bostonbubble.com

[Lunatec]

Does anybody have a good information source about property prices in the immune towns during the very high interest times of the early 1980s?

If in a few years rates go up, can we expect prices to fall significantly in the immune towns? Or is the level of demand so high, and there is so much old money floating around that prices would remain stable?

Many thanks for any info or informed opinion,

Lunatec

[foobar]

This paper by Case and Shiller from 1996 shows that in a couple of the "immune" towns prices only fell around 2% from the peak of
the 1980s real estate boom (Table 1).

http://www.msfraud.org/Articles/MortgageDefaultRisk.pdf

13 towns showed declines of 7 percent or less.

[Lunatec]

Foobar, thanks for the info.

The drop after 1990 in those 'immune" towns was indeed small - but still the increase from 1982 to 1990 was pretty impressive - a minimum of 136%. I assume the low prices in the early 1980s were due to the high interest rates. So a strategy of waiitng for peak intrest to buy would 've paid off - both in terms of price appreciation and the potential for refinancing at a lower rate.

Of course, that was then, and now is now.