Today, I want to talk about home values and what they are doing in Ada and Canyon County. Recently we have seen it switch from a sellers’ market to a buyers’ market. A lot of people are waiting to see the drop off in values that happened in 2006-2008, but we aren’t seeing that this time around. What is happening right now is inventory driven. At least 1/3 of people right now own a house and have bought in the last four years. They are going to have a hard time wanting to give up their low interest rates and sell their house. This creates an inventory issue. We also have a large segment of people that own their house free and clear. They also don’t want to go out and do anything in the current market. Without having enough inventory available, we aren’t going to have a major decrease in values like we did. Back then, we had too many people that owned houses and were underwater and were being forced to get rid of those houses.
Do I think we could drop in the single digits, percentage wise, yes, I think that can happen in the next year. But I also believe rates will continue to increase. I still believe that the highest point will hit next year, maybe in the 2nd quarter. I think right now, rates are going to keep going up until you stop inflationary factors. This isn’t happening yet, but we are getting closer.
My feedback right now is to buy something now versus renting. Payments and rates are going to continue to increase, and values are not going to drop like people are thinking they will. We are looking at following the model of the early 80’s where things just kept getting more expensive.
Don’t hesitate to reach out with any further questions!