Real Estate Cycles

Real estate cycles were identified by Economists over 50 years ago.  They are part of the what happens in competitive markets when supply and demand get out of balance.  Too much supply and the market for commercial or residential real estate, falls or decreases.  Too much demand, which can be artificially induced by government involvement or an abundance of money, and the market for real estate climbs or increases.

Real estate markets have seen increases and decreases or market cycles for many years without major disruption.  The boom of 2005 and 2006, however, created a demand that was extreme.  In Las Vegas we saw a period when there were few homes available for sale due to their being so many buyers.  Marketing time fell to a few days and everyone who had their home on the market received multiple offers.

Today we have the opposite situation with the "recession of 2008," as the real estate cycle has nearly reached its bottom.  Very few qualified buyers are in the market and the supply of homes, especially foreclosures, have swamped the market.

It is important to understand that even today's market imbalance will eventually remedy itself.  We have seen a number of real estate booms and busts over the years.  As bad as the current situation is, with major bank and Wall Street firm failures, the real estate market will return.  Some brokers predict an extended "bottom" that is unlike a normal "wave" pattern, and that scenario may prove to be true.             

Contact us with your questions or concerns regarding real estate cycles or regarding your specific appraisal assignment in Nevada at 1-702-568-6699.  We can also be e-mailed at grigdon@cox.net.  

Commercial Real Estate Appraisals in the Las Vegas & Henderson, Nevada Area.