If you own a home in Ada County, you may have received a letter in the mail last week from the county assessor’s office. And that letter probably said your property value had gone up, maybe even substantially.
That's good news for those wanting to sell their house or those who’ve been underwater on their mortgage. But the increases could mean higher taxes, and it could actually be bad news for the economy.
Last year we spoke with Ada County Assessor Bob McQuade about the big jump in property values that had taken place in from 2012 to 2013. McQuade’s office determines what homes are worth. At the time, he said 3 or 4 percent is considered healthy growth. From 2012 to 2013, Ada County saw an increase of about 12 percent. That’s a far cry from the 25 percent annual growth before the housing bubble burst, but too high to be sustainable, McQuade said.
“If we see this continuing on for another year, another two years, then we could be seeing the emergence of another bubble,” McQuade said a year ago.
Since 2013, the average Ada County property value has gone up 18 percent. So, should we be worried about another housing bubble? McQuade says he doesn’t know.
He’s doing a lot of comparing between what’s going on now and what happened during the height of the bubble. One thing that might be cause for concern is that land values are going up much faster than home values. Land speculation was a big part of the bubble.
“Land is up 30 percent from January of 2013 to January of 2014,” McQuade says. “That’s a real hefty increase. So that’s something I would really want to keep an eye on.”
But he says Ada County is not seeing anywhere near the level of land frenzy it saw in 2006 or 2007.
“We were looking at land that sold for, we’ll say $25,000 in March. In July it sold for $50,000,” he says. “And towards the end of the year it sold for $100,000. And nothing had been done with it at all.”
And McQuade doesn’t think the market is being driven byoutside investors like it was during the bubble. He says most people buying homes in the county now plan to live in them. So he’s not ready to sound the housing-bubble alarm just yet.
He says after years of unreasonably high values and then years of unreasonably low values, the market may still be trying to figure out exactly what a reasonable home value looks like in Ada County.
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