1947 through the early 1960s saw tremendous growth in new family creation and an equal boom in American prosperity. It marks the birth of a generation unlike any other in American history. During this period, the idea of a "home of one's own" took on a whole new meaning.
WWII ends, resulting in the demobilization and returning home of millions of soldiers by 1947. Families are started in record numbers, creating a demographic that ultimately becomes known as the "Baby Boomers."
Homes begin selling in Levittown, a community on Long Island that is 25 miles east of Manhattan. Ultimately, 17,400 homes are built and sold there, creating the first mass-produced suburb.
Federal government passes the Housing Act of 1949, which, in part, stated its goal of "...a decent home and suitable living environment for every American family."
House advertised in San Francisco for $12,500 (only $2500 down). Prices that had not moved much in a very long time now suddenly started to climb as people realized the "American Dream" of home ownership.
U.S. GNP (Gross National Product) triples its 1940 figure of approximately $100 billion to achieve $310 billion.
Del Webb begins selling homes in his new subdivision in Sun City, Arizona, thus launching a new type of development known as the "master-planned retirement community."
"Black Gold, Texas Tea." In a sense, "Beverly Hillbillies" portrays the American move from rural areas of the country to its cities, a demographic event that continues to this day. While wildly exaggerated as a situation comedy, Beverly Hillbillies struck a chord with an America that looked to a prosperous future, and reigned as a top television show from its inception in 1962 until 1971.
"Oil" becomes a major news topic and everything associated with oil works its way into the American consciousness. As oil price leads inflation, it decreases the value of the U.S. dollar and many Americans discover the advantages of real estate investment for the first time.
The first of the baby boomers turn 30 years old. Inflation and the number of families wanting larger homes causes a steady increase in home prices until high interest rates take their toll in the early
U.S. economy rebounds from high oil price shock but continues the period of high inflation. Real estate ownership becomes a solid hedge against inflation.
Freddie Mac reports an average 30-year-fixed rate of 18.45% in October (with 2.3 additional points, no less). By comparison, as of May 2012, the same 30-year loan shows a rate of 3.8% average (with 0.8 points). The points paid in 1981 are not that far off from the ENTIRE loan interest rate in 2012!
Century 21 touts a booklet on "alternative financing" in its national television ads.
Following a brutal crackdown on 1970s era inflation via extremely high interest rates, real estate once again shows its value as both a hedge against future inflation and as an income-producing investment. Interest rates ease, allowing for expanded real estate activity.
Starts a renewed steady increase in home values that goes unnoticed by most investors until well into the cycle. This cycle continues unabated for seven years.
Average mortgage rate drops below 10% for the first time ever since November of 1978 - a period of nearly eight years.
The number of new homes constructed per year drops to 1 million, which was at the time the lowest rate since WWII. This creates long unemployment lines for many construction workers in America.
The longest period of U.S. continuous economic growth in American history begins. In comes the tech stock BOOM.
After a period of slower growth in real estate and a shakeout of higher prices in certain localized markets, real estate begins a steady eight year rise assisted by the lowest interest rates in at least a generation.
Homes prices begin accelerating in the late 1990s and continue upwards to frothy levels and an eventual peak in 2006.
Minor U.S. recession ENDS - a recession that saw little negative impact on home prices. Values continue to climb.
Subprime mortgage crisis begins. House prices fall while demand slowly soaks up inventory. Many large companies on Wall Street feel the impact. The country goes into a deep recession, deemed by many as "The Great Recession," playing off the 1930's devastating economic event "The Great Depression."
The widely watched Case-Shiller Index is moving towards a year-over-year (YoY) positive change in residential prices. At the present rate, it appears that milestone will be hit in September 2012. This will be the first YoY increase in the Case-Shiller Index since 2006. April of 2012 was the third consecutive month of month-over-month (MoM) increases in the Index. Finally, after a very long price adjustment, the UPWARD cycle begins. Many experts predict home price growth for the next five years.
After six years of correction, most markets in the U.S. now find themselves suddenly in a situation of a reduced inventory of homes for sale, coupled with a pent-up demand. Builders are building again and prices begin rising yet once more. History repeats itself - as it has for generations - the upward cycle begins yet again!
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