I would like to provide some insight on the “flat” market of the early 80’s. In constant dollars the early 80’s was a massive crash. Nominal sales prices were essentially flat for about 3 years while inflation was double digit.
In the sales that did happen, the sellers generally carried back financing at below market interest rates making their cash equivalent sale price far lower than the stated price on sale. The market was also propped up by incredible inflationary expectations.
In mid city area apartment buildings, nominal prices stayed flat while rents nearly doubled!!
My point is: Previous soft landings occurred against a backdrop of rising incomes and high inflation. It is hard to imagine a soft landing in a low inflation environment.
