Get Ready for Some RE-Statements

Level 5 - Sonic Autist

Welcome Avatar! Probably knew this was coming but here is an update on the Real Estate market while we wait for people to hit the panic button. As many of you know, the typical RE cycle is explained in four steps: 1) Increase in buyers on the market which can be driven by cheaper debt, geographic migration and wage/stock increases in cities, 2) at some point the number of buyers hits a tipping point and the prices are too high vs. income generation. As this happens people who levered up too much begin to panic and list which means supply or “inventory” goes through the roof, 3) months later once levered up buyers are taken out of the market we’re in a “Real Estate” Recession and 4) once that is complete you usually form a general bottom in pricing, inventory starts a slight downtrend and we’re going back up when people say “real estate will never drive returns again”