less affordable,
Speaker 1: and it's really gotten out of reach for local buyers
Speaker 1: who are earning local incomes. Particularly as prices have searched
Speaker 1: and mortgage rates are now higher, a lot of local
Speaker 1: buyers have just been priced out of the market, and
Speaker 1: so the housing market and Boise has slowed really abruptly.
Speaker 1: We're seeing homes sitting on the market for longer, sellers
Speaker 1: cutting their prices, and that's true of a lot of
Speaker 1: markets around the country. That activity has really slowed down,
Speaker 1: and Boise does seem to be one of the exemplars
Speaker 1: of this trend. Yeah, and a lot of places where
Speaker 1: we're seeing price cuts and you know, houses just sitting
Speaker 1: on the market a long time. So we got Boise, Denver,
Speaker 1: Salt Lake City to come in Washington's so it's happening
Speaker 1: in other parts of the country as well. And devetailing
Speaker 1: off of what you were saying right now to these
Speaker 1: towns also had those growing pains also, so there was
Speaker 1: an influx of people, meaning more traffic, congestion, you know,
Speaker 1: harder to go out to a restaurant, things like that.
Speaker 1: And the locals that were being priced out of those
Speaker 1: markets and all that, they're also not liking that part
Speaker 1: of it. Now. There's too many people in these areas. Absolutely.
Speaker 1: I've definitely talked to people who say, you know, I
Speaker 1: moved to Boise for that lower pace of life, for
Speaker 1: that small town steel and it no longer feels that way.
Speaker 1: It has some of the big city problems that maybe
Speaker 1: I moved here to escape. And Boyse definitely still is
Speaker 1: a small city. You know, the metro area is less
Speaker 1: than a million people, but it definitely feels bigger and
Speaker 1: more congested, more crowded than it did just a few
Speaker 1: years ago. And a lot of locals say they think
Speaker 1: it's only going to continue to grow that maybe in
Speaker 1: the next few decades that will look more like a
Speaker 1: Salt Lake city, more like a Denver or Portland or again,
Speaker 1: what are home builders doing right now? Because the demand
Speaker 1: was so high, and throughout the whole story of the
Speaker 1: pandemic and the housing market, it was always this thing
Speaker 1: of high demand very low supply. So I know a
Speaker 1: lot of homebuilders are trying to build big luxury homes.
Speaker 1: I know they've tried to scale that back now and
Speaker 1: go to some smaller designs. But what are they doing
Speaker 1: now that the market is cooling down. So in the
Speaker 1: past few years, homebuilders have tried really hard to ramp
Speaker 1: up activity to meet demand, to build many more houses,
Speaker 1: and it's been difficult for them to do so because
Speaker 1: of supply chain issues and material costs got really expensive.
Speaker 1: There's limited labor, especially in a smaller market like the
Speaker 1: Boise area. They're just are so many only so many
Speaker 1: trades people to hire, and so it's been hard for
Speaker 1: homebuilders to ramp up and meet the demand. But they
Speaker 1: have started construction and a lot more homes in recent years,
Speaker 1: and now they're pulling back because they're seeing the demand fall.
Speaker 1: Traffic is slowing down. The waitlists that they maybe had
Speaker 1: last year of interested buyers have dried up because some
Speaker 1: of those buyers can no longer qualify for a loan
Speaker 1: at the current interest rates. And so homebuilders say they
Speaker 1: to you know, start fewer homes in the coming year,
Speaker 1: and they will probably scale down to maybe smaller homes,
Speaker 1: more affordable homes to try to get back to those
Speaker 1: local buyers at local income and what they can afford,
Speaker 1: as opposed to catering to the out of state buyers
Speaker 1: who might have higher budgets. You mentioned it already that
Speaker 1: a lot of this in migration to Boise specifically was
Speaker 1: because of this whole ship to remote work and people
Speaker 1: looking for bigger places. Can they had that opportunity to
Speaker 1: still keep their jobs and do that remote work. Well,
Speaker 1: a lot of these companies now are really starting to
Speaker 1: call people back into the office. So in some cases,
Speaker 1: you know, that's why they call we're calling them zoom towns, right.
Speaker 1: But in a lot of cases now these people that
Speaker 1: are having to go back to work are you know,
Speaker 1: having a little bit of buyers remorse. They're having to
Speaker 1: sell those houses back and now they're in a completely
Speaker 1: different market even just trying to recoup some of that money.
Speaker 1: That's true, though, people that bought in the past few
Speaker 1: years in Boise still are benefiting from a lot of
Speaker 1: price appreciation and equity games. So even if their homes
Speaker 1: are sitting on the market for longer, or maybe it's
Speaker 1: more difficult for them to sell, they can still in
Speaker 1: the current market, expect to sell for a lot more
Speaker 1: than they might have paid two years ago. Well, we'll
Speaker 1: keep an eye out to see what's going on there
Speaker 1: in Boise. As I mentioned, this is happening in other
Speaker 1: markets across the country, and really everything's starting to cool down.
Speaker 1: These mortgage rates are going up higher. I think the
Speaker 1: Fed raised the interest rate again, so these could possibly
Speaker 1: go up higher again. It's it's all changing very quickly.
Speaker 1: Nicole Friedman, us housing reporter at the Wall Street Journal,
Speaker 1: thank you very much for joining us. Thank you for
Speaker 1: having me. I'm Oscar Ramirez and this has been reopening America.
Speaker 1: Don't forget that. For today's big news stories, you can
Speaker 1: check me on in the Daily Dive podcast every Monday
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