Accurately
projecting local prices is a challenging task because so many factors
play a part in home prices. Mortgage rates, inflation, job growth,
median income, legislation, migration patterns and market psychology
are just a few. Additionally, real estate markets rarely have periods
in which they achieve average historical growth. Rather, real estate
markets have periods of tremendous growth followed by market decline.
Consequently, the tables and charts below present three likely scenarios,
rather than one definite path.
FIND OUT WHAT OTHERS ARE SAYING ABOUT THE SAN JOSE MARKET Next >
|
Scenario
1:
Continued Low Mortgage Rates and Inflation with Strong Income
Growth |
Time
Period |
Real
Prices |
Real
Price Change |
Nominal
Prices |
Nominal
Price Change |
2006:Q3
- 2011:Q3 |
$781,700
- $625,000 |
-20.1% |
$779,000
- $724,500 |
-7.0% |
Duration |
Real
Home Equity Change |
Average
Yearly Change |
Nominal
Home Equity Change |
Average
Yearly Change |
5
Years |
-$156,700 |
-4.4% |
-$54,500 |
-1.4% |
Scenario
2:
Average Historical Mortgage Rates, Inflation & Income
Growth |
Time
Period |
Real
Prices |
Real
Price Change |
Nominal
Prices |
Nominal
Price Change |
2006:Q3
- 2014:Q1 |
$781,700
- $520,000 |
-33.5% |
$779,000
- $649,100 |
-16.7% |
Duration |
Real
Home Equity Change |
Average
Yearly Change |
Nominal
Home Equity Change |
Average
Yearly Change |
7.5
Years |
-$261,700 |
-5.3% |
-$129,900 |
-2.4% |
Scenario
3:
Deep National & Local Recession with Higher than Average Inflation (Stagflation) |
Time
Period |
Real
Prices |
Real
Price Change |
Nominal
Prices |
Nominal
Price Change |
2006:Q3
- 2016:Q3 |
$781,700
- $400,000 |
-48.8% |
$779,000
- $592,100 |
-24.0% |
Duration |
Real
Home Equity Change |
Average
Yearly Change |
Nominal
Home Equity Change |
Average
Yearly Change |
10
Years |
-$381,700 |
-6.5% |
-$186,900 |
-2.7% |
|
