The wheels on the real estate bus go round and round. You know it’s true. Like most things in life, the real estate business and market is a fluid environment. It is cyclical. Things are always moving. Look into the history books and you’ll see that when it comes to real estate, what goes up comes down. The opposite is also true.
This business revolves as it evolves. That’s important to know if you want to be a successful survivor in the business. Market movements are something we need to get used to and get prepared for.
Perhaps it’s best to recognize the real estate cycle as a bell curve instead of viewing the business as a circle. The markets level off, move upward, level off again, and then they recede. Then the cycle repeats. So, when things are a little slow, prices have stopped rising or it’s harder to get loans; don’t panic. It is all part of this industry.
Investors that do their homework and prepare for the inevitable cycles, do well. This is true in the residential single family detached sector as well as the commercial or investment markets. As you can imagine, investors who made bad decisions or who are unprepared, are paying the price. That’s what happens when you make risky decisions. Sometimes education is very expensive. So get used to it. It’s all part of the business.
But, it’s not all bad news. What is now tough will get easier. What is now down will go back up. What is now slow will speed up. Like always, the market will make the inevitable turn. Smart investors are prepared for the cyclical movements, those unprepared are learning a valuable (and expensive) lesson that is hard now, but will serve them well during the next cycle. If we make it our goal to understand the business by tracking industry movements, analyzing individual opportunities and managing for long term success; real estate can meet all of our goals. It is a business and must be treated as a business with all the requisite planning, budgeting and preparation. The greater our level of professionalism; the greater our success. Good luck. We’d be glad to help when we can.
{ 4 } Comments
Yes, I suppose the thing to bear in mind is that in the long long term, it always goes up.
I think the property market it looking fairly dismal in US at the moment.
The question to ask is how long does it take to do one full cycle. It could be 10 years, which is quite a long time in a person’s life.
The good thing with globalisation is that there are lots of different property cyles, so there is always somewhere on the up, you just need to be confident about buying abroad.