Real estate follows four definite phases: (1) Recovery; (2) Expansion; (3) Hypersupply; and (4) Recession. In 2008, the real estate market went through the period known as the Great Recession which lasted nearly four years. In 2012, we began the Recovery phase and made the long climb out of recession. The Recovery phase is the bottom of the barrel. Occupancy rates and rental rates are low due to tepid demand.
For the last several years, we have been going through the Expansion phase. During the Expansion phase, the market is on an upswing due to growing demand. In this phase, occupancy rates and rents are on the rise generally due to a strong economy and job growth.
Due to regulatory changes in the banking industry to prevent another recession and changes in the tax code to promote economic growth, the real estate market has been on a prolonged period of expansion. How long this [Read More]