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  • Writer's picturemhpaugusta

When Will The Madness End??

Spring sales are coming friends! We are definitely still in a fast moving market. To date, we have experienced 46 months of an aggressive seller’s market. A seller’s market by definition is an economic situation in which goods are scarce and sellers can keep prices high.

At this time, I am seeing the most desirable homes selling for approximately 10% over the list price in the CSRA. Keep this in mind as spring fever hits and you are buying or selling a home.

Undoubtedly, the most common question everyone is thinking, is how long will this last and when can we expect a shift or some type of relief from the insanity. This question led me to do some research, which led me to a super interesting concept known as the property cycle.

According to Wikipedia, a property cycle is described as a sequence of recurrent events reflected in demographic, economic and emotional factors that affect supply and demand for property subsequently influencing the property market.

A property cycle consists of basically three common or predictable phases. A boom, a slump and then a recovery. I think the most interesting thing about this cycle is it historically happens within an average of an 18 year period! So that leads to another question. Where are we at in this18 year cycle?

Some of us are old enough to gauge where we may be based on history. I think we can all agree the “slump” was back in 2010-2016ish. Which would mean the boom preceded it near 2003-2009ish. I remember these years and how hard it was because there were multiple offer situations and it was a seller’s market, but it was pretty confined to specific locations and price ranges. It definitely was not nearly as outrageous as what we are experiencing today.

That equals out to about 13 years of time. This means 2017-2022 is essentially 5 years in the recovery phase. If, and I truly mean a HUGE IF, 18 years is an accurate representation of this cycle, then we should be starting a new boom cycle, one that has proven explosive.

While I am not able to predict the future, I will leave you with this very encouraging statement I read on the while researching the 18 year cycle. “Importantly, each cycle starts from a higher “bottom” than the previous one – so the long-term trend is always upwards, even though there’s a lot of volatility along the way.”

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