We determined in a previous episode that despite an overwhelming belief in the idea, job losses did not trigger the early-1990s housing downturn. Something else must have been at work… but what?
Today we’ll turn our suspicious eye toward interest rates. After all, potentially higher mortgage rates are the clouds on the horizon of even the sunniest real estate forecast. As long as rates stay low, bullish housing analysts routinely tell us, home prices should hold up. (This statement is often followed by a silent prayer to the gods of the bond market). So it seems reasonable to wonder whether uncooperative interest rates were at least partly responsible for the 90s downturn.
The answer in this case is a resounding "no."
Take a look at my market
Take a look at my market history report for the Bakersfield and Los Angeles at
http://homepricehistory.blogspot.com/
Additionally, if there’s enough interest I’d be willing to do a similiar report for San Diego.
Good work, analysisguy. I
Good work, analysisguy. I vote for a San Diego report.
Your data goes back to ’75; I presume the price data is OFHEO?
Nice data. An SD one would
Nice data. An SD one would be good. Your chart answered the question I had on Rich’s chart, which was, what was the payment ratio in real dollars. I’m still not clear if his chart has prices in real or nominal.