Jerryson M. ANYAWOE Student Number:21015318
Cycles in the real estate market follow a series of phases that impact property values and
market activity. The boom and burst of the real estate market are affected by things like the
economy, interest rates, how much supply and demand there is, how investors feel, and
government rules. The real estate market goes through four phases through a period of 18
years namely: recovery, growth, too much supply, and a slowdown.
In the recovery phase, not many people are living in homes, there is some demand for
housing, fewer construction projects are happening, and rents are not increasing. However,
this is a great time for investors to buy properties from sellers who are in financial trouble or
to invest in properties that can be improved to increase their value.
The expansion phase characterized by rising demand, increased real estate costs, and
heightened building activities. more people want to rent properties, so more buildings are
occupied and the rent goes up. Investors can make money by selling properties at a lower
price or building brand new ones. Alternatively, when there is too much real estate
available and not enough people interested in buying it, the prices of real estate go down.
Investors should be careful and make sure they have enough money available. Properties
usually become more valuable during the growth phase.
The hyper-supply phase is caused by prolonged periods of excessive leading to an
oversupply of properties and subsequent downturn in property values due to decreased
demand The market has too many new buildings and renovations, so there is too much
real estate for sale. This makes prices go down because there are more buildings than
people who want to buy them. Even though it may still cost a lot to rent a property because
the economy is strong, there will be more empty properties available to rent. The number of
new buildings being built will start to decrease because there are already a lot of buildings
in the market. The period with a lot of products usually lasts a long time and happens
before the economy gets worse.
Recession marked by economic hardship that significantly impacts the real estate market.
It’s characterized by lots of properties for sale and not enough people wanting to buy them,
so the prices of real estate go down a lot. The housing market will hit its lowest point before
starting to go up again. These stages can change in length and seriousness depending on
how the economy is doing, how the market is working, and what is happening in the world
outside. During this time, many investors are buying and keeping properties, flipping
houses, and putting a lot of money into rental buildings.