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 and the beginning of a fourth in Tampa. Now that the market is in a downturn cycle a reference point is the prior downturn which last 13 years and consisted of marginal nominal growth and falling real prices. Market cycle time periods have varied from a downturn cycle of 13 years to prior growth cycle of 9 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 and the beginning of a fourth, all of which included large changes in home affordability. The peak in 1982 is an abnormality due to all time high mortgage rates. It does however act as the turning point of a nearly 17 year improvement in Tampa 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 affordability ratio generates concern as it has reached a volatile level.