How long does a poor Real Estate market cycle typically last?

Answer 1

The two most recent poor Real Estate cycles averaged 9 years and below is a chart which explains breaks out differing intervals.

That being said, I took the liberty of explaining why I do not believe in the myth of a nationwide housing bubble.

The real-estate cycle in the U.S. can be summarized with the following table:

Peaks in Interval Peaks in Interval Depressions
land value (years) Construction (years) interval
1818 -- -- -- 1819 --
1836 18 1836 __ 1837 18
1854 18 1856 20 1857 20
1872 18 1871 15 1873 16
1890 18 1892 21 1893 20
1907 17 1909 17 1918 25
1925 18 1925 16 1929 11
1973 48 1972 47 1973 44
1979 6 1978 6 1980 7
1989 10 1986 8 1990 10

Popping the Real Estate Housing Bubble.

Buyers tend to get spooked by the idea of purchasing a home because of the incorrect information and ideas set forth by the media.

When itcomes to buying vs. renting, many people find themselves on the fence at decision time. They don’t need any
additional excuses not to buy, particularly myths that have been hyped into a perceived reality.

Are some coastal and resort markets over-heated, yes. I don’t feel that markets will collapse. But investors and property owners
should be ready for longer market times, diminishing over full-price and multiple offers in over-heated markets.

Prices could plateau, and appreciation levels will hover at more historical levels. If you live out of town from whereThroughout our lives, we have heard the many myths that keep us afraid to eat Pop Rocks and drink Coke at the same time, pump gas for fear of hidden syringes infecting us with a deadly disease, and wake up in a bathtub of ice with a kidney removed. Add to those the myth of the “housing bubble,” and your repertoire of urban legends is complete.

Housing is not tied to mortgage rates, the media is ultimately behind the theory that a housing bubble even exists. Housing is not a stock. If someone sells a house, he still has to buy another house. Houses remain 80 percent occupied.

Newsprint, national magazines, and even CNBC have dedicated significant space and airtime to the premise that housing prices
are going to take a hit. Those who believed the rumors may now be sorry. It’s all about the simple rules of inventory: supply and demand. The real determiner of how well the housing industry is fairing is employment. Currently, the job market is strong and favorable. You can expect to see the level of appreciation taper off to a more modest 5 percent to 7 percent from recently higher levels. Even if interest rates were to spike one full percentage points, an unlikely event in any scenario, the average impact to mortgages would be $32 per week after tax considerations (not enough of a deterrent to prevent home buying).

If you purchased property on appreciation speculation, I would keep in very close contact with a unbiased professional in the market, daily.

For homeowners and investors who feel they must protect themselves from a potential bubble, Look for incentives by
builders on completed new construction buildings or homes; this indicates an over-supply of new units. Research days on market or the length of time of property has been on market. If the typical time recently has been 30 days for sold properties and current market times for the majority of sold properties are 60 or more days, the market is softening. Home prices and mortgage rates affect each other. The more interest rates drop, the more buyers can afford to pay for a home. But as rates rise, buyers can afford less of a purchase price. Watch interest rates as an indictor of deflating prices.” It’s all about the simple rules of
inventory: supply and demand. The real determiner of how well
the housing industry is fairing is employment. Currently, the job
market is strong and favorable.

Answer 2

The real estate market changes daily. It overall runs in cycles, usually a few years at a time. Depending on the area it may run radically up and down (like California) or be relatively stable (like the mid-south or mid-west).

The law of supply and demand rules prices, as does location rule demand. Price will overcome almost everything. But when demand changes areas either gain or loose value. The New England states are loosing out as taxes and better weather elsewhere become more attractive places to live.

The sun belt states are gaining population rapidly and 7 of the top 10 states have no income taxes at state levels.

Answer 3

Buyer's markets like we have currently do not last long. 2 years is an eternity for buyer's markets. Most peak for only a couple of months.

Answer 4

real estate cycles go in 20 year spans

Answer 5

Each area is different.

Keep in mind...........

Times and markets are changing!

In California with average homes selling well over $500,000, a 20% decline is $100,000! In any market 'timing is everything'! So, could you afford a loss of 25% of your investment all because of poor timing???

This last up cycle was 10 years in many parts of the country. The downcycle now started in CA, Wash DC, NYC, Vegas and other hot areas of the past are all soft and getting softer.

From 1990 to 1996, the average home in San Diego lost 20% of its' value! The cycle we are now enterng looks like it could well exceed that on the downside!

With all the 100% financing, interest only loans, EZ qualifing etc...even a slight decline will cause many to be unable to sell for the amount due on their loans!

For some great 'insider' articles on the San Diego real estate market, which I believe will apply to any of the hot real estate markets of the past five years.....visit:

Times and markets are changing!

In California with average homes selling well over $500,000, a 20% decline is $100,000! In any market 'timing is everything'! So, could you afford a loss of 25% of your investment all because of poor timing???

This last up cycle was 10 years in many parts of the country. The downcycle now started in CA, Wash DC, NYC, Vegas and other hot areas of the past are all soft and getting softer.

From 1990 to 1996, the average home in San Diego lost 20% of its' value! The cycle we are now enterng looks like it could well exceed that on the downside!

With all the 100% financing, interest only loans, EZ qualifing etc...even a slight decline will cause many to be unable to sell for the amount due on their loans!

For some great 'insider' articles on the San Diego real estate market, which I believe will apply to any of the hot real estate markets of the past five years.....visit:

http://www.brokerforyou.com/brokerforyou
http://www.downtown-san-diego-real-estate.com/san-diego-real-estate-article-index.htm
http://www.brokerforyou.com
http://www.san-diego-for-sale-by-owner.com
http://www.la-jolla-ca-del-mar-san-diego-real-estate-encinitas-california.us
http://www.brokerforyou.com/blogger/index.html
http://san-diego-coastal-real-estate.blogspot.com
http://sandiegofsbo.blogspot.com
http://downtown-san-diego-real-estate-views.blogspot.com
http://san-diego-coastal-real-estate.blogspot.com
http://sandiegofsbo.blogspot.com
http://downtown-san-diego-real-estate-views.blogspot.com
http://www.brokerforyou.com/san-diego-real-estate-sales.html
http://www.poway-real-estate.info
http://www.del-mar-real-estate.info
http://www.la-jolla-real-estate.info
http://www.los-angeles-real-estate-brokers.com
http://www.san-jose-real-estate-brokers.com
http://www.orange-county-real-estate-brokers.com
http://www.san-francisco-real-estate-brokers.com
http://www.sacramento-real-estate-broker.com

Answer 6

That is undeterminable. Mine has lasted a full year now. Minneapolis!