When Should Real Estate Investors get in on the action, what’s a good market to invest in? I mean, can investors time the market? 

The answer is, that there are opportunities in every Real Estate season- Listen here for what you need to know!  

Just like weather cycles, real estate has its seasons as well. Whether it’s a positive or negative economic climate, real estate investors can deploy winning money-making strategies. The key to timing the real estate market is to always be ready with a strategy that accommodates whatever market you’re facing.

Here’s an overview of what I call the 4 main real estate cycles and when real estate investors should try to get in on the action.

 

Phase 1: Recovery

This is the first phase following a recessionary period. High vacancy rates and low prices permeate real estate markets, and if timed correctly, low-priced assets can be scooped up at a discount. This is challenging, as a recovery period still feels like a recession to many, and predicting the bottom is always a gamble.

 

Phase 2: Expansion

This is where the economy grows and housing is balanced between supply and demand. Investors are typically active during this phase as economic confidence grows.

 

Phase 3: Oversupply

This is where we see massive amounts of housing stock coming on the market, moving from a balanced market to one characterized by peak housing prices. The real opportunity here is to take some money off the table by liquidating some assets, particularly your lower producing properties or ones with larger capital expenditures on the horizon.

 

Phase 4: Recession

Typically, this real estate cycle involves overinflated growth, with rental and real estate prices dropping significantly, high unemployment, and businesses shuttering.

During the phases of Recovery and Recession, you can expect a buyer’s markets, although there are always exceptions, economic confidence is low, and therefore so are prices. This can put investors in a position of control in most transactions. When considering trying to time a real estate market, these are the optimal phases to hold most control if you’re a buyer. Real estate investors can control negotiations and dictate prices much better in these circumstances than during the expansion and oversupply phases of the real estate cycle.

During expansion and oversupply, real estate investors should prepare to be liquid and on the lookout for opportunities as phases transition. Any investments that anticipate high expenses in the future or may not be worth holding onto in the long run should be sold at a higher price at this time.

But Please remember all real estate is local. You must be intimately familiar with your local housing market and economic indicators. Building a Real Estate portfolio successfully requires a great team. If you want to start building your Real Estate Investment Portfolio or have already begun and looking to make the next move, call me for a free consultation to discuss how to maximize your investment potential.