Analysis: Study says Boise housing is overvalued. Local real estate experts push back. What’s happening?



Last week, Fortune Magazine posted a story with an intriguing headline:

“These are the most overvalued housing markets in the US.”

The photo on the story, of course, shows the Boise skyline.

According to a study from Florida Atlantic University and Florida International University, the Boise housing market is the most overvalued in the country – with homes in the area selling 80% above past values.

The study itself ranked the top 100 largest metro areas in the US. The complicated formula used data from the Zillow Home Value Index to look at the current prices of houses as compared to the past 25 years.

As you know, home prices in the Boise area rose very quickly in the past several years, and accelerated in the wake of the COVID-19 pandemic.

‘The word overvalued was misued’

Tracy Kasper, a local real estate broker who will take the president title for the National Association of Realtors in 2024, cast doubt on the study.

“I think the word overvalued was misused entirely,” Kasper said.

The study, with a figure that caught fire on social media locally, says “homes are selling for 80.64 percent more than they should, based on a history of past pricing.” Kasper thinks that sets forth an idea that the Boise housing market might suddenly crash or lose 80% of its value.

“What was unfortunate about that verbiage is that it (implies) it’s going to come crashing down. It’s not.”

She points to the differences between the current market and the local housing market in the 2005-2007 timeframe before the Great Recession impacted the US.

“The difference then was it was all speculative – from building to lending. We were giving out loans at 125% of loan-to-value. All of that speculative lending went away through the downturn. Lending has tightened up, which is good.”

She said the difference in the current hot market is a simpler economic concept.

“This market is all driven by supply and demand. Completely.”

Here a study, there a study

The folks at FAU & FIU built a model based on a number of assumptions, which they are transparent about. In recent years, a wide array of groups have turned to the creation of rankings to help build buzz and attention. We actually wrote about this in 2019:

Many websites are trying to generate rankings to attract news coverage. Just about every day in my inbox, I have an email from a credit card offer website touting some list. This summer they trumpeted Boise being the 8th best city in the country for renters.Really?

The practice doesn’t mean that the data is wrong – or even misleading. But in this case, it applies a ‘one size fits all’ lens over each real estate market in the US. It also assigns a word – overvalued – which can lead to a simple understanding that something overvalued might someday drop in price to become more ‘normal’.

The housing market in the Treasure Valley showed some signs of slowing from its blistering pace, as we wrote about earlier this month.

Home prices appreciated rapidly in recent years – both across the country and particularly in the Boise metro. A mathematical formula that looks at the current value over a 25-year history will for sure rise Boise to at or near the top of the list. The concept of “overvalue” might be relative.

Rent, or buy?

The survey’s co-author makes a curious suggestion in a news release.

“In the Top 10 markets, potential buyers might want to consider renting and reinvesting money that they otherwise would have put into homeownership,” Dr. Ken H. Johnson said. “Renting and reinvesting has been shown to often outperform ownership in terms of wealth creation.”

While Johnson is speaking generally about all top ten cities and not just about Boise, the reality ignores the fact that rent rates in Boise are rising faster than anywhere in the country (and number two isn’t even close). As we’ve chronicled, some renters are dealing with rapidly rising rates that are pricing them out.

While every person has a different set of circumstances and need – the FAU study says folks should skip buying and rent instead. It assumes that the housing market might go down. While it very well could, there aren’t a lot of indicators that show that’s likely. In-migration to the Boise Valley continues. Work from home or remote work trends continue to build. Inventory of available homes – while improving, remains low.

Folks in the local real estate industry have a built-in alignment towards consumers having confidence in a home purchase. The old cliche “there’s never been a better time to buy a home” nets 13 billion results on Google for a reason. But the FAU/FIU study and resulting Fortune story put forth an impression that’s misleading based on the complicated situation in our market.

Don Day - BoiseDev Editor & Founder
Don is the founder and publisher of BoiseDev. He is a National Edward R. Murrow Award winner and a Stanford University John S. Knight Fellow. Contact him at

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