Let's talk market cycles... The gurus at the seminar was breaking it down into three categories.
- Expansion Phase (3 to 5 years)- This the very beginning of a boom market. Its early in the phase , so most of the investors do not understand the potential opportunities. This when the money is really made and the savvy investors make their bets. The best way to track this type of market is to be on top of the market data and be able to extrapolate trends.
- Absorption Phase (4 to 7 years)- The "cat is out of the bag" This phase is when everybody is jumping in to get a piece of the Real Estate action. The builders are selling like crazy, everybody is talking about the growth opportunities.
- Contraction Phase - Market begins to shrink and happens very quickly. This phase will stay the same UNTIL something significant happens to bring it out. i.e., IBM comes to town for employment..
The gurus think that Phoenix is a couple of years into the absorption phase. Is there still money to be made? Absolutely! You just have to be careful and make sure the numbers work.
Its important to ask yourself the following questions:
- What cycle am I in?
- What's the best ways to make $$ in my market?
- How can I protect myself from contraction?