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 four real price cycles and potentially the beginning of a fifth in Buffalo. Each Buffalo market cycle has
involved nominal price growth. Market cycle time periods
have varied from a downturn cycle of eleven years to the prior
growth cycle of nearly six years.
GET BUFFALO MARKET FORECASTS Next >
|
Time
Period |
Real
Price History |
Real
Price Change |
Nominal
Price History |
Nominal
Price Change |
1978:Q2
- 1982:Q4 |
$97,100
- $77,200 |
-20.5% |
$30,300
- $37,200 |
22.7% |
1982:Q4
- 1989:Q4 |
$77,200
- $107,800 |
39.7% |
$37,200
- $66,500 |
79.0% |
1989:Q4
- 2000:Q1 |
$107,800
- $91,500 |
-15.1% |
$66,500
- $76,600 |
15.2% |
2000:Q1
- 2005:Q4 |
$91,500
- $106,500 |
16.4% |
$76,600
- $102,300 |
35.3% |
2005:Q4
- 2006:Q3 |
$106,500
- $106,000 |
-0.5% |
$102,300
- $106,000 |
2.2% |
|
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, all of which included large changes in home affordability.
Fortunately, due in part to historically low mortgage rates, the current
cycle has not come remotely near the all time highs of the early 1980s.
Conversely, this means today’s Buffalo home prices have an above
average mortgage rate fluctuation risk.
|
Time
Period |
Buffalo
Mortgage-Debt-to-Income Ratio |
Buffalo
Ratio Change |
National
Mortgage-Debt-to-Income Ratio |
National
Ratio Change |
1978:Q2
- 1981:Q4 |
16.0%
- 26.5% |
65.5% |
23.5%
- 40.8% |
73.6% |
1981:Q4
- 2003:Q3 |
26.5%
- 9.6% |
-63.8% |
40.8%
- 17.3% |
-57.6% |
2003:Q3
- 2006:Q3 |
9.6%
- 11.4% |
18.9% |
17.3%
- 23.7% |
37.1% |
|
