Real Estate

Another real estate bubble or just a bounce?

By From page HS3 | June 13, 2014

A real estate bubble can happen for a number of reasons. One example is when there is a rapid increase in property values, not supported by solid economic factors such as rising wages. Eventually prices reach unsustainable levels and then decline, often rapidly. That’s what happened beginning in 2003 when in May the median selling price of a home in El Dorado County was $319,000. By May of 2006 the median selling price had climbed 56 percent to $500,000. Then the bubble popped. The run up in home prices could not be supported by solid economic data. Over the next five years home prices retreated and by May of 2011 the county’s median selling price stood at $250,000.

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Ken Calhoon

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