We have heard it forever, “real estate is cyclical”. However, when you are in a down cycle it often seems like the rules have changed and it’s never going to improve. That is why most people sell stock when the price is low and buy stock when prices are high. It’s easy to get caught up in the emotion of the current market swing. The key to this phenomena is to trust the cycles, take a long term view. The secret to taking advantage of cycles is to recognize the cycle early and act before the change is a commonly held belief.
FHFA.gov recently released their third quarter report showing home appreciation across the country. Over the past year, homes on average have increased in value 4%. A positive number is nice to see but it certainly doesn’t erase the tough times homeowners have had across the country. In this report it showed that homes in Boulder County have appreciated 1.9% over the last year (ending September 30th), .92% for the quarter and .83% over the past year.
As a homeowner and real estate investor I know that it feels good to have some positive price momentum happening in the market. Personally speaking, it has been a long time since I have had a warm fuzzy feeling after checking recent sales. But alas the engine is headed in the right direction. Metaphorically speaking, we have lots of coal to shovel to get up to speed but it feels like we are making progress.
The charts below show: 1) The average home appreciation for Boulder County and the United States over the past five years. 2) Boulder County’s ranking nationally in home appreciation. Currently we are 41st out of 304 markets.