The history of real estate cycles should inform how to analyze the market. However, there is an abundance of analysis without a review of the history, which generates conclusions that are unrelated to how the real estate market works. Additionally, symptoms are given more prominence than the causes leading investors, speculators, buyers, and sellers down a path of misunderstanding.
Below is a chart of the real estate cycle from 1870 to 2033.
For all financial markets, our primary concern is with the lows so that, in the worst case scenario, we can buy at relatively reasonable prices.
Note the publication of Roy Wenzlick’s book The Coming Boom in Real Estate in 1936. Also see our publication titled “Real Estate: The Verdict Is In” which was issued on December 9, 2010 based on the work of Roy Wenzlick.
The following chart is from our October 21, 2017 posting titled “Real Estate Review” which offers greater details on the cycle and highlights Wenzlick’s claim that at the stage in the cycle, housing price begins a phase of accelerated increases.
That phase of accelerated price increases wasn’t a concoction of superstitious beliefs, it is an established pattern throughout all financial markets in the same stage in the cycle.
Understanding the cycle helps to not arrive at conclusions which lead down a path of misunderstanding. We hope this piece will help in understanding the real estate cycle.
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