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Black Monday Reflections, and Portland Housing

Thirty years ago today, October 19, 1987, the stock market fell 23%, the largest single day loss in history. The equivalent today would be a 5,300 point drop in the Dow Jones Industrial Average.
So where do we stand now in comparison to 10/19/1987?

  • The DJIA has risen from 1,783 to over 23,000, a thirteen-fold increase.
  • Portland housing prices are now 433% above their October, 1987 levels.
  • Median income for a family of four has gone from $32,900/year to $74,700/year, a 127% increase
  • Thirty year mortgage rates have gone from 11.26% then to 4.16% today, 37% of what they once were.

In terms of housing affordability, a family of four earning the median income in 1987 could not afford a median priced home in Portland.

Now, that same family earns 6% more than needed to afford a median priced home.

Home prices have risen far more than incomes, yet interest rates continue to make homes more affordable now than in 1987.

Just something to think about.