Jason HartmanCEO of Empowered Investor and Real Estate Tools

The Insane Dynamics Of Cyclical Markets!

Name: The Insane Dynamics Of Cyclical Markets!
Uploaded: 2024-04-27T21:25:59+00:00
Duration: 58 s
Channel: Jason Hartman
Description: In this segment, Jason Hartman outlines his long‑standing framework of three real‑estate market classifications—linear, cyclical, and hybrid. He argues…

27 Apr 2024 · 1 min

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In this segment, Jason Hartman outlines his long‑standing framework of three real‑estate market classifications—linear, cyclical, and hybrid. He argues that the more cyclical a market is, the lower the proportion of homeowners who own their homes free‑and‑clear, leading to higher debt levels, greater leverage, and an elevated risk of a market correction. Hartman illustrates this with regional data: Bridgeport, CT has 34% free‑and‑clear homes, Westchester County, NY 38%, while Florida averages 46%. He contrasts these figures with less expensive, predominantly linear markets where the vast majority of owners hold their properties free‑and‑clear, implying minimal distress risk.

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Remember I've taught you for 20 years about the difference between the three major types of markets, linear markets, cyclical markets and hybrid markets. The more cyclical the market, the fewer free and clear houses, the more debt, the more leverage and the more risk for market correction is in the system. Look up at some of the expensive northeastern markets. You know, you look at the Boston area, you look at the New York area, very low numbers comparatively of free, free and clear homes. All of these. I mean Bridgeport, Connecticut 34% free and clear. Let's go down to New York. Okay, so Westchester County, New York 38% free and clear versus where I am here in Florida you've got 46% free and clear. Right. You look at the less expensive markets that aren't even hybrid that are just pure linear markets. You have got the vast majority of people owning those homes free and clear and simply very likely to ever see any, any distress whatsoever.