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 in Portland. Including one cycle of nine years in which nominal growth was 12.0%, yet real growth was negative 32.1%. Market cycle time periods have varied from the downturn cycle of 9 years to the current growth cycle of 18+ 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. The peak in 1980 is an abnormality due to all time high mortgage rates. Due to this abnormality of the late 1970s and early 1980s, the median affordability ratio is skewed. Consequently, despite the fact that Portland home affordability is only marginally above the median, the current level generates concern as it has reached a concerning level.