Real Estate Cycle Theory

Real Estate Cycle Theory describes the natural fluctuations in property markets over time, driven by economic factors like interest rates, employment, and wages. These cycles typically include four phases: recovery (prices stabilize), expansion (prices rise as demand increases), peak (prices top out), and contraction (prices decline). Understanding these cycles helps investors and developers anticipate market changes, make informed decisions, and manage risks. While the timing and length of each phase vary, recognizing these patterns offers insight into when to buy, hold, or sell property for optimal outcomes.