More Real Estate History from Gary Watts

Here's the rest of the California R.E. market history, from Gary Watts' talk on Friday:

1980-1990

♦ In the early ‘80s, inflation hit 21.5% and home loans were reaching 18%!
♦ A recession was taking place and job losses were increasing – leading to home foreclosures.
♦ In 1984, California home prices had their first decline since the Depression – they declined 0.10%!
“The golden-age of risk free run-ups in home prices is gone.” – Money Magazine – 1985
♦ The savings and loan scandal hit the financial markets but the government bailed them out in 1988.
♦ By the end of the decade, interest rates had decreased to single-digit (9.5%) rates.
♦ From ‘86 to ‘89, California home prices rose 46% and ended the decade with a yearly return of 7.95%!

1990 to 2000:

♦ On Nov.11, 1989 the Berlin Wall came down and, by January of 1990, Congress cut the defense budget.
♦ In a short period of time, a lot of highly-paid workers in defense and manufacturing had lost their jobs.
♦ California home prices declined from 1990 to 1996 by less than 2% annually, for a total of 12%.
“A home is where the bad investment is.” San Francisco Examiner - 1996
♦ In the following 3 years, California home prices rose 19.7%, wiping out all the losses of the early ‘90s and ending the decade with a net gain of 9.35%.
♦ From 1995 to 1999, the Bay Area’s median home prices rose a whooping 25%.
♦ The median price of a home in California has not declined since 1996, and the 38 year average rate of appreciation for homes in California is 7.75%!

Source: Researches by QTVN (regarding interest rates), U.S. Dept. of Commerce, CAR