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The Boise multifamily market showed strong performance in the second quarter of 2024, marked by rising occupancy rates and positive net absorption.
Here's a look at the key trends shaping the market:
Occupancy and Demand
The overall occupancy rate in Boise increased to 94.3%, marking the second consecutive quarter of gains. Demand for multifamily units outpaced supply for the second straight quarter, with 974 units absorbed in Q2. This strong demand is fueled by Boise's growing population and a robust local economy, which continue to drive interest in multifamily housing.
Rental Rates
After a period of stabilization, the average effective monthly rent saw an increase, reaching $1,575 in Q2 2024. This is the first quarter-over-quarter rent increase since Q3 2022, signaling a rebound in rental demand. The rise in average rents reflects both the healthy demand for apartments and the limited new supply coming online.
Construction and New Supply
The volume of new multifamily construction is beginning to moderate, with 4,742 units under construction—the lowest level since Q1 2022. In Q2 2024, 782 units were delivered, bringing the year-to-date total to 1,407 units. This represents a decline in construction activity compared to previous years, indicating a shift towards stabilizing the supply-demand balance.
Market Dynamics
The Nampa/Meridian/Caldwell submarket led in new construction activity, delivering 470 units in Q2, while the Boise submarket delivered 312 units. Both submarkets are seeing strong absorption, which is helping to maintain healthy occupancy levels. The demand for multifamily space in the Treasure Valley is expected to remain robust, driven by continued population growth and rising home prices that make renting a more attractive option.
Economic Drivers
Boise’s economy continues to be a key factor in supporting the multifamily market. Job growth remains strong, with a 2.8% year-over-year increase, and the city’s population is projected to grow by 2.1% in 2024. This economic and population growth supports the ongoing demand for rental housing, making Boise a favorable market for multifamily investors.
Outlook
Looking ahead, the Boise multifamily market is poised for continued growth. With strong absorption, rising rents, and a pipeline of new projects approaching completion, the market is well-positioned to meet the needs of its expanding population. While new supply levels are moderating, the demand fundamentals remain solid, suggesting a stable outlook for the remainder of the year.
In summary, the Boise multifamily market's performance in Q2 2024 reflects a healthy balance of demand and supply, with positive indicators for continued growth. Investors and developers can expect ongoing opportunities as Boise's population and economy continue to expand.
For a detailed analysis, refer to the full C&W’s report by clicking on the button below:
