The Pendulum

One of the first things I learned, years ago, in real estate school is that the real estate market is like a pendulum and that it is always moving.  This is something I think about often.  Every city and even individual neighborhoods have there own pendulum that is in a different position and may be moving in different directions than a neighboring pendulum.


With the real estate pendulum, we don't always know where it is headed until it happens.


Here in Las Vegas we have seen quite a pendulum swing over the past 10 years. In June 2003 the market or pendulum really began to pick up speed with home prices increasing as much as $10,000 or more per week by the end of 2003 to early 2004.  Homes were sold before being within hours of going on the market and in may cases the buyers never even saw what they were purchasing.  By June 2004 the pendulum slowed its upward swing just a bit but continued the upward movement for another year and a half.  The market was slow but steady in early 2005 but by May 2006 the pendulum was getting ready to swing back as quick as it went up. The remainder of 2006 the pendulum was going slowly in the other direction but buyers were swooping in and excited to get what they though was a deal.  As the pendulum kept swinging the buyers were losing excitement and the market nearly stopped in spring 2007.  People realized if they wanted to sell a property they must drop the price. Prices have fallen ever since.  


Where is the pendulum today, who knows? Some in the real estate industry think prices will drop a little more.  My personal interactions I have had over the past couple months lead me to believe the pendulum may be stopping and ready for a change in direction, although it will most like not have the speed and momentum we have seen in the past.