January rental numbers are telling us to pay attention to downtown Boise

The rents in the Treasure Valley (Ada and Canyon Counties) jumped slightly in January, but homes continued to stay on the market longer for the 8th straight month. New inventory remains stable.

Here are some Treasure Valley trends from the last 8 months:

Days on market have continued to increase since June, going from 13.4, 16.3, 19.1, 22.0, 24.4, 28.3, 32.3, 41.7 days each month, respectively.
Since June, rents have averaged $2,321, $2,338, $2,288, $2,304, $2,206, $2,159, $2,153 and $2,213 through January.
Meanwhile, new inventory in November, December and January is back to the same level as June and July after a spike in August, September, and October.

A look downtown

Back in August, I took a deeper look at the 83702 zip code. This is zip code represents downtown Boise and the North End. (You can read what I wrote then by clicking here).

In January, this area caught my attention again because the rents have been trending up and nearly hitting their previous peak from July. The inventory isn’t high, but the area is really popular because of the access to restaurants, parks, walking trails, and shopping. But what I find really interesting is that despite its higher rent (it was at $1.90/sf in January and was $1.97/sf in December) it was also the lowest list to ask ratio, with a final asking price at about 90% of the listed rent.

Is this area a good investment?

Recently, the median sales price for rental type properties in this area dropped to $520,000 (closed sales from November-January). This was a big drop from July when I reported the median price was $710,000. At this price point, an investment here could be an opportunity. However, finding your next investment in this area won’t be easy. In the last 3 months only 8 homes sold. And only 4 homes are active on the MLS.

If you are considering an investment in downtown Boise or the North End, you might want to consider using an off-market strategy.