A Basic Understanding Of Real Estate Cycles

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A Basic Understanding of Real Estate Cycles

I am sharing my own research which, I use for my own selfish reasons I do not hold my self out as an expert. I am just a Real Estate guy, trying to feed his children!

In support of the statement above, I will readily change any and all beliefs, I have, when presented with facts, that would prompt me!

Civilization rests on change. This change is cyclical in origin. A rhythmic series of extreme changes constitutes a cycle. When a cycle has completed, another cycle is started. The rhythm of the new cycle will be the same as that of the previous cycle. Although the extent or duration may vary
R.N. Elliot


You have the...
Seller's Boom
Then the Buyer's Boom
Busts do not follow Booms, Booms follow Busts
The Buyers Side This is driven in the beginning by fear. The beginning of the buyer's side will be quite hazy, to all involved As sales volume mounts and sales prices erode, it turns to despair, then to capitulation on the seller's side On the sellers side The primary driver is greed and optimism This is an easy market This side always has a sharp quick upward value trend This will eclipse the previous value trend, as a sum

If you have a ready supply of cheap money A "Mania "may form.
What is a Mania?
An excessive or unreasonable enthusiasm Historical Examples
Mississippi Company, in the 1700's
The South Sea Company, 1700's
Wall Street Crash of 1929
Florida land boom of the 1920s
Japanese asset price bubble
The Dutch Tulip Mania's
You have to understand that sales volume on the sellers side drives prices up once Inventory is eroding. On the buyers side it drives them down. The Market is a pendulum that forever swings between unsustainable optimism, which makes Real estate more expensive And Unjustified Pessimism Which causes Real Estate to be Cheaper. The Intelligent Investor is a Realist. Who buys from Pessimists and sells to optimists Boom times are a time for Courage Bust Times are a time for Discipline By doing this you will not be swayed by the swings in the Market In the End.... How you behave is much more important than how the Markets Behave

About the Author:
have worked with the following media outlets as a subject matter expert. (General Real Estate, Real Estate Statistics, Real Estate Investing & Foreclosures): NPR, Bloomberg, Huffington Post, Wall Street Journal, NBC, ABC, Wink, Fox, Fort Myers News Press, Naples Daily News, Fort Myers Weekly, and Gulf Coast Business Journal.

I have invested in Real Estate since 1997. I have materially participate in almost every type of Real Estate Investment Transaction I person can. I have learned alot from the good deals, I have learned even more from the bad deals. I have the scar tissue to prove it!

Copyright 2008 Southwest Florida Real Estate Investment Association.
All rights reserved.



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