Boise, the largest of two metropolitan areas in Idaho, is the State capital as well as a regional shopping and medical service center for southwest Idaho and northeast Oregon. During the 1990s, Boise also became one of the Northwest’s major high-technology employment centers; in a survey by the American Electronics Association, the city ranked second among small cities in high-technology growth between 1993 and 1998. The area’s strong labor market as well as quality-of-life factors such as clean air, minimal traffic congestion, low crime rates, and proximity to the Rocky Mountains resulted in dramatic population growth during the 1990s; during this 10-year period, Boise ranked seventh highest in population growth among all metropolitan areas in the Nation. At the time of the 2000 census, the population was 432,345, a 46.1-percent increase from 1990. The average annual rate of population growth and household growth over the period was 3.9 percent.

Nonagricultural employment in the Boise metropolitan area averaged 231,200 workers for the 12 months ending in March 2002, up 3.3 percent compared with a year ago, according to data released by the Idaho Department of Employment. Job growth was confined primarily to the service-producing sector, where health services, professional services, and finance, insurance, and real estate accounted for nearly 80 percent of local job creation. The national manufacturing recession sent employment in Boise’s manufacturing sector into a downturn starting at midyear 2001, with the industrial machinery and electrical equipment industries suffering the greatest losses. The Idaho State economist’s most recent forecast calls for employment losses in the manufacturing sector to continue through the second quarter of 2002. Following job losses in both manufacturing and trade, the unemployment rate rose from 3.2 percent to 4.3 percent from March 2001 to March 2002.

Low interest rates and steady population growth continued to spur sales of existing and newly constructed homes in the Boise metro area. According to the Ada County Association of REALTORS®, 1,909 homes were sold during the first 3 months of 2002, up 2.4 percent compared with a year ago. The median sales price was $124,600, up 3.9 percent for the year. New home sales totaled 748 through March 2002, unchanged from the same period a year ago. The median sales price of a new home in the Boise metropolitan area was $136,000, up 4 percent compared with the first 3 months of 2001. Approximately 30 percent of all homes sold were priced at or below $100,000, whereas only 12 percent were offered at prices above $200,000. The inventory of unsold homes in March was equal to a 5.5-month supply, up from a 4-month supply in March 2001.

In response to weakening economic conditions, single-family permit activity for 2001 slowed to 5,006 units, just 11 units short of the total for 2000 but 6.2 percent below the record number of permits issued in 1999. Through March 2002, 1,117 permits were issued for single-family construction, off 9.3 percent compared with the same period in 2001.

Weakening labor market conditions, low interest rates, and the dramatic increase in apartment construction activity have created a soft rental market in the Boise area. At the time of the 2000 census, the Ada County rental vacancy rate was 5.1 percent. Recent surveys of the rental apartment market by Ada Real Estate show the vacancy rate for Ada County increasing from 2.7 percent in January 2001 to 9.2 percent in January 2002. For one-bedroom units the vacancy rate was 7.3 percent compared with 1.9 percent a year ago. The two-bedroom vacancy rate was 10.2 percent, and the threebedroom rate stood at 10.4 percent, up dramatically from a year ago, when each bedroom size had a vacancy rate in the 3-percent range.

Multifamily building permit activity during 2001 totaled 1,099 units compared with 512 units in 2000 and 784 in 1999. Through March 2002, 166 multifamily units were authorized for construction compared with 501 units for the same period in 2001. As of March 2002, there were 945 apartments under construction, and 355 units were completed during the fourth quarter of 2001. Owing to both the large number of vacant units in the existing rental stock and the surge in the number of apartments recently completed and under construction, the vacancy rate is expected to remain in the 9- to 10-percent range for the next 12 months.