A US map with Phoenix, Boise, Austin and Salt Lake City highlighted.
Illustration by Lanette Behiry/Real Estate News

Pandemic boomtowns are still booming, sort of 

Austin, Boise, Phoenix and Salt Lake City home prices soared during Covid, and while gains have slowed, they haven’t “seen anything resembling a price crash.”

July 5, 2024
4 minutes

Key points:

  • A CoreLogic analysis looked at cities with some of the highest rates of growth between 2020 and 2022 and found that prices are still well above pre-pandemic levels.
  • Boise prices appreciated by a stunning 230% during that period, while Austin, Salt Lake City and Phoenix saw gains of around 200%.
  • Although the markets have cooled, “I think we’re going to see them rise back up to being some of the faster-appreciating cities,” a CoreLogic economist said.

A handful of cities that saw prices surge during the pandemic — and seemed poised for a major correction — appear to be holding steady, according to a recent analysis by CoreLogic.

Relatively affordable metros like Austin, Boise, Phoenix and Salt Lake City experienced an influx of new buyers between 2020 and 2022, which caused home prices to soar. While activity in these markets has settled since the pandemic ended, their continued price appreciation suggests these cities are well-positioned to capture future growth, said Thomas Malone, an economist with CoreLogic.

"Ultimately, despite experiencing sudden and sharp slowdowns in appreciation over the past year-and-a-half, it would be a wild exaggeration to say that pandemic boomtowns have seen anything resembling a price crash," Malone wrote in the report.

A boom, but no major bust, as significant price gains remain

The pandemic was a catalytic event for the housing market, as a sudden demand for more space, coupled with the rise of remote work, led many homebuyers to look at second- or third-tier cities for deals.

Boise was a prime example of this trend: Between March 2020 and May 2022, home prices in the city appreciated by a staggering 230%, according to CoreLogic, before they began to depreciate. By the fall of 2022, the market had cooled considerably.

But even as prices normalized and diminished some of those gains, as of February 2024, homes in Boise were still priced more than twice as high as they were in 2019.

Cities like Austin, Salt Lake City, and Phoenix also saw home prices appreciate by roughly 200% during their boom era, the data shows.

Regional characteristics, affordability have kept demand steady

Malone said one thing each of these cities has in common is their generous outdoor amenities, which is one reason why they are well-positioned to benefit from another national home price boom. For example, people in Phoenix can play golf year-round. Salt Lake City is known for its skiing options while Boise is known for its hiking and biking trails.

These markets are also still somewhat affordable despite their incredible growth, Malone added. For instance, the median sale price in Phoenix is roughly $462,000, not far above the U.S. median sale price of $439,000, according to Redfin. And while home prices are higher in the other boomtowns, they remain well below the prices in large coastal metros — areas that saw the most outbound migration during the pandemic.

"This leads me to believe the relative fundamentals behind these markets are more or less similar," Malone told Real Estate News.

Demand for homes in these markets also seems to be relatively stable given their rising home prices, Malone said. He noted that price growth is a better measure of demand than appreciation percentages because it shows "where people want to be," not necessarily where people are exchanging the largest sums of money.

That said, appreciation has been considerable, and homeowners in the four markets analyzed have retained most of the equity they gained between the peak years of 2019 and 2022 — which is upwards of $100,000, according to CoreLogic data.

Agents, buyers shouldn't shy away from boomtowns

Malone said he expects demand will continue to drive growth in pandemic boomtown markets over the next five or so years. Home prices may not climb as fast as they did during the early 2020s, but "I think we're going to see them rise back up to being some of the faster-appreciating cities," Malone said.

For agents and brokers, Malone said they should focus on long-term appreciation when helping their clients select their next home. This approach could also help buyers find good investments in markets that may be getting close to being overbuilt, he added.

"They shouldn't worry too much because they want positions with a long runway to appreciate," Malone said.

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