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 twenty years have seen two real price cycles and potentially the beginning of a third in Sioux Falls. Each Sioux Falls market cycle has involved nominal price growth. Market cycle time periods have varied from a downturn cycle of three years to the prior growth cycle of sixteen 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 twenty years have seen two cycles, both of which included large changes in home affordability. Fortunately, due in part to historically low mortgage rates, the current cycle has not hit the all time highs of the mid-1980s. Conversely, this means today’s Sioux Falls home prices have an above average mortgage rate fluctuation risk.