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 Ruidoso and one mini-cycle (1993 - 1995 run up followed by the 1995 - 2000 real price decline). Each market cycle has involved nominal price growth. Market cycle time periods have varied from the downturn cycle of twelve years to the current growth cycle of 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, all of which included large changes in home affordability. The peak in 1981 is an abnormality due to all time high mortgage rates. It does however act as the turning point of a nearly 22 year improvement in Ruidoso home affordability. Due to this abnormality of the late 1970s and early 1980s, the median affordability ratio is skewed. Consequently, despite the fact that home affordability is only marginally above the median, the current level generates concern as it has reached a volatile level.