The Idaho Business Review had an uplifting article yesterday. They reported on the Idaho Housing and Finance Association executive director Gerald Hunter’s talk at the 2008 Economic Outlook Forum here in Boise. Overall, Hunter believes that if we look at the long term picture of our housing market, we are still in good shape. Comparing recent sales statistics with those over the past 10 years, we are still among the national average for valuation increase. Yes, increase. Over the last ten years we have still averaged a 5%+ annual increase in home prices. If we forget about those two fluke years (05/06), we’re doing great. Say you bought before the boom, left the country for two years and came back, the market would seem just as normal as ever.
The unfortunate part is that many people bought during those two years so none of this 10 year average nonsense matters to them. Well, the good news is that worst may be over. According to Hunter:
“If you use that benchmark [referring to the annual growth increase], you may have to conclude that Boise has made its way through the housing bubble.”
This is not to say that we’ve reached “the bottom,” but it is a good sign that we are close. Close enough, in fact, that any attempts at timing “the bottom” may be fruitless. Over the next year as we approach the bottom (right now), reach the bottom (soon), and start to see price increases again, it may all blur together. There won’t be a specific day that we can call the last day prices dropped. And again, we won’t be sure we’ve hit the bottom until it has passed.
Remember, many of the issues we are facing today were caused by people planning to sell shortly after purchasing their home (history tells us you need to wait 4 years to break even on a home) or people trying to use their future equity today. A home purchase is a long-term commitment and if you’ve considered and accepted this fact, you’re probably ready to buy. And right now, your timing couldn’t be better.
Photo Credit: Christine ™ via Flickr
