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Updated over 8 years ago,
Timing the Market: Indicators to Determine Market Phase
Hey Folks,
Curious as to what indicators savvy investors use to determine the market cycle phase? I'm using the framework described in David Lindahl's book 'Emerging Real Estate Markets': Buyer's Market Phase 1, Phase 2, Seller's Market Phase 1, Phase 2. He discusses using quantitative factors such as:
Demand:
1. Employment Growth (driven by commercial incentives and strong local leadership)
2. Affordability (correlation between price and income)
3. Absorption Rate
Supply:
1. Building Permits
2. Vacancies
I'm getting a gut feeling we're seeing seller's begin to flood the market (at least in Tampa Bay) and we're at the early stages of a Seller's Market Phase 2. That's just a feeling though and I'm really looking to put together a cohesive investment thesis to pitch to potential investors.
What metrics do you all use to help you see the bigger picture? Also, where would you obtain the necessary data?
Thanks in advance!