03/07/2022
Some interesting info....markets cycle always!
📉 Not if, but when
Downturns happen. Especially in cyclical asset classes like real estate.
😨 Investors are worried, with high housing costs, low supply, material costs skyrocketing, and rising inflation.
We did check on the whole inflation thing, and it turns out Janet Yellen didn't realize she was leaning on the fed's ‘turbo’ lever🎚️....oopsie.
But, given the current state of affairs, many investors have asked us......Is cereal soup? No wait, that was something else.
They're actually wondering about a downturn, and what we can all do to avoid this:
Upturning a Downturn
Although real estate is hyper-local, you can generally view it go through four distinct phases: Recovery, expansion, hyper supply, and recession.
While we are for sure not in a hyper-supply situation, one could argue we are sitting in an expansionary cycle. Albeit one marked by a certain level of exuberance, unaffordability, and expensive construction costs.
The expansionary cycle is one where job growth and the economy are strong, and therefore demand for real estate is high and prices are on an upswing.
🥳But the party will end at some point😒. Will it end with the police busting down the door and arresting everyone, or will partygoers call it in early and leave quietly? Either way, a downturn will come, and the party will end.
Are we currently in a bubble? Not in the next year at least, as supply cannot keep up with demand. Many initiatives are underway to help ease the supply side and increase densification and construction, but the cycle of development is long and logistically burdensome.
Source: Briefcase.