Similar to how seasons cycle in a year the real estate market enters a similar cycle too!
At the start of 2022, rates were still low, values were peaking, real estate was fun, and everyone was crushing it and making money. People new to real estate thought this would last forever and that real estate was a way to make easy money.
Then, the Feds came in and crashed the party with higher rates.
For most businesses, they fell off a cliff.
We were all hoping this would be short-lived. But now we are in 2024, and rates are still high and business is hard!
For anyone in real estate right now, the market is challenging. Most are starting to ask if is it going to stay like this forever. Are rates ever going to go down? Is inflation going to be high forever? Will the Feds ever pivot? And the list goes on…
Just as they thought rates would stay low forever and the market would keep going up.
Real Estate Cycle
When we are in the beginning/middle/end of any market we start to have these conversations with others and ourselves that things will never get worse or get better. Then we start to make decisions based on those beliefs. And sometimes, that can get us into trouble.
When the market is good, we might buy shit we don’t need, over-leverage, get lazy, think we are the smartest in the room, and think the good times are here to stay.
When the market is bad, we start to sell or wonder why we bought the shit we don’t need. We get mad that we overleveraged, we think that maybe we were not so smart, and we start to realize we have to work much harder for that dollar and we think is this ever going to get better again?
When you are new to real estate, it is very hard to see past the cycle you are in and have the confidence to know what will happen. Heck, lots of people by now have already quit the business and moved on to a new industry or job because they need to make money and it’s too hard in real estate.
Sticking it out!
For the seasoned people willing to stick it out and look beyond the cycle they are in. They understand that things do typically turn around. The real estate market has cycles and they understand the opportunities ahead. They know that it is much easier to stay in the real estate game/business. Just like in 2022, the seasoned people knew the cycle would change, something would make it change. And guess what? They’ve already started to prepare for this. For me, I started to talk about this in 2020 and knew this would only last so long and I was getting prepared in many ways.
Those who can see past the current cycle, figure out how to keep growing in a cycle, or just survive will always reap major rewards when things circle back around. The biggest issue for most is not being prepared to make it through a down cycle when times are good. The good news is, if you make it through one down cycle, you usually learn your lesson and gain that wisdom for next time.
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