Have you ever noticed that markets (all types) tend to move to extremes, then revert to a more reasonable mean?
Just as the Ada County median price of $248,900 in July 2006 was overly-optimistic, so was the overly-pessimistic $135,000 median price of May 2011.
That’s a 45.8% decline from the peak and an obvious over-correction.
Our April 2012 median price came in at $158,777 ~ a healthy 17.6% over the $135,000 low of May 2011.
After spending the past five years reversing course to “the bottom”, it’s now apparent that the Boise real estate market overshot both our high and low points.
We are now experiencing a strong rebound from our low point (that elusive “bottom” everyone was looking for and missed), much like a rubber band that has been released after being stretched to its limits.
Our recent strong activity in the lower price ranges is not surprising, given the combination of a strong rental market, affordability, and low interest rates.
At some point, however, our market will stabilize as buyers and sellers achieve a reasonable semblance of balance.
A balanced market (where both buyer and seller have an equal amount of bargaining power) is best in the long run.
As we learned a few years back, Ada County cannot sustain 24% annual appreciation without severe consequences.
Data pertains to Ada County single-family homes on lot/acreage. Data does not include condo/townhome properties.
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