Jason HartmanCEO of Empowered Investor and Real Estate Tools

Linear Markets Don’t Get That Much Attention! #shorts #rei #markets #realestate #attention

Name: Linear Markets Don’t Get That Much Attention! #shorts #rei #markets #realestate #attention
Uploaded: 2023-06-26T14:42:20+00:00
Duration: 33 s
Channel: Jason Hartman
Description: In this short monologue, the speaker explains that real estate functions as a credit‑based asset class, meaning that changes in the cost of debt directly…

26 Jun 2023 · 1 min

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In this short monologue, the speaker explains that real estate functions as a credit‑based asset class, meaning that changes in the cost of debt directly affect deal dynamics, especially in cyclical markets. He distinguishes three market categories: cyclical markets (which experience pronounced up‑and‑down cycles and attract media attention), linear markets (which exhibit steadier, less volatile behavior and receive little coverage), and hybrid markets that sit between the two. The speaker notes that most of the world’s real estate operates in linear markets, while the more news‑worthy cyclical markets are concentrated in certain regions like the country’s interior and coastal areas.

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The real estate is a credit based asset class. So when the cost of debt goes up, the deal looks different. No question about it. It's more susceptible in those cyclical markets. And hybrid is the third kind, just in between the two. If you look around the world, most of the world is a linear market. Like the middle of the country and the coast are the cyclical markets. Those are the markets that get all the attention in the news media are the cyclical markets because they're newsworthy, there's something going on, they're going up, they're going down. The boring linear markets don't get that much attention.