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 30 years have seen 4 real price cycles in Boulder, in which the current cycle has taken place over the past 6 quarters. As the market is now in a downturn, it is important to glance at the prior downturn cycle which involved near stagnate nominal prices and falling real prices. Market cycle time periods have varied from the market downturn of 8 years to the prior market growth cycle of nearly 15 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 30 years have seen 4 cycles all of which included large changes in home affordability. An interesting aspect of Boulder affordability trends is that the market peaked 6 years earlier (during the end of the dot-com bubble) than most every other US city and has trended back towards the local historical median ever since. However, due to the abnormal interest rates of the late 1970s and early 1980s the median affordability ratio is skewed higher and affordability may have to trend below the historical median before returning to a long term growth phase.