Real Estate Trends – What history tells us about the future

Question: Where do you see the Real Estate Market in the next 2 yrs?

Answer: I love this question because when I tell other Realtors my theory, at first they laugh at me then when I give them the facts then they aren’t laughing too much at me anymore….I get this stare with no more comments at all. Here is my theory, if you go back and look at history, this is what you will find:

1985-1986: Housing is booming, inventory is low.
1987: Housing still booming, prices increasing, inventories low.
1988: People start to question the boom. Realtors assure us the boom will continue. Houses aren’t like stocks after all.
1989: Prices are very expensive; affordability an issue. Sales slow and prices drop. Mention of risky loan types.
1990: Prices take a serious plunge. One article claims that housing booms are a bad thing and we should hope prices stay low. Increasing mortgage rates are blamed for the bust. The word “recession” is mentioned. Gloom and doom.
1991: A “dead cat bounce”? Some folks wondering if the bust has bottomed out or not. Sales are abysmal (e.g., -42%). Other parts of the country showing some signs of recovery.
1992: No one is buying; housing is an investment that no one will touch. Desperate political efforts being made to encourage house buying. Rock bottom prices and lower mortgage rates encourage some purchasing. The year ends with some buying. Another “dead cat bounce”? It’s not clear.
1993: It’s definitely a buyer’s market. Some people are saddened by the fact that current prices are 50% of what they were in the 1980’s. The housing bust in Southern California is clearly negatively impacting the California economy and the national economy at large. Sellers are desperate to sell (and some people taking extreme measures like putting huge “for sale” signs on their lawns for passing planes to see). Folks who waited out the boom to buy at the bottom are being handsomely rewarded for their patience. Proof-positive of the contrarian investing style — be greedy when everyone is fearful and fearful when everyone is greedy. The “slump” may be ending.
1994: Housing begins its comeback. People who had the intelligence to wait for the bottom are buying now at great values. Even rising mortgage rates are not shaking the recovery.
1995: Some parts of the Southland are recovering others are not. People with “negative equity” are in despair.
1996: A tentative recovery is still in the making.
1997: Finally, housing has recovered.
2001: 9/11 attacks – real estate takes a dive
2007-2008 – Market takes another dive due to no income verification loans and greedy mortgage companies giving loans to any person who can breathe.

Do you see the trend ? Ever seven years we see a market where real estate will tank….so if you add 2007 or 2008 + 7 – what do you get?
2015 or 2016 at the latest..

If you want my opinion about whether you should buy, sell or both right now call me and I will give you more theory to consider before you make that decision.



About robertjrussellcompanies

International Real Estate Agent * Insurance Broker * Radio Talk Show Host * Public Speaker * find out about me - visit
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