Real Estate Cycles
KNOW HOW TO IDENTIFY REAL ESTATE CYCLES …
It is known in the real estate field that the evolution of prices in the dynamics of sales transactions of the sector ends up generating cyclical processes. These processes end up generating different phases of expansion and contraction of the market, knowing how to identify the moment of the cycle in which we are is an increasingly essential task, especially if it is to make real estate investments designed to achieve a return in a predetermined period.
It is a cyclical process that responds to the supply and demand of the market, which allows us to identify the best time to buy and sell or start developing projects.
The quantity of variables that determine the stage of the real estate cycle of a country is wide and the supply and demand of the area or city of interest must be determined, since it will be affected by economic, demographic, political and social variables, which in turn generate imbalances and opportunities in the market.
The cyclical behavior of the sector follows a clockwise direction, beginning with an expansive period to give way to the deceleration, then to the contraction and finally to the stabilization.
Who makes real estate investments in a professional and profitable way, is perfectly aware that excellent real estate businesses can be done even in times of crisis.
To do business in the real estate sector, it is necessary to know the appropriate strategies that allow to get the money back at any time, reducing risks and optimizing profits.
The developed world has became accustomed to cycles of boom and subsequent depression, figuring a kind of roller coaster.
Therefore, the signs should be seen as a positive indication to create a more sustainable real estate cycle than the previous ones.