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Historic Parabolic Move

May 5, 2020, well into the shutdown, you heard it here first. Reporting on what turned out to be the exact low (in my April 2020 Broker’s Take on the April 2020 market), this rapporteur said, “with the pending median $920,000 higher than April’s print prices should rally soon.” Then 4 months later on September 17th I said, “if Laguna Beach real estate was a stock, I would say it is about to go parabolic.”


Evidenced by the 1-month, 3-month, 6-month, 12-month, and yearly price charts – starting on page 5 – that is exactly what happened.


What now? And is this parabolic move different?


I will never forget the 1989 spike and the subsequent crash the following year. Classic manic buying was followed by a cacophony of economic dislocations the next year: interest rates between 12 and 14%, the Savings and Loan Crisis, and a recession. The market did not start going up again until 1997.

Then in 2007 – after appreciating two-fold - the mortgage market seized up and we had the sharpest economic implosion since the 1930s. Not surprisingly, prices crashed again.


I am not saying this time is different, but the foundation of this 2021 market is solid: we did just come out of a mini depression, the government is throwing trillions of dollars into the economy, mortgage underwriting is solid, and mortgage rates are well below 3%.


No matter your outlook, call me for all your real estate needs. Stay safe and have an excellent August.