Summer 2003, Vol 28, No 2

Abstract: Over the past 18 years, the author has observed patterns in large income property loan portfolios during both inflationary and deflationary investment cycles. An inflationary investment cycle is when rents-prices for investment properties are increasing in aggregate. This inflationary trend occurred in the San Francisco Bay Area Tech Boom period from 1997 through 2000. A deflationary investment cycle is when rents-prices for investment properties are declining in aggregate. There is significant evidence to support a deflationary trend in the San Francisco Bay Area investment properties commencing 2001 with a 3- to 5- year duration.