SUMMARY    HISTORY    PEAKS & TROUGHS    FORECASTS

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In order to most accurately determine prior market price cycles one must remove the effects of inflation and look at real historical prices. The past thirty years have seen three real price cycles and the beginning of a fourth in Boston. Market cycle time periods have varied from a market downturn of seven years to the prior market growth cycle of nine years.

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The mortgage-debt-to-income ratio is commonly viewed as the most accurate method of determining market cycles. The past thirty years have seen three cycles and the beginning of a fourth, all of which included large changes in home affordability. Fortunately, due to historically low mortgage rates, the prior cycle did not eclipse all time highs. Unfortunately, at current levels today’s Boston home prices have an extremely high mortgage rate fluctuation risk.