WEBVTT - Boise’s Post-Pandemic Housing Cool Down

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<v Speaker 1>It's Friday, July. I'm Oscar Ramiras from the Daily Dive

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<v Speaker 1>podcast in Los Angeles, and this is reopening America. As

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<v Speaker 1>interest rates are rising, companies are calling workers back to

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<v Speaker 1>the office, and home prices expected to fall zoom. Towns

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<v Speaker 1>that drew in remote workers during the pandemic are showing

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<v Speaker 1>signs that the housing market is cooling fast. Boise, Idaho,

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<v Speaker 1>in particular, is emblematic of this, with its housing market

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<v Speaker 1>currently overvalued. By Nicole Friedman, us housing reporter at the

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<v Speaker 1>Wall Street Journal, joins us for what to know as

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<v Speaker 1>more houses are sitting on the market longer. Thanks for

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<v Speaker 1>joining us, Nicole, Thank you for having me. Well, let's

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<v Speaker 1>talk about Boise, Idaho and the housing market that's going

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<v Speaker 1>on there. It was booming in the early part of

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<v Speaker 1>the pandemic, and now, as we're seeing in a lot

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<v Speaker 1>of other markets too, it's starting to cool down really fast.

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<v Speaker 1>But Boise was one of these places where so many

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<v Speaker 1>people were really attracted to going there. You know, the

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<v Speaker 1>prices were a little bit lower, you know, the affordability,

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<v Speaker 1>the pandemic restrict actions, they had a lot less than

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<v Speaker 1>other places. And this kind of boom in remote work,

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<v Speaker 1>these towns that had all this influx that call them

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<v Speaker 1>zoom towns really, and it was one of the the

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<v Speaker 1>the on the top of the list of a lot

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<v Speaker 1>of places. But now that everything's cooling down, mortgage rates

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<v Speaker 1>are really high, everything has kind of been turned on

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<v Speaker 1>its head. It's kind of the opposite of what we're

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<v Speaker 1>seeing during the pandemic. So Nicole, tell us what's going

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<v Speaker 1>on there. Yeah, absolutely so. Boise, as you say, was

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<v Speaker 1>kind of the poster child in some ways for the

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<v Speaker 1>pandemic driven housing boom. A lot of people they could

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<v Speaker 1>work remotely and chose to leave particularly more expensive West

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<v Speaker 1>coast cities and moved to Idaho, take advantage of the

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<v Speaker 1>cheaper cost of living, the ability to work remotely, the

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<v Speaker 1>more outdoorsy lifestyle. And for many people, they were also

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<v Speaker 1>seeking fewer pandemic restrictions, maybe less mask mandates or vaccine requirements.

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<v Speaker 1>And now we really are seeing the reverse of that

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<v Speaker 1>that a lot of the people who were driven to

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<v Speaker 1>move by the pandemic have moved, and so that in word,

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<v Speaker 1>migration has really slowed down, and we're seeing some reversal

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<v Speaker 1>as well. People are being called back to the office

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<v Speaker 1>or maybe they missed their family and friends wherever they

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<v Speaker 1>came from. Some people I'm hearing anecdotally who moved to

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<v Speaker 1>Idaho or Boise in the past few years are moving back.

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<v Speaker 1>And then at the same time, prices in Boise have

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<v Speaker 1>searched so much that housing has gotten a lot less affordable,

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<v Speaker 1>and it's really gotten out of reach for local buyers

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<v Speaker 1>who are earning local incomes. Particularly as prices have searched

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<v Speaker 1>and mortgage rates are now higher, a lot of local

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<v Speaker 1>buyers have just been priced out of the market, and

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<v Speaker 1>so the housing market and Boise has slowed really abruptly.

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<v Speaker 1>We're seeing homes sitting on the market for longer, sellers

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<v Speaker 1>cutting their prices, and that's true of a lot of

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<v Speaker 1>markets around the country. That activity has really slowed down,

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<v Speaker 1>and Boise does seem to be one of the exemplars

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<v Speaker 1>of this trend. Yeah, and a lot of places where

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<v Speaker 1>we're seeing price cuts and you know, houses just sitting

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<v Speaker 1>on the market a long time. So we got Boise, Denver,

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<v Speaker 1>Salt Lake City to come in Washington's so it's happening

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<v Speaker 1>in other parts of the country as well. And devetailing

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<v Speaker 1>off of what you were saying right now to these

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<v Speaker 1>towns also had those growing pains also, so there was

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<v Speaker 1>an influx of people, meaning more traffic, congestion, you know,

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<v Speaker 1>harder to go out to a restaurant, things like that.

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<v Speaker 1>And the locals that were being priced out of those

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<v Speaker 1>markets and all that, they're also not liking that part

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<v Speaker 1>of it. Now. There's too many people in these areas. Absolutely.

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<v Speaker 1>I've definitely talked to people who say, you know, I

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<v Speaker 1>moved to Boise for that lower pace of life, for

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<v Speaker 1>that small town steel and it no longer feels that way.

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<v Speaker 1>It has some of the big city problems that maybe

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<v Speaker 1>I moved here to escape. And Boyse definitely still is

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<v Speaker 1>a small city. You know, the metro area is less

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<v Speaker 1>than a million people, but it definitely feels bigger and

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<v Speaker 1>more congested, more crowded than it did just a few

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<v Speaker 1>years ago. And a lot of locals say they think

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<v Speaker 1>it's only going to continue to grow that maybe in

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<v Speaker 1>the next few decades that will look more like a

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<v Speaker 1>Salt Lake city, more like a Denver or Portland or again,

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<v Speaker 1>what are home builders doing right now? Because the demand

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<v Speaker 1>was so high, and throughout the whole story of the

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<v Speaker 1>pandemic and the housing market, it was always this thing

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<v Speaker 1>of high demand very low supply. So I know a

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<v Speaker 1>lot of homebuilders are trying to build big luxury homes.

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<v Speaker 1>I know they've tried to scale that back now and

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<v Speaker 1>go to some smaller designs. But what are they doing

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<v Speaker 1>now that the market is cooling down. So in the

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<v Speaker 1>past few years, homebuilders have tried really hard to ramp

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<v Speaker 1>up activity to meet demand, to build many more houses,

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<v Speaker 1>and it's been difficult for them to do so because

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<v Speaker 1>of supply chain issues and material costs got really expensive.

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<v Speaker 1>There's limited labor, especially in a smaller market like the

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<v Speaker 1>Boise area. They're just are so many only so many

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<v Speaker 1>trades people to hire, and so it's been hard for

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<v Speaker 1>homebuilders to ramp up and meet the demand. But they

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<v Speaker 1>have started construction and a lot more homes in recent years,

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<v Speaker 1>and now they're pulling back because they're seeing the demand fall.

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<v Speaker 1>Traffic is slowing down. The waitlists that they maybe had

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<v Speaker 1>last year of interested buyers have dried up because some

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<v Speaker 1>of those buyers can no longer qualify for a loan

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<v Speaker 1>at the current interest rates. And so homebuilders say they

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<v Speaker 1>to you know, start fewer homes in the coming year,

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<v Speaker 1>and they will probably scale down to maybe smaller homes,

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<v Speaker 1>more affordable homes to try to get back to those

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<v Speaker 1>local buyers at local income and what they can afford,

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<v Speaker 1>as opposed to catering to the out of state buyers

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<v Speaker 1>who might have higher budgets. You mentioned it already that

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<v Speaker 1>a lot of this in migration to Boise specifically was

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<v Speaker 1>because of this whole ship to remote work and people

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<v Speaker 1>looking for bigger places. Can they had that opportunity to

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<v Speaker 1>still keep their jobs and do that remote work. Well,

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<v Speaker 1>a lot of these companies now are really starting to

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<v Speaker 1>call people back into the office. So in some cases,

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<v Speaker 1>you know, that's why they call we're calling them zoom towns, right.

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<v Speaker 1>But in a lot of cases now these people that

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<v Speaker 1>are having to go back to work are you know,

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<v Speaker 1>having a little bit of buyers remorse. They're having to

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<v Speaker 1>sell those houses back and now they're in a completely

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<v Speaker 1>different market even just trying to recoup some of that money.

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<v Speaker 1>That's true, though, people that bought in the past few

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<v Speaker 1>years in Boise still are benefiting from a lot of

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<v Speaker 1>price appreciation and equity games. So even if their homes

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<v Speaker 1>are sitting on the market for longer, or maybe it's

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<v Speaker 1>more difficult for them to sell, they can still in

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<v Speaker 1>the current market, expect to sell for a lot more

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<v Speaker 1>than they might have paid two years ago. Well, we'll

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<v Speaker 1>keep an eye out to see what's going on there

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<v Speaker 1>in Boise. As I mentioned, this is happening in other

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<v Speaker 1>markets across the country, and really everything's starting to cool down.

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<v Speaker 1>These mortgage rates are going up higher. I think the

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<v Speaker 1>Fed raised the interest rate again, so these could possibly

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<v Speaker 1>go up higher again. It's it's all changing very quickly.

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<v Speaker 1>Nicole Friedman, us housing reporter at the Wall Street Journal,

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<v Speaker 1>thank you very much for joining us. Thank you for

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<v Speaker 1>having me. I'm Oscar Ramirez and this has been reopening America.

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<v Speaker 1>Don't forget that. For today's big news stories, you can

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<v Speaker 1>check me on in the Daily Dive podcast every Monday

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<v Speaker 1>through Friday. So follow us on I Heart Radio or

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<v Speaker 1>wherever you get your podcast.