Real Estate Markets Are Traditionally Cyclical.
January 16, 2013
Real estate markets are traditionally cyclical. During times when prices and activity are rising, you pay hear folks voice the expectation that prices will continue to increase. This last downturn perhaps reminded us that real estate market ARE CYCLICAL.
If you read or listen to the media, you will see that they believe that this down cycle is over and that prices are poised to rise. I am in agreement that we are turning a corner and the supply and demand factor is creating an environment in which buyers are willing to pay above the listed price. Once lenders get on board we will probably see a rise in value.
The unknown factor in the immediate future is still the many homeowners who owe more than the market value of their property. This factor may be what is responsible for our exceptionally low inventory of homes for sale. Typically, when a cycle makes an upward turn, the rise in value is relatively moderate. It is only as we reach the end of the upward cycle that we have seen the big jump in prices. (It seems that after several years of an up trending market, folks again believe that prices will continue to rise forever.)
As yesterday's post demonstrated, Americans still want to be homeowners and still believe in the long term value of homeownership. For the present, this is the best part of a real estate cycle in which to purchase a home - no longer moving down and gradually moving up.
Real estate markets are traditionally cyclical. During times when prices and activity are rising, you pay hear folks voice the expectation that prices will continue to increase. This last downturn perhaps reminded us that real estate market ARE CYCLICAL.
If you read or listen to the media, you will see that they believe that this down cycle is over and that prices are poised to rise. I am in agreement that we are turning a corner and the supply and demand factor is creating an environment in which buyers are willing to pay above the listed price. Once lenders get on board we will probably see a rise in value.
The unknown factor in the immediate future is still the many homeowners who owe more than the market value of their property. This factor may be what is responsible for our exceptionally low inventory of homes for sale. Typically, when a cycle makes an upward turn, the rise in value is relatively moderate. It is only as we reach the end of the upward cycle that we have seen the big jump in prices. (It seems that after several years of an up trending market, folks again believe that prices will continue to rise forever.)
As yesterday's post demonstrated, Americans still want to be homeowners and still believe in the long term value of homeownership. For the present, this is the best part of a real estate cycle in which to purchase a home - no longer moving down and gradually moving up.
posted by shirley harry at 9:36 AM
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