People ask, “Are we in a bubble?”

If you mean a market where prices have escalated rapidly, then yes!  The SD Case-Shiller Index is +59% in the last eight years – an average of 7% per year!

We’ve seen 7% appreciation per year before – what’s remarkable is how long this hot streak has lasted.  We’ve had eight years of solid appreciation before (1997-2005), but that was fueled by no-qual loans.  This time, buyers are faced with strict underwriting guidelines, but they want a house bad enough that they find a way.  The unusual twist is how exploding prices haven’t caused more long-timers to sell – as a result, we’re as competitive now as ever. This is the strongest market any of us have ever seen!


  • Current homeowners don’t need to move.
  • Current homeowners can’t find a better value.
  • Low supply of new homes.
  • Buyers on the fringe fear that they could get priced out.
  • Severe traffic makes buyers reluctant to go farther out.
  • Too many people live here now.
  • Too many realtors now.
  • The rich get richer.

The common theme is scarcity.

For buyers and sellers, it can be a wicked ego-and-greed cocktail mixed with some basic hoarding instincts.  Winning becomes more important than money – and buyers keep paying more for a house in order to join the club!

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