![]() Case in point: In 2012, a Nobel-Prize-winning economist stated that home prices might not recover " in our lifetimes," when in fact, the recovery had already (just) begun. Regardless of how recent cycles have played out, it is vital to understand how extremely difficult it is to predict when different parts of a cycle will begin or end. (Different market price segments had bubbles, crashes - or adjustments - and recoveries of differing magnitudes in the last cycle, which is addressed at the end of this report.) ![]() Note: Most of these charts generally apply to higher-priced Bay Area housing markets, such as those found in much of San Francisco, Marin, Central Contra Costa (Lamorinda & Diablo Valley) and San Mateo Counties. Looking at cycles gives us more context to how the market works over time and where it may be going - much more than dwelling in the immediacy of the present with excitable pronouncements of "The market's crashing and won't recover in our lifetimes!" or "The market's crazy hot and the only place it can go is up!" While future cycles will vary in their details, the causes, effects and trend lines are often quite similar. Financial-market cycles have been around for hundreds of years, from the Dutch tulip mania of the 1600's through today's speculative frenzy in digital-currencies. By Patrick Carlisle, Compass chief market analyst, SF Bay Areaīelow is a look at the past 30+ years of San Francisco Bay Area real estate boom and bust cycles.
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