Statistical data say real estate markets are cyclical

Market cycles typically span about eight to
14 years, based on historical data, Cagan said, with the most recent real estate
pricing cycle peaking in about 1990-91. “We are well advanced in the up-phase of
the current cycle,” he said. No study, though, he said, can predict the future
of the real estate market.

“We’ll
have to see what happens. It’s clear that for the last several years we’ve been
in a positive part of the cycle,” he said, adding, Markets have a way of doing
what they want to do.”

From Inman

While most of the markets studied are
classified as either linear or cyclical, Cagan noted that several markets were
classified as “undecided” because they don’t clearly fit into either of these
categories. “Usually these have some aspects of large urban markets and some
aspects of smaller heartland markets,” he said. Salt Lake City, Utah; Seattle,
Wash.; and New Orleans, La., are among the examples of these “undecided”
markets.

“They aren’t linear,
rural markets, but they’re not as intense as places like Los Angeles, San
Francisco and New York City,” he
added.

I have not studied the data yet,
but my gut tells me that Central VA is an “undecided” market. The study is here (pdf).

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