{"id":316,"date":"2008-09-18T16:44:42","date_gmt":"2008-09-18T16:44:42","guid":{"rendered":"https:\/\/bhgrealestateblog.com\/?p=316"},"modified":"2024-12-30T14:51:56","modified_gmt":"2024-12-30T19:51:56","slug":"market-phases","status":"publish","type":"post","link":"https:\/\/bhgrecareer.com\/bebetterblog\/market-phases\/","title":{"rendered":"Market Phases"},"content":{"rendered":"

<\/a>Posted by Nicolai Kolding<\/strong><\/p>\n

In trying to decide how to respond to the Merrill Lynch, Lehman Brothers, and AIG debacles<\/a>, I’ve concluded that the best answer is to remind all of us to focus locally, where real estate really matters.\u00a0 This isn’t to say that the news isn’t important but (a) this shall pass<\/a>, and (b) I believe the men and women who are on the front lines each and every day are better served focusing on the forces that they have some control over.<\/p>\n

The basic question that\u00a0everyone is asking is, “Where is the market headed?”\u00a0 Any broker or agent who tries to answer that one had better know his or her market inside and out.\u00a0 And if you believe that real estate is cyclical, then understanding what phase of the cycle you’re in is critical.<\/p>\n

There are a number of different takes on\u00a0this, but here is one version of\u00a0the\u00a0phases of a typical real estate cycle:<\/p>\n

\"\"<\/a><\/p>\n

<\/p>\n

Note that sales price movement generally lags behind\u00a0transaction sides.\u00a0 The first indication of a softening market is typically when sides slow while price continues to climb.\u00a0 Eventually, both price and sides\u00a0are in decline (and, as we all know far too well, the transition from Phase III to V can be very rapid in some markets).\u00a0 Typically, the\u00a0recovery is driven by transaction sides, not price.\u00a0 Although extraordinary factors can move a market “back” a phase, this flow is fairly typical.<\/p>\n

Of course, the rate of change and the length of time in each phase is completely different from market to market and from cycle to cycle.\u00a0 The key to everyone in the industry is knowing where you are and, then, what to do and say.<\/p>\n

Every agent and broker should know at all times which phase his or her\u00a0 local market<\/em> is in.\u00a0\u00a0 It takes no time at all to pull the basics needed:\u00a0 be sure you know your total market transactions\u00a0and sales volume in monthly segments going back as far as you can.\u00a0 Define your<\/em> market by carving the data as needed (in other words, if you’re serving only a certain price point or neighborhood, focus your study there).\u00a0 Plot it out in a table or graph it so you can better see what’s going on.\u00a0 Then study the current state of sides, sales price, and inventory versus prior periods\u00a0to spot the trends and determine which phase you’re in.<\/p>\n

Have a specific game plan for each phase as well as a communications plan to educate your customers.\u00a0 Be ready with the statistics and share them.\u00a0 Be the local market leader in distributing and deciphering\u00a0these figures.\u00a0 With knowledge will come confidence and you may in fact help, in at least a small way, to shape the direction of the market.<\/p>\n

\n

\n

Some time in the not-too-distant future, I will post another crossword<\/a> (or something similar).\u00a0 If you’re the competitive type and want a free hint or two (including what date and time it will post), be sure to sign up on Twitter<\/a> and follow the brand<\/a> and me<\/a>!<\/p>\n

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\n","protected":false},"excerpt":{"rendered":"

Posted by Nicolai Kolding In trying to decide how to respond to the Merrill Lynch, Lehman Brothers, and AIG debacles, I’ve concluded that the best answer is to remind all of us to focus locally, where real estate really matters.\u00a0 This isn’t to say that the news isn’t important but (a) this shall pass, and […]<\/p>\n","protected":false},"author":181,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[181],"tags":[8881,23801,25731,26691,33981,44381],"class_list":["post-316","post","type-post","status-publish","format-standard","hentry","category-real-estate","tag-communications","tag-lehman-brothers","tag-market-transactions","tag-merrill-lynch","tag-real-estate","tag-twitter"],"yoast_head":"\nMarket Phases - Better Homes and Gardens Real Estate Be Better Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/bhgrecareer.com\/bebetterblog\/market-phases\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Market Phases - 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