Real estate markets move in cycles driven by economic conditions, capital flows, and supply-demand dynamics. Understanding cycle position informs investment strategy and timing.
Cycle Phases
- Recovery: Rising occupancy, flat rents
- Expansion: Rent growth, new construction begins
- Hyper-supply: Construction outpaces absorption
- Recession: Falling occupancy and rents
Investment Implications
Different strategies work in different cycle phases. Value-add works best early in recovery; core stabilized assets offer protection late in the cycle.