Any purchase or investment of a commodity, whether it be real estate, gold, or stocks, follows a consistent cycle with several stages (see chart: “The Stages of a Market Cycle”) that always begin with optimism. This is the period in which people are excited about buying or investing. In a strong market, buyer’s purchases quickly appreciate, which leads to stage two (2) “euphoria,” which can and generally leads to devil-may-care decision making.
At the peak of euphoria starts a downward spiral. As values start to begin depreciating, buyers go into the next stage in the cycle called ‘denial,’ which is the harbinger of fear, as values continue to abate. For some weary owners who have ‘need’ to sell, this is followed by panic, despondency, and depression. The light at the end of the tunnel is that after depression comes hope and then optimism yet again!
What is the point of maximum risk? For any investment ‘maximum risk’ is during the euphoria stage. Buyers find maximum opportunity at the lowest point, between despondency and depression. Across the nation and definitely in certain markets we are in that lowest point for some time now. If you are a buyer in today’s market, you can take a look at the market cycle chart and appreciate why now is the best time to invest.
Source: The NAR and Steve Harney, who specializes in negotiation and leadership training. He has been in the industry for more than 20 years, first in sales and then as broker-owner of a 500-associate real estate company.
For local Athens market conditions please check out www.AthensHomeTrends.com!
