Current market cycle for residential real estate?

[Austin Wolff]

I currently think multifamily real estate is bottoming out (so either at the end of a Recession Phase or the beginning of a Recovery Phase). But what is the current market cycle for residential real estate?

- Some markets have seen home prices decrease from their 2022 peak (like Austin, TX). I would definitely consider those markets in a Recession Phase, and perhaps now may be a fine time to start looking for deals.

- Other markets have continued to see price increases, mostly because of strict supply. It appears as if they never quite hit the Peak Phase, even during 2022. It’s as if they have just had one long, slow Recovery-and-Expansion Phase since the Great Recession (like Lexington, KY).

- One more thing to keep in mind: most markets have seen price increases in nominal dollars (meaning, they more-or-less have risen due to inflation). However, many markets have seen price decreases in real dollars, even if their price tag has technically increased. This means that in some markets, while home prices have increased, the increases have not kept up with inflation, resulting in real price loss. I would consider these markets as part of the Recession Phase.

I think the market cycle phase depends on location, but across the board I see either:

1) Recession Phase for pandemic boom-towns,

2) (light) Recession Phase for markets that aren't appreciating faster than inflation, and 

3) Recovery/Expansion for places that never "boomed" during the pandemic -- just solid & steady growth (many Midwest/Northeast Markets).

Either way, it appears to me that now is the time to buy (even more so for multifamily properties).

What are you seeing in your market? Am I completely off?