What is a recession in the real estate market?



What is a recession in the real estate market?

A recession generally comes at the end of a real estate cycle, followed by a recovery period. During the recovery period, the market is usually at the lowest point in the cycle, with low rental rates and low occupancy rates, due to declining demand for real estate.

What is the real estate cycle?

What Is The Real Estate Cycle? The real estate cycle is a four-phase series that reports on the status of both commercial and residential real estate markets. The four phases are recovery, expansion, hyper supply, and recession.

Is your property in the recovery phase of the real estate cycle?

As an investor, you should determine if your property is in the recovery, expansion, hyper-supply, or recession phase of the real estate cycle. Doing so will allow you to make a more accurate assumption for the length of time the property must be held and the proper exit strategy to take.

Is the recession cycle a single cycle or a continuous cycle?

Depicted above is a single cycle. The end of the recession phase connects to the beginning of the recovery phase to form the continuous wave pattern. As we begin, I want to give special thanks to our friend Dr. Glenn Mueller of the University of Denver for his thought leadership in this space.