Northwest News

Rising home prices, second-home buyers in this Idaho town force locals to leave

Main Street in Lava Hot Springs.
Main Street in Lava Hot Springs. Idaho State Journal

It’s well documented that the housing market in southeastern Idaho is booming, with home prices soaring.

Nowhere is this more true than in Lava Hot Springs, a tourist town where houses are being bought up before they’re even listed, sometimes for well-above asking price.

That’s mostly because second homes in Lava Hot Springs are a hot commodity. There aren’t many houses to begin with, and because of Lava’s layout, it’s hard to build new homes there.

Plus, most of the people moving into town want only vacation homes. One local real estate agent said eight in 10 people who ask her about buying a home are looking for second homes. And most of those are looking to rent out their homes when they’re not around so they can recoup some of the cost of their mortgages.

That has caused a conflict over housing. There isn’t enough housing in Lava for the people who live there, and even if those people manage to snatch up a house, they’ll likely be paying a much higher mortgage than they would have two years ago.

For people needing to rent a house, there are even fewer options.

So some residents are leaving, especially families with young children. This has resulted in the Lava Hot Springs Elementary School’s student population decreasing — a major worry for many people in town.

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Lava Hot Springs (blue peg) is 35 miles southeast of Pocatello and 150 miles north of Salt Lake City.

Mark Lowe is a Lava Hot Springs resident who has lived in southeastern Idaho his whole life. For two decades, he led the Lava Hot Springs Foundation, the state agency that runs the town’s public hot pools and Olympic-sized swimming pool. He’s as much a proponent of tourism as he is of getting more and varied housing in Lava.

On a recent December day, he drove around his hometown in his old pickup, pointing out things that have changed.

“When I was a kid growing up in Lava, there were lots and lots and lots of families,” Lowe said. “Now, those homes have been converted into overnight rentals. . Right now, we can go door to door to door to door. That house is empty — it’s brand new. The one that’s being built right next door to it will be empty, because it’s a vacation home.”

It’s hard to feel a sense of community when your neighbors are never there or the houses have a constant flow of transient people, he said.

Before, people would come up and stay in Lava’s hotels or make a day trip out of their visit and go back home. Now, many are staying in overnight rentals such as Airbnbs.

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The hot pools at Lava Hot Springs. Doug Lindley Idaho State Journal

According to the U.S. Census Bureau, the permanent population has fluctuated from 521 in 2000, to 407 in 2010, to an estimated 419 in 2017.

Lava Hot Springs Elementary School’s shrinking student numbers have many of the town’s residents scared that the school will shut down. According to Lowe, Lava Hot Springs Elementary School’s student body has fallen from a peak of 152 students in 1996 to a low of 59 in 2013. There are 64 students now.

Census data confirm that the under-18 population has gone down: from 27.4 percent of Lava’s population in 2000 to 16.7 percent in 2010 and 15.3 percent in 2017.

“In these little communities, that is really the hub of the community, because there are activities and things going on that people attend at Christmastime and attend during the school year and it brings that identity,” Mayor T. Paul Davids said.

The median household income in Lava is estimated at $53,942 — about $11,000 per year more than Pocatello. But BestPlaces.net, which puts recent home sales data into a cost of living calculator, estimates the median home price in Lava is $185,700, 28.6 percent above Pocatello’s median price of $144,400.

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Relaxing at the hot pools at Lava Hot Springs. Doug Lindley Idaho State Journal

“Families just starting out, they can’t afford to compete with the tourists in town,” Lowe said.

A search on Zillow.com on Dec. 12 showed just six homes for sale in the greater Lava Hot Springs area with a median price of $274,950. Only two of those homes were within Lava Hot Springs city limits.

Julie Hill, a Lava resident and a real estate agent with Idaho Rocky Mountain Real Estate in Chubbuck, is a proponent of overnight rentals. She runs one herself in addition to owning a hotel. But she understands the downsides.

“I’m saying this as someone who owns a vacation rental myself: Not all of our guests are the kinds of guests you want next door,” Hill said. “We get a lot of people who come up from Utah who are here to party, and they don’t care who they offend [or] what they do. ... People don’t want to live next door listening to people party until 2, 3 o’clock in the morning — their loud music, their drunken talk, their beer bottles that get left all over town.”

Additionally, the tourists take a toll on the town and its infrastructure.

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The high-temperature end of the hot pools at Lava Hot Springs. Doug Lindley Idaho State Journal

“The basis of our business and the people who live and work there is tourism,” Hill said. “And it’s kind of a love-hate relationship. Our busy season is during the summer, and by the time the end of August rolls around, Labor Day, we are so glad to have it over.

“It’s not that we don’t appreciate people. But it’s a lot of work. I think it’s really hard for a town our size to go from having 500 people on a day-to-day basis to, on weekends in those busy summer months, swelling to several thousand.”

She added, “Most jobs in Lava when you work in Lava are minimum wage. Trying to live on that is very difficult. My concern as someone who owns a business is if we don’t have affordable rentals in town, we’re not going to have employees.”

Hill said simple economics is the reason why so many Lava homeowners are renting out bedrooms in their homes for over $75 per night as opposed to renting out those residences for $500 per month to a single renter.

There’s another benefit to Airbnbs, Hill said: It’s easier to get rid of bad tenants.

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The entrance to the hot pools at Lava Hot Springs. Doug Lindley Idaho State Journal

“It’s harder to get out a monthly tenant than it is a nightly tenant,” Hill said. “I have a problem with somebody who’s in there for one night? Guess what? They’re gone the next day.”

There is little new-home construction. Lava also has some terrain restrictions, with mountains on either side and state-owned land taking up a large amount of the available area the city could conceivably annex.

According to Lowe, residents are loathe to give up their homes. “People have emotional attachments to Lava,” he said. “They’ve lived here a while, they got (their home) from their parents or whatever else.”

Lowe and his wife, Lorrie, think they have a solution. The Lowes hope that a patch of land they own just west of Lava Hot Springs — a spot overlooking the winding Portneuf River and the mountains surrounding — will soon become a community of people who live there year-round.

The LavaLowe Subdivision is different from an average subdivision because of a clause that requires homeowners to make the houses their primary residences.

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Mark Lowe looks over his Lava Lowe Village subdivision taking shape west of Lava Hot Springs. The homes would be required to be their owners’ primary residences. Doug Lindley Idaho State Journal

The Lowes are selling the lots for single-family homes for between $42,500 and $47,500 each. It’s up to a buyer to then pay for construction of the home.

Hill said any houses that hit the market today in Lava Hot Springs quickly attract multiple offers and many sell for higher than the asking price. Many of the buyers are from outside Southeast Idaho and can pay cash, she said.

“When someone comes in and offers cash, it’s more appealing to a seller, because it’s not dependent on an appraisal and any contingencies the bank may make for the purchase of the property,” she said. “So [local people] have lost out on properties.”

“On the one hand, if you live here, you’re frustrated by it,” she said, “but when it comes time for you to sell, you appreciate it. It depends on what shoe you’re wearing at the time.”

Davids, the mayor, hopes a balance can be struck. “We just want to keep the town growing and also have our identity,” he said.

This article has been condensed from the original. Read the original version here.

The history of Lava Hot Springs

From Lavahotsprings.com:

“For years people have gathered at the springs to bathe, rest and worship. Many people believe that there are curative properties associated with the hot mineral water and refer to the Springs as “the healing waters” It is rumored that long ago the Springs were neutral ground and shared in peace by all.

“Once part of the original Fort Hall reservation, the springs and land were part of a treaty agreement between the Indians and the US Government in the late 1800’s. The federal government purchased the springs and land, approximately 178 acres including the springs.

“A 1902 act granted the lands to the State of Idaho to be held by the State for public use. Later all rights to the operation, management, control, maintenance and improvement of the lands and property were vested in the Lava Hot Springs Foundation, an agency within the Idaho Department of Parks & Recreation.”

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