Are We Headed for Another Bubble?

A bubble? Are we headed for another bubble? One topic of conversation that comes up almost weekly between agents and home buyers is whether or not we are experiencing another real estate bubble. This is a conversation we have with clients or others in the community almost weekly. With home values on the rise these past few years, we do understand where people are coming from. But the factors contributing to the increase in appreciation in our market now are very different than what was going on during the 2005-2007 increase and the subsequent 2008-2009 “bubble” or crash. One of the main differences from the past to today’s market is homes are being sold to actual homeowners rather than investors. And then investors who are purchasing homes today and doing them as actual investments that they plan to either rent for a few years and then move into themselves or plan to keep as investments.

In 2012 our market became a seller’s market again with inventory levels in most price ranges under 6 months. When inventory is low and demand is higher, prices increase. We have steadily seen that increase in the past four years with 2016 being the strongest so far as inventory supply levels in most price ranges lowering to 3 months or less. Supply and demand – when there is higher demand than supply – prices go up!

Now this doesn’t mean we will continue to appreciate at this rate, but we will until something changes – which would be the demand going down or the home supply going up. But we don’t see any indicators that that will change soon. Have you researched online about Boise, ID and Meridian, ID? These are two great cities, with rave reviews and an amazing lifestyle. We are blessed to live in such a great community, and others are catching on. Back in 2005 and 2006, we had a lot of investors in our market looking to invest as property values were on the rise. But the home buyers these past few years have been people really looking to move to the area and make it home. I actually talk to quite a few buyers from out of state who don’t plan to move here for another year or two, but are looking to purchase a home now before prices continue to rise.

So for those of you worried we are headed towards another bubble – don’t! We will be able to see the market indicators for any changes that will come in the future. We are all much more on our toes this time and cautious of a repeat. And for those of you who are potential buyers hoping for the market prices to dip – don’t hold you breath, as we don’t see any indicators to tell us anything other than 2017 is going to remain a strong market. Still a great time to sell and a great time to buy! What are you waiting for? Make this holiday season the most unforgettable time of your life and let the Team of Pros take excellent care of you!

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