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 Denver. As the market is now in a downturn a point to consider is the prior downturn cycle which involved marginal nominal price growth and falling real prices. Market cycle time periods have varied from a market downturn of twelve years to the prior market growth cycle of nearly fifteen 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 come near the all time highs of the early 1980s. Unfortunately, at current levels today’s Denver home prices have a higher than normal mortgage rate fluctuation risk.