SUMMARY    HISTORY    PEAKS & TROUGHS    FORECASTS

---

1  |  2  |  Page 3  |  4   

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 and one mini-cycle in San Jose. The mini-cycle following the internet bubble collapse resulted in immediate declines of 6.1% in real prices and 4.4% in nominal prices over a year's time. This one year period was then followed by nearly three years of real price stagnation, before the prior strong increases in prices resumed. Market cycle time periods have varied from a downturn cycle of five years to the prior growth cycle of eleven years.

GET SAN JOSE MARKET FORECASTS     Next >

The mortgage-debt-to-income ratio is commonly viewed as the most accurate method of determining market cycles. The past thirty years have seen five cycles and the beginning of a sixth, all of which included large changes in home affordability. Fortunately, due to historically low mortgage rates, the prior cycle did not eclipse the all time highs of the early 1980s. Unfortunately, at current levels today’s San Jose home prices have an extremely high mortgage rate fluctuation risk.