Understanding Real Estate Market Cycles: When to Buy, Sell, or Invest - Hunter Gore

The Real Estate Market Cycle

• Expansion – A Growing Market
  Signs: Rising home prices, increased construction, low interest rates, and high buyer demand.
  Tips: Buyers - Act quickly, lock in a good mortgage rate. Sellers - Sell now to capitalize on high property values. Investors - Good time for rental property investment.

• Pickup – The Market Reaches Its Height
  Signs: Stabilized or slightly declining property values, high home prices, and a plateau in new construction.
  Tips: Buyers - Be cautious about overpaying. Sellers - Sell now to capitalize on high property values. Investors - Cash-flow properties rather than speculative investments.

• Contraction – Slowing Market Growth
  Signs: Increased days on market, price reductions, rising interest rates, and more properties for sale than there are buyers.
  Tips: Buyers - Price softens, negotiation power increases. Sellers - Be prepared for a longer sales process, consider pricing competitively. Investors - Discounted properties and foreclosures.

• Recession – Market Bottoms Out
  Signs: Low home prices, high inventory, fewer sales, and often higher interest rates.
  Tips: Buyers - Opportunity to buy at a low price, seek out motivated sellers. Sellers - Hold off selling, if possible, until the market begins to recover. Investors - Buy properties at a discount.

• Recovery – Market Begins to Rebound
  Signs: Steady price increases, reduced inventory, more buyer interest, and an increase in new listings.
  Tips: Buyers - Early in this phase, purchase at a low price. Sellers - Re-enter the market, prices and demand are climbing. Investors - Properties with appreciation potential, rental properties can perform well.