How is the business cycle and real estate cycle related?

Answer 1

Both are stong indicators of consumer spending and signal the level of circulation of money in the economy. When either of these cycles are high, it shows the consumer confidence is fairly high which increases spending in both whereas when the trend is down, consumer confidence is lower and people are saving more than they are spending....

Answer 2

I would say yes. Inflation and disposable income I think have a direct correlation with housing prices, especially luxury situations.

On the other hand, there will likely always be a baseline for a starter home that is directly based on inflation and cost of materials and labor. It will also be directly affected by the supply and demand aspect of how many houses are available to purchase for how many buyers there are. When there are more buyers, the market will rise. When buyers drift, the market drops.

Look at Schenectady NY. In the mid 1990s, GE closed the turbine plant there and 4,000 jobs left town. The turn of the century townhouses that were stongly selling for $100k at the time dropped to $40k in months. That devaluation was effectively permanent since what were nice neighborhoods turned into lower income housing overnight.

Answer 3

Both are affected by interest rates.

Low rates: Real estate sells high, new cars sell, used cars lose value and don't sell. Businesses can borrow more money to expand.

When rates are high, used cars sell more... everything else... oh yeah: inflation slows down! woot

Answer 4

he will take in as a lot as every person, and doubtless more beneficial than maximum, yet he will do it circuitously, through regulation companies and different businesses that foyer quite than from man or woman lobbyists. i guess you have to be a lawyer to be certain the variety. it really is why i'm with the help of vote casting for attorneys, era!