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A Guide to Real Estate Cycle: Understanding the Market

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Real estate is linked to local and national economic trends also called the real estate cycle. So, whether you are planning to buy or sell, it is necessary to understand this cycle inside out to make better decisions and predict the upcoming trends. While expansion is the phase where you may note a lot of growth in the housing market, it starts shrinking during the contraction phase. The real estate market stays up or down and eventually follows a typical pattern observed over time. Here are the stages of the cycle based on which buyers and sellers should act.

The real estate Cycle

As opposed to what you think, the real estate market is not as unpredictable or volatile. A majority of trends you come across are cyclical that come and go every few years. While the annual cycles change seasonally, the economic situations refer to the mare conditions over several years. If you are planning to invest in     new housing developments Kelowna, try to develop an understanding of the cycles in the real estate market and position yourself as a buyer trying to make the most of your finances in the long and short term.

Understand the annual real estate cycle

The annual cycle in the real estate market executes across twelve months and comprises four stages relating to three seasons.

  • The first stage from January to March
  • The second phase from April to June
  • Third phase from July to September
  • Fourth Stage from October to December

Economic cycle pattern

The economic cycle pattern occurs within every few years and provides better insights onto what lies in the future.

  • The recovery phase begins after the end of recession when the demands start taking off rather slowly. The prices tend to rise gradually and most homes for sale stay vacant. For buyers, this phase may have some good signs while the sellers may start looking up again.
  • The expansion phase belongs to sellers and shows a surge in the prices and the availability of properties. For the buyer, the deals during this stage turn rather competitive.
  • The buyer’s market is when they get an opportunity to choose from a flurry of options and the power rests in the hands of buyers.
  • Finally, during the recession stage, prices decline and indicate a challenging time for sellers and buyers.

It’s hard to predict the future of those selling properties in new housing developments Kelownaand those who buy from them. Whether it is for buying or selling home, you need to do your analysis of the timing to know where the economy is heading

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