4 Phases Of The Real Estate Cycle-Where Are We Now?
Q: Gerald, my best friend got burned when real estate prices fell 10 years ago and I’m worried. Where’s the market now and is there a threat of another bubble? Frank, Park City, UT
A: Frank, every local real estate market is different so I’m always reluctant to over-generalize, however, things are different than they were 10 years ago. In the last real estate market downturn, there was a real estate bubble and a credit bubble that burst and caused financial havoc. I am going to share with you the four phases of the real estate cycle and where most real estate markets in the US are now.
There are four phases to the real estate cycle: 1. Recovery, 2. Expansion, 3. Hypersupply and 4. Recession. One of the unique aspects of real estate is that people can succeed in all four phases of the real estate cycle as long as you know where you are in the cycle.
Again, the 4 phases in the cycle are:
- Recovery
- Expansion
- Hyper Supply
- Recession
Most local US markets now are in the expansion phase of the real estate cycle, but it’s essential to focus on the specifics of your local real estate market, because real estate is local phenomenon more than it is a national phenomenon.
Thanks for your question, Frank. Good luck.
For more real estate tips and information visit my blog at geraldlucas.com.