Working Paper

Is There a Housing Bubble in Humboldt County?

This analysis is the first look into the housing market in Humboldt County since the rapid increase in national house prices in the early 2000s. The data we present for Humboldt County 1989-2004 is consistent with housing price movements in other coastal regions of the U.S. where some believe that a “housing bubble” has formed. In the three years from January, 2002 to December, 2004, the median house price appreciated by 72% or $113,750, with the most rapid increase in 2004. More importantly, the P/E ratio never rose or fell by more than one point from 1989-2002. In both 2003 and 2004, however, the P/E ratio climbed by three points, so that it was 23.8 in December 2004 while it averaged 15.4 from 1989-2002.