JUDY WOODRUFF: Now the prospects ahead for the economy, jobs and
housing as the country grapples with the pandemic.
Let's start with the ever rising costs of housing,
what's behind it and the concerns over affordability for tens of millions.
According to the latest S&P/CoreLogic/Case-Shiller index,
nationally, home prices were up almost 17 percent
over the past year. In some markets, buyers and sellers are looking at even larger hikes.
Our economics correspondent, Paul Solman has the story for our series Making Sense.
PAUL SOLMAN: Boise, Idaho, a bustling downtown, space for walks galore, watercraft of every
description, and compared to West Coast cities not far away, safer, quieter, cheaper.
No surprise the place is booming, especially given COVID, says realtor Kevin Rush.
KEVIN RUSH, Silvercreek Realty Group: We see a lot of people moving here that can work wherever
they want to work. You know, it's like, wait a minute, I'm kind of reevaluating my life.
PAUL SOLMAN: Nationwide, home prices soared to a yet another record high in June,
thanks to historically low interest rates, lack of supply,
and the rocketing cost of new construction for builders, says Teschia Tucakovic of CBH Homes.
TESCHIA TUCAKOVIC, CBH Homes: Lumber. There's been a copper shortage. There's
been concrete difficulties. We have so many materials that are just difficult to get.
PAUL SOLMAN: Boise is a poster child for the housing price boom. In its metro area,
in the past year, the median sale price surged to $525,000, 40 percent higher than 12 months ago.
BECKY ENRICO-CRUM, Andy Enrico and Company Real Estate: We have basically been seeing offers go
$40,000, $50,000, sometimes $100,000 over the asking price, and 11 to 20 people that might
be in making offers. So we have got these bidding wars that are just unbelievable.
PAUL SOLMAN: Boise born realtor Becky Enrico-Crum has been working round the clock.
BECKY ENRICO-CRUM: We're not sleeping this year at all. And that's OK. I mean,
we can sleep when we're dead, right?
PAUL SOLMAN: The Boise market was already heating up well before the pandemic.
KEVIN RUSH: Prices have been escalating double digits for four or five years now. This isn't new
to us here. It just got accelerated and turned a little bit crazy in the last six to eight months.
PAUL SOLMAN: That's a windfall for sellers, like Wade Tracy,
who bought his house just outside town four years ago.
WADE TRACY, Homeowner: We paid about 305, maybe 310, and then we just sold it for 620.
PAUL SOLMAN: Tracy is now moving his family to far cheaper rural Ohio with his newfound capital.
WADE TRACY: We sold it for cash. They didn't want any appraisals,
no home inspections, nothing. It was as is.
PAUL SOLMAN: The buyer?
WADE TRACY: A police officer from San Francisco. He's going to do an early retirement.
PAUL SOLMAN: They're coming from all over California.
KAREN CAITLYN SMITH, Homeowner: This is the kitchen...
PAUL SOLMAN: Caitlyn Smith, a writer, moved with her husband from Encinitas, north of San Diego.
KAREN CAITLYN SMITH: We had to do an escalation clause in order to get the house.
PAUL SOLMAN: And how much did you offer?
KAREN CAITLYN SMITH: We offered about $20,000 over.
PAUL SOLMAN: And got their house for $394,000. If it were in Encinitas?
KAREN CAITLYN SMITH: It would probably be a million-dollar home.
PAUL SOLMAN: Smith can work at home in her new neighborhood.
KAREN CAITLYN SMITH: This is my office.
PAUL SOLMAN: Because her company went fully remote at the start of the year.
KAREN CAITLYN SMITH: You don't need to be in the big city anymore. And I think a lot of
people really realize, like, mental health and quality of life are more important during COVID,
and wanting to land somewhere that's just a little slower, a little quieter.
PAUL SOLMAN: Casey and Justin Kilian relocated from Seattle.
CASEY KILIAN, Homeowner: We sold our home in Seattle, which was 1, 200 square feet,
and we were able to purchase a home here in Boise for the same amount of money and basically
double or triple the amount square footage we got.
PAUL SOLMAN: The Kilians now work from home, pay less for day care.
But to get into this market, they had to be strategic.
CASEY KILIAN: We realized quickly that houses were going within a day. And if you had any
contingencies whatsoever, so the contingency of selling your home, you were not competitive.
So we had to first sell our home in Seattle before we could even compete in this market.
JUSTIN KILIAN, Homeowner: Yes, we were classic millennials crashing on my mom's couch
for about three months.
(LAUGHTER) PAUL SOLMAN: Justin's from Boise,
but left for the coast after college. It's become an a much more cosmopolitan city since.
JUSTIN KILIAN: Boise back in the late '80s, early '90s, when I grew up here,
and comparing that to now, there's a lot more going on.
CASEY KILIAN: The influx of people are bringing -- it's making Boise more exciting.
Five years ago, I would not have moved here.
PAUL SOLMAN: But to some in this conservative state, the urban influx can seem like an invasion.
MATT BAKER, Dennis M. Baker Associates: It's definitely causing heartburn
across the valley for the locals.
PAUL SOLMAN: Matt Baker developed the housing in this area.
MATT BAKER: If you're coming in from California, you're going and getting
those license plates changed to Idaho as quick as you can. That is a fact.
PAUL SOLMAN: John Cobbinah moved here from Sacramento.
Did you change your license plates right
away because you didn't want to be known from California?
(LAUGHTER)
JOHN COBBINAH, Homeowner: We haven't.
PAUL SOLMAN: Cobbinah, originally from Ghana, and his wife, Pamela Sue,
came here to escape Sacramento's rising homelessness, they say, and its blue politics.
But the license plates?
JOHN COBBINAH: We were driving, house-hunting. Somebody held a sign,
"Go back to California." And so we come and we park in the garage,
so nobody sees the license plate. So we decided to change them. We will change them.
PAUL SOLMAN: Much of the resentment is economic.
With wages nowhere near keeping up with home prices, locals are just out of the bidding.
BECKY ENRICO-CRUM: Our first time homebuyers that we have always been able to put into homes
that qualify for a loan that just came out of college that have a really nice job, but they
don't have an extra $40,000 or $50,000 extra to win a bidding war, those people are priced out.
PAUL SOLMAN: Like Boise plumber Ryan Kencke, who makes $50,000 a year,
has saved up, and has a strong credit score. He and his girlfriend looked for months.
RYAN KENCKE, Renter: We got a loan for $300,000. And
everything that was priced underneath $300,000 just immediately had offers, some cash,
that were way over. This is the new normal for house-hunting.
PAUL SOLMAN: Not getting the house.
RYAN KENCKE: Not getting the house.
PAUL SOLMAN: So, Kencke is renting instead.
But for disabled Vietnam vet Gary Wiltermood, even renting is next to impossible. He's lived
in a house at the edge of a Boise trailer park for 15 years. The owners want him out.
GARY WILTERMOOD, Renter: They have tried every maneuver to get me out of there.
They can put in like four or five apartment places in the property I'm on.
PAUL SOLMAN: But other Boise rentals are out of reach.
GARY WILTERMOOD: I'm priced out of the market. I can't find a place.
I'm so desperate, I don't know what to do.
PAUL SOLMAN: As Wiltermood's lawyer, Brian Stephens, puts it:
BRIAN STEPHENS, Attorney for Gary Wiltermood: If you're a low-income
person, it's a very hard time to be in Boise.
PAUL SOLMAN: There are signs of cooling off in recent weeks. Inventory is up and
developers are scrambling to build more. But, as always happens while cities grow,
neighborhoods gentrify, there will be heartrending losers like Gary Wiltermood.
GARY WILTERMOOD: There's a statement, some gave all, some still give on my Vietnam sticker.
Well, I gave my life for this country, and this is how I end up.
PAUL SOLMAN:
Ryan Kencke isn't desperate, but he does hope Boise real estate prices return to earth.
Are you rooting for the Californians, the Seattle folks to
say, wait a sec, this isn't what we bargained for?
(LAUGHTER)
RYAN KENCKE: I would be lying if I said there wasn't a part of me that
didn't hope that something would change like that to be able to allow me to get a home.
But everyone's doing what's best for them. If they can make another state's
wages and live way more comfortably here, got to do what's best for you.
PAUL SOLMAN: For the "PBS NewsHour," this is Paul Solman in beckoning Boise, Idaho.