OFI 942: The World Is Changing And You Had Better Notice

Off-Farm Income

If you are reading this you probably already know that our farm is in the Treasure Valley of Idaho, very near the capital city of Boise. Our area is one of the areas in the United States that is experiencing rapid growth due to mass exodus from California and states with similar political climates and circumstances. I believe that what I am seeing locally gives me a unique insight into how things are changing nationally, particularly from the standpoint of buying farm ground and making a living in rural areas. The following is my insight on this. I first came to the Boise, Idaho area in 1994 when I got an internship selling Ag chemicals for Zeneca Ag Products. The Treasure Valley of Idaho was booming back then and I can still remember my boss telling me that the rise in housing prices was unsustainable because we didn’t have the jobs here to support those prices. He believed that a lot of the homes that were being purchased were being bought by people who had come for construction jobs. And, he believed that as soon as the construction boom ended, those people would all be out of work. I have heard this same refrain about the Treasure Valley for the past 26 years, every time we go through another boom. And, to some degree it has always been correct. However, I believe that the boom we are going through right now is different. In all of those other incidents the median housing price rose, but over time real estate appreciated at 4-5% per year in our area. There was still a way for a young couple to get into a house. In 2000 Autumm and I bought our first house while we were both working hourly jobs that were paying between $10 & $15 per hour. We started with an FHA loan that only required a 3% down payment, and we got by just fine, even paying for mortgage insurance. However, for the past five years or so we have seen the appreciation of real estate in the 10-12% range on an annual basis. In the cheapest areas of the county the appreciation has been even larger with median housing prices almost doubling over the past five years. This past August we had an overwhelming demand for homes here and a record low supply of homes for sale on the market. And there is no indication that this is going to stop, and there is nothing in the economic forecast indicating that it is going to stop. The point of all of this is that this boom is larger and more extreme than any of the other booms that we have experienced here, and it also seems to be sustainable. As a matter of fact, considering that we cannot build houses fast enough to keep up, it seems extremely sustainable. So, if, like my boss told me in 1994, we don't have the wages, jobs or industry to sustain this locally, how is this possible. This is only possible because something has changed. People have always desired to have the lifestyle, safety and standard of living that place like Idaho offers. However, they have always been prevented from making the move because they could not replace the salary they were earning in places like California, or they could not find work that matched their skill set and education like they could in places like California. However, today that impediment has been removed for many, many people. If you started looking deeper into what is going on, even before Covid, you would have found out that high paid professionals from California were moving here and either working remotely or commuting out of state. Years ago I met a family who had moved to Marsing, Idaho and bought their dream property with a lot of frontage on the Snake River. They told us horror stories of gangs, drugs and shootings in the best neighborhood they could afford to live in, in Los Angeles County. The father was a firefighter for Los Angeles City, and his supervisors allowed him to flex his schedule so that he worked 8 days on with 3 weeks off. This allowed them the flexibility to sell that home,