What is Appreciation?
Appreciation is an increase in the value of an asset, in this case real estate, over time. Driving factors that may cause the increase are: increased demand or weakening supply, or as a result of changes in inflation or interest rates. This is the opposite of depreciation, which is a decrease over time. Obviously the Boise Real Estate market has seen some pretty serious decline in appreciation due to a multitude of factors.
Here is Idaho’s Chart on Appreciation from 1991 to 2009 Quarter 3
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Aaron-thanks for all of your contributions
Great post with lots of great information. Sad to see that Idaho lost so much but hopefully the market turns around and the chart looks the exact opposite next year!
The interesting thing about appreciation is that over time real estate really only appreciates at the rate of inflation. That is not to say that a lot of money can’t be made. The rate of appreciation from 2002 to 2006 was far greater than the rate of inflation. However, of course there are also corrections like the one we had and periods of stagnant prices like the one we are in.
I like how it shows the appreciation level, not just in the past year, but over the past 18 years. It’s nice to look at it and see how the market trend goes up and down over a lengthy amount of time.