What is a Real Estate Cycle?

The difference between those that succeed and those that fail.

Over the years people have become discouraged with the ups and downs of the housing market. For some, it may seem like buying a home is forever out of reach while others are learning how to navigate the market and make a serious profit in the housing industry. The difference between those that succeed and those that fail with investing in real estate is how well they understand the real estate cycle.

American Real Estate Market

The Overall Condition of the American Real Estate Market

We have gotten used to hearing bad news about the U.S. housing market, but after five years of disappointing numbers, 2013 is revealing a light at the end of the long, dark tunnel. The prognosis for this year is optimistic if not robust, as prices have slowly begun to climb from the historic lows the country experienced when the mortgage bubble burst. This is not only good for the housing market but for the economy as a whole, as the former is inextricably linked to the latter.

A survey taken near the end of 2012 found that real estate agents and brokers agree that the positive indicators that started appearing in mid-2012 are definitive signs of an impending recovery.

The Tides are Changing

Real Estate - The Velocity of Money

This lesson is really adapted from Robert Kiyosaki's book, "Who Took My Money?" I strongly encourage investors to read this book. He writes that the Velocity of Money is the one reason why rich get richer and the average investor risks losing it all. I agree.

From Robert's book, he writes "As a professional investor, I want to...
1. Invest my money into an asset.
2. Get my money back.
3. Keep control of the asset.
4. Move my money into a new asset.
5. Get my money back.
6. Repeat the process."

Signs of A Recovering Housing Market in 2013

The housing market recovery in the U.S. during 2012 was helped by the bottoming out of home prices, record-low rates, decline in foreclosure activity and healthy rental markets. Real estate analysts are pleased with the directions things seem to be heading and are anxious to see what 2013 has in store for the industry. The following are signs of a recovering housing market.