According to the Idaho Department of Labor, wages in Blaine County are 2% higher than the rest of Idaho. Housing prices, however, are 57% higher than the rest of Idaho. The answer is attributable to several factors:
First, there is a limited supply of affordable housing for middle class working families. During the 15 years leading up to the Great Recession the county’s population grew significantly.
Much of the growth was from working class families, thus creating a strong demand for moderately priced housing. Very little was developed. Developers have a preference for building larger more expensive homes because profit expectations are greater.
Second, prior to 2008, a large influx of second home buyers purchased or built larger homes which limited the development of moderately prices homes and tended to inflate all home prices in the marketplace. During the Great Recession the county’s population decreased by almost 10% or 2,000 people. This decline in population caused a temporary decline in housing prices as the supply of homes momentarily exceeded demand. During this period the affordability gap declined significantly. In Bellevue it briefly went to zero. Since 2013, however, prices have increased again as the excess supply has been absorbed.
Third, land costs were driven sky high by rampant speculation prior to the Great Recession– in some cases, to over $1 million per acre. In many instances, this land was held by owners who did not need to sell. Therefore, when the market dropped, the land values did not – land simply went unsold.
Lastly, the cost of building in Blaine County is high because additional measures must be taken, such as, protect against snow loads, avalanche zone requirements, subzero temperatures, radon mitigation and transportation costs to deliver materials to this area.
