YourHouseFast.com describes the housing market cycle and real estate stages: The housing market like most other free markets goes through a recurrent cycle over time. The housing market cycle is divided in 9 predictable stages. Those real estate stages are defined by consumers’ sentiments consensus.
The following graph describe the housing cycle and the 9 different stages:
Housing Market Cycle and Real Estate Stages via kwout
There is usually a strong correlation between the 9 consumer Sentiments and housing prices direction & sales volume.
For example the “Euphoria” stage climaxed in 2006 in most real estate markets. 2007 and first part of 2008 were the years of “Denial“. The crash in the financial markets in late 2008 put a lot of pressure on the real estate markets as well.
From a buyer’s perspective, the “Despondency” and “Depression” stages represent the strongest buying opportunity with the less risk.
From a seller's perspective, the "Euphoria" stage represents the strongest selling opportunity with the less risk.
If you have been looking to purchase or sell real estate, you may have heard the terms sellers’ market and buyers’ market. You may also have wondered what these terms mean and how each market impacts you as a buyer or seller. See MoneyInstructor.com's Basics of the Housing Market: Cycle, Home Buyers & Sellers for explanation.