Recently, we talked about market cycles in the real estate market. And we’ve also talked a bit about whether or not there could be a bubble. While these are higher level investing concepts, they’re important pieces to the puzzle. And this is especially true if you’re a real estate agent or investor.
And with my upcoming real estate investing books on the way, I wanted to share more on this topic. After all, by building a multi-million-dollar investment portfolio, I’ve gained a wealth of real-world insight that can be truly beneficial for anyone headed down the path of financial freedom. But today, I want to ask you, what phase of the market do you think we’re in right now?
A quick look at real estate market cycles
If you recall from our previous talk, market cycles are one concept that has treated me well during my investing career. Although it’s not the only tool we use when it comes to real estate investing, it’s certainly a helpful one.
For real estate and other investment-related markets, there is a natural cycle to the market. Once you know about it, you’ll start seeing it everywhere. For our purposes, the market cycles are a declining market, an absorption phase, and an expansion. While there are nuanced aspects of each one, the main idea is simple: people naturally go through phases of fear and exuberance that affect the market.
Putting it all into perspective
Still, different markets might have cycles that look different. As I coach real estate agents or investors, I often point out that this fact makes experience so important. After all, although skills can transfer to a different market, how the cycle plays out in California differs from North Carolina. A savvy agent or investor is aware of this fact, and quickly adjusts their approach, as well as relying on their other tools.
At the same time, the nation and even the global markets today have their own cycles. In our hyper-connected world, I coach investors and agents to keep their ear to the ground. Your market can be impacted by interest rates in Europe almost as much as a new roadway project opening up an area.
Your assessment of the present market
Even though it’s not possible to predict the future, our job as investors and agents is to harness the trends and the cycles. And when you think about it, our friends, family, and neighbors rely on us for our expert advice. This is one of the reasons that I take my role as a real estate agent, investor, and real estate coach so seriously. By using the idea of market cycles, you can help them to better understand what they too are seeing all around them in the market. Your assessment really is that important!
But I want to hear from you. What’s your assessment of your local and regional markets?
Terry Records
Broker/Owner
Records Results Real Estate
Residential Sales and Property Management Service