In this instructional video, seasoned broker and investor Joe Homs breaks down the four multi‑year cycles that define the U.S. real‑estate market—Recovery, Expansion, Hyper‑Supply, and Recession. He uses the 2008 financial crisis as a concrete example of the Recovery phase, explains the current 2021 market as an Expansion phase marked by low interest rates and aggressive bidding, describes the upcoming Hyper‑Supply phase as a period of excess inventory and falling prices, and outlines the Recession phase as a bubble burst that creates deep buying opportunities. Throughout, Homs offers practical guidance on when to act aggressively (buying distressed properties, flipping, or bulk purchasing) versus when to be conservative (list at market‑bearable prices, avoid overpaying). He emphasizes the importance of tracking supply‑demand dynamics, interest‑rate trends, and market sentiment, while acknowledging that no one has a crystal ball. The video concludes with a call to action for viewers to subscribe, watch related content on adding value to investments, and reach out with questions.
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In today's video, I'm breaking down the 4 cycles of the real estate market so you know when and what to buy to make the most return. Coming right up. Real estate regularly goes through multi-year cycles. These cycles can be broken into 4 periods: recovery, expansion, hyper-supply, and recession. I'm going to break down the 4 cycles for you so you can understand when you need to be more greedy or more conservative when purchasing. Thanks for stopping by today. It really means a lot. I made this channel from my 40 years of experience as a broker, mentor, and investor. Whether you are a new or experienced investor, make sure that you subscribe and create the life you've always wanted through real estate. When people say the real estate market That's just a phrase they use to talk about the supply and demand in real estate. One of the phases is called the recovery phase. And in this phase, what's happening is we've hit the bottom and we're coming back out. I would say 2008 is a great example of what the recovery phase is. And this is the perfect time for you as an investor to jump in. As people are running out the door selling their properties, short sale or distressed sales, you should be running in to purchase these properties. Whether you're going to hold on to them as a buy-and-hold investor or whether you're even going to go in and start flipping these properties. Because remember, you can flip in any type of market, whether it's up at the top Or down at the bottom. It's all about a numbers game as far as flipping goes. And if you can sell it at a certain price and you bought it really low, you'll be able to buy multiple of those properties. As the market goes back up and you hit the top, you're going to buy probably half as much as you did at the bottom. So this is what's called the recovery phase. The next phase I want to talk to you about is called the expansion phase. And this is very similar to the phase that we're in right now. The market's gone up since 2008. Here we are 2021, and the market is absolutely crazy. We've got multiple offers on properties, removing contingencies, whether it's appraisal or inspection contingencies, and people are literally putting bids $50,000, $60,000, sometimes $70,000 over the asking price. So that's kind of where we're at right now. Everybody's rushing in to buy something before whatever it is going to happen happens. I think a lot of this has to do with the low interest rates, and as long as they're low, this will continue to happen. And we may even go into a hyperinflationary time, which we had in the '80s. So be careful what you're doing right now. Whether you're going to be an investor or a homeowner at this point in time. The next phase is called hypersupply, and it's, it's really just a down market is a better description for it. And so as more properties go on the market, remember we're supply and demand economy. So as more properties go on to the market, And then you have less buyers, then that's going to be a big, big downward trend on the prices of the homes. And what usually happens, because I've been through this cycle before, is you have a seller up here at $1 million and it just starts going down. And you have a real estate agent saying, list it at $900,000. No, I know better than you. Let's list it at $1 million. And what happens is, as The market goes down, they're literally just going down with the market. So they're dropping it down to $900,000, but by that time the property is only worth $800,000. So they're literally just following the market down at that point in time until they realize that they have to listen to their real estate agent, sell it at the price that they're recommending, which is what the market will bear, and get out. The last one, number 4, is the recession. Are we even headed to a recession? Recession basically is a bubble, a bubble that bursts. In my lifetime, I've lived through 3 bubbles in my lifetime. So are we due for a 4th? Maybe later on a 5th? Is this a pattern that continues to go on? Recessions are sometimes predictable, sometimes not. I was pretty good in predicting 2008 and taking advantage of that at the time. And so when I was buying my buy-and-holds at the time, they were worth about $500,000 for a small condo. The bubble burst, and as we all know, that same condo went down to $100,000. So as people are rushing out of these properties, Guess what I'm doing? I'm rushing in and I'm buying 10 of these properties at $100,000. Okay, because I knew that we've hit the bottom and there's— at that point there is nowhere to go but up. So I had to take advantage of that. And I wish I knew that when I first started because I would have capitalized more on the first 2 bubbles that I experienced. But that's what I learned from the 3rd. And hopefully I can teach you the same. If the bubble bursts, everybody's rushing out, you should be rushing in to buy. There are a lot of factors to consider when purchasing your next investment. Make sure you're keeping your finger on the pulse of the market, not only where it is now, but where it could possibly end up in the future. Although nobody has a crystal ball, being informed and following trends can only help you. If you already own a home and Want to know how to add more value? Click on this video right here. I go over 5 ways to add value to your next investment. As always, reach out if you have any questions. I'm always here to help.
