What Happens When SHIFT Hits The Fan?

The real estate market follows a repeatable cycle based on the basic economic principal of Supply and Demand. Learn about this cycle and what phase the Greater New Orleans Northshore and Southshore Real Estate market is in right now.

July 27, 2017

What happens when SHIFT hits the fan?

The real estate market follows a repeatable cycle based on the basic economic principal of Supply and Demand. Check out this overview of how the cycle works and a look at where the Greater New Orleans Northshore and Southshore Real Estate market is right now.

There is a very well documented, predictable cycle that happens in the real estate world every 7-10 years based on supply and demand. The graph below explains the four phases in the cycle: Recovery, Expansion, Hypersupply, Recession.

Recovery - when prices are at their lowest and inventory is high. In recovery there are lots of choices for buyers and the market looks very attractive to them. Buyer’s decide “it’s time to buy.” Recovery is marked by buyer’s being optimistic, beginning to purchase, and demand begins to increase. Now, because the supply is being outpaced by demand, prices will start to rise.

Expansion - (a sellers advantage) prices are going up, inventory is still decreasing, scarcity mentality because everyone is feeling really good about the market. Everything keeps moving along in an expansion market and prices keep increasing until they hit a certain ceiling (dictated by buyers) and at that point buyers “tap out”; buyers simply refuse to pay the price sellers are wanting and at that point we have arrived at the SHIFT.

Much like a pendulum, once the SHIFT has arrived, the market will start to swing back the other way.

Hypersupply - demand will start to decrease and that will increase the inventory (homes will sit on the market longer). Supply will start to outpace demand and that is going to shift the advantage towards the buyers.

Recession - Prices will begin to come down. People are not feeling as optimistic. (No one likes to see Real Estate Prices going down or getting flat, everyone wants to see them go up.) There is a bit of a pessimistic view as we move into this buyer centered phase of the Real Estate cycle.

So where are we right now? What is going on in the local Northshore and Southshore Real Estate Market?

Right now, we are SHIFTING towards a buyer’s market. Homes are still selling, but the market overall is slowing down and price are beginning to trend downward.

What does this mean for sellers as we shift into a buyer’s market? Sellers need to enter the market at competitive prices with a strong pricing strategy laid out. If there is downward pressure on prices you do not want to be last person to realize it and have your home sit on the market as the most expensive. You’ll need to be pro-active, or you’ll end up on the loosing end. Our team of knowledgeable specialists is actively engaged in our current market and proactively coaching our clients to get their homes sold fast. If you are looking to sell your home call us today at 985-778-2525. To discover what your home is worth visit today.

If you’re a buyer, know that just because the advantage might be shifting in your corner a little bit, good houses are still going to sell fast. If you are operating in an area that is really slow, don’t be afraid to put in a lower offer and challenge the seller and negotiate yourself a better deal. You may find yourself in a better negotiating point, but you need to know that going in. Our team of agents are very much aware of our current market conditions and are ready to negotiate the best deal for you. If you are ready to start your search, call us today at 504-509-4771. To search all the homes currently available on the mls vist

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