The Psychology of a Real Estate Market Cycle

• Phase One - The bottom, Real estate is a bargain.
• Phase Two - Prices start to climb, buyers start to notice, demand drives prices up, real estate becomes over valued
• Phase Three - Prices peak and level off
• Phase Four - Prices begin to fall, demand falls, buyers hold off until real estate is under priced again

We are currently in the last stages of phase 4 with the National Association of Realtors predicting a bottom 6 to 9 months into 2008 and home prices will remain flat for a period of time after that. We are also anticipating that there are buyers waiting for the bottom to hit which could invigorate the market more quickly. Home builders will continue to decrease inventory so by spring of next year there could actually be a shortage of new home products for Reno home buyers. The number of builders in our area will be cut in half from what it was at the peak of the market. Reno ranks third in Nevada for foreclosures, so all those big bad foreclosure stats we keep getting for Nevada can be attributed to that real estate market on steroids in Southern Nevada.

• Reno Real Estate

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