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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 five real price cycles in St. Louis. Each market cycle has
involved nominal price growth and in downturns has seen inflation eat away at prior market gains. Market cycle time periods have varied from a downturn cycle of 4 years to current growth cycle of 13 years.
GET ST. LOUIS MARKET FORECASTS Next >
|
Time
Period |
Real
Price History |
Real
Price Change |
Nominal
Price History |
Nominal
Price Change |
1975:Q4
- 1978:Q2 |
$99,400
- $118,000 |
18.8% |
$28,300
- $42,400 |
50.1% |
1978:Q2
- 1982:Q2 |
$118,000
- $99,800 |
-15.4% |
$42,400
- $46,900 |
10.5% |
1982:Q2
- 1987:Q3 |
$99,800
- $116,900 |
17.2% |
$46,900
- $66,000 |
40.7% |
1987:Q3
- 1993:Q4 |
$116,900
- $103,900 |
-11.1% |
$66,000
- $74,100 |
12.3% |
1993:Q4
- 2006:Q4 |
$103,900
- $147,900 |
42.3% |
$74,100
- $147,900 |
99.5% |
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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 potentially the beginning of a fourth, 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 17 year improvement in St. Louis home affordability. The extremely favorable affordability ratio in St. Louis translates to signs of strong growth potential.
|
Time
Period |
St. Louis
Mortgage-Debt-to-Income Ratio |
St. Louis
Ratio Change |
National
Mortgage-Debt-to-Income Ratio |
National
Ratio Change |
1975:Q4
- 1981:Q4 |
14.7%
- 27.0% |
83.3% |
20.5%
- 39.2% |
91.0% |
1981:Q4
- 1998:Q4 |
27.0%
- 10.7% |
-60.2% |
39.2%
- 15.9% |
-59.5% |
1998:Q4
- 2006:Q2 |
10.7%
- 13.7% |
27.9% |
15.9%
- 23.5% |
48.0% |
2006:Q2
- 2006:Q4 |
13.7%
- 13.3% |
-3.3% |
23.5%
- 21.7% |
-7.5% |
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