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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 four real price cycles in Philadelphia. The prior Philadelphia market downturn was a 7 year period in which nominal prices essentially stagnated and real prices fell in excess of 20%. Market cycle time periods have varied from the current growth cycle of 9 years to the downturn cycle of 7 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 prior cycle did not come near the all time highs of the early 1980s. Due to current historical lows in mortgage rates home affordability is only moderately above the median. However, this translates to Philadelphia home prices having an above average mortgage rate fluctuation risk.