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 two real price cycles and potentially the beginning of a third in Jacksonville. The prior Jacksonville market downturn cycle of 17 years involved good nominal price growth, but could not keep up with inflation causing a decline in real prices of nearly 20%. Market cycle time periods have varied from the prior growth cycle of 11 years to the downturn cycle of 17 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 potentially the beginning of a fourth, 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 Jacksonville home prices have an above average mortgage rate fluctuation risk.