Current real estate cycle in chart vs. actual historical data

13 Replies

Below are two charts, a general real estate cycle chart (from eric fernwood), which a normal real estate cycle goes through. The other is Case Shiller index top 20 largest metros (home appreciation) for past 30 years of historical actuals.

Notice anything?

Terry

Very interesting. But I wonder if these 20 largest metros don't really go through all of these cycles.

For example, in SF during 2008 the prices of homes did not even drop. They actually stayed the same. 

@Antoine Martel

@Eric Fernwood

I think all markets go through this cycle. It is just a matter of time, meaning SF will but do to their strong economy, high paying jobs, and low inventory, the time will just take longer. But the cycle will happen. The Cash Shiller index is averaged over 20 cities, SF might be the outliner for the time being. For example, when the jobs go down or layoff in SF in 2008, slight dip in prices but not much compared to say Las Vegas.

Terry

Originally posted by @Terry Lao :

@Antoine Martel

@Eric Fernwood

I think all markets go through this cycle. It is just a matter of time, meaning SF will but do to their strong economy, high paying jobs, and low inventory, the time will just take longer. But the cycle will happen. The Cash Shiller index is averaged over 20 cities, SF might be the outliner for the time being. For example, when the jobs go down or layoff in SF in 2008, slight dip in prices but not much compared to say Las Vegas.

Terry

 Understood. I like it man, thanks for sharing. 

@Antoine Martel

Here's another bit. My brother lives in SF, near Lake Mead. In 2008, I noticed that his area did not really take any major hit to home price, maybe stayed same or bit lower, during the recession that hit silicon valley. After 2011, market just took off in all bay areas to the point where you are now. 

Las Vegas took the brunt of the recession in 2008. Only now, starting to come back with a vengeance. \

If you took away, the high and low cities, the graph above will look even closer.

Terry

Thanks for sharing Terry!!

@Antoine Martel

Here's another example of charts lines for SF bay area vs. Las Vegas. It is my attempt at crayon drawing of cycle. Both have the same cycle, but time plays a factor.

Terry

This post has been removed.

Originally posted by @Terry Lao :

@Antoine Martel

Here's another example of charts lines for SF bay area vs. Las Vegas. It is my attempt at crayon drawing of cycle. Both have the same cycle, but time plays a factor.

Terry

 Beautiful drawing! haha.

It also shows that one market can be more affected by the cycle than another. And some cycles are more boom and bust while others are more stable. 

Time to review where my post 7 months ago on real estate cycle. 

Based on below article, looks like still in growth stage. Notice the line curve is similar to my initial chart. 

In hindsight, I thought maybe flatten out on growth, but in actuality, the grow in Las Vegas, really took off. Sorta like on steroids. Today, the LV market is red hot as compared to 7 months ago only hot. The cycle that best describes this cycle is still GROWTH. The next stage is SATURATION/decline, but no indicators we are there.

Terry

http://luisdanielroque.blogspot.com/2017/10/the-4-...

Originally posted by @Terry Lao :

Time to review where my post 7 months ago on real estate cycle. 

Based on below article, looks like still in growth stage. Notice the line curve is similar to my initial chart. 

In hindsight, I thought maybe flatten out on growth, but in actuality, the grow in Las Vegas, really took off. Sorta like on steroids. Today, the LV market is red hot as compared to 7 months ago only hot. The cycle that best describes this cycle is still GROWTH. The next stage is SATURATION/decline, but no indicators we are there.

Terry

http://luisdanielroque.blogspot.com/2017/10/the-4-...

I saturation only happens if builders can keep up with demand I suspect demand is still FAR greater for new construction and that part of the cycle is just starting.  remember 2 years ago it was near impossible to get spec loans.

Also, the Las Vegas SFR median home price, seven months ago was $261k. The current month, May'18, the median SFR was $295k, an 34k increase and 13% increase.

Below is my forecast for remainder of year, and nothing in horizon that would say will  slow down. Thus, growth stage is in hyper mode.

Terry

@Jay Hinrichs

Nice hearing from you. Saw you on a few other posts.

Are you saying that saturation cycle is just starting? I don't even see anything close to that until end of the year.

Terry

Hindsight is 20/20. Looking back seven months ago vs. today, gives investors an idea what to do the next seven months. Questions that come to mind are: If I bought seven months ago, where would I be today. If I thought that way seven months ago, how does that influence the next seven months.

Many forum posts are many months old, and only a few gets updated, but most are just forgotten unless there is an update on a old post. 

There are many old posts that talk about the next recession, and that was over two years ago. Today, I would say not even close to a recession. 

Terry

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