Determining Stage of Real Estate Cycle with Market Analysis

This report determines the stage of the real estate cycle by analyzing characteristics of the property market, focusing on the rental market and factors influencing it. It examines the relationship between occupancy, rental rates, and market dynamics, highlighting the significance of location and durability in real estate. The report identifies low vacancy rates with recovery, expansion, and hyper-supply phases, noting the impact of high occupancy on rental rates and demand. It pinpoints 2015 as a year with significant decline in vacancy rates, attributing it to the expansion phase and business growth, which led to increased property demand and price rises. The fair market rent in Boston reached its peak in 2015, driven by market cyclicity and inflation. The expansion phase is characterized by increasing demand, leading to higher property values and efforts to achieve equilibrium in property supply. Desklib offers a wide range of solved assignments and past papers for students.

DETERMINE THE STAGE
OF THE REAL ESTATE
CYCLE

Table of Contents
Question 1........................................................................................................................................3
Question 2........................................................................................................................................3
2.1.................................................................................................................................................3
2.2.................................................................................................................................................3
2.3.................................................................................................................................................4
2.4.................................................................................................................................................4
REFERENCES................................................................................................................................5

Question 1
Characteristic of the property
The rental market of real estate sector is associated with the various characteristics that
are associated with the different aspects of the property market. Figure 1 show that the
occupancy and the rental is also increasing in between point 1 to point 6. There are various
characteristics reflect in this which include diversity of properties. In context to real estate every
property has its own significance which create a price rise (Aladangady, 2017). Location also
become a crucial characteristic for the real estate market. Durability is among a key
characteristic associated with the real estate market.
Question 2
2.1
Low vacancy rate is denoted as more number of properties are occupied by the
stakeholders. There are certain stages causes lowing vacancy rate demonstrate as recovery phase,
expansion and hyper supply phases. All these are the stages that resulted into the low vacancy
rate of the property occupied. Due to the high occupancy rate the rent or fair is also increase at
these stages (Chan and Adabre, 2019). The aspect of low vacant rate clearly demonstrate about
the heavy demand of the real estate property in respective target market. This situation can also
be achieved with support of the proper supply of the property in the market in context to the
overall demand of the property under respective target market.
2.2
Year 2015 is the one that reflect about the most significant decline in the vacancy rate.
Expansion phase is the stage that resulted into the lowest vacancy rate as fewer people try to
leave the office premises. The year of 2015 create a growth in business in such an area that
further lead to the stage of expansion which resulted into low vacant rate of property. Growth is a
most prominent phase in real estate market as this stage allow the stakeholder to address the
massive demand of the property (Hu, Qu and Meng, 2018). More demand in market indicate
about the less supply and balance between demand and respective supply in the market place.
Property market have always witnessed a rise in the price as the demand is always there of the
property. This further lead to increase in prices at a constant pace.

2.3
Fair market rent is recorded in 2015 was highest of all time at the Boston location. The
year offer the maximum amount of rent such as 1494. Market cyclicity allow the price rise that
increases cost of various aspects and elements. There are many reasons include inflation and
such other which causes to rise in prices of products and services.
2.4
Expansion of the real estate cycle demonstrate the following characteristic that include
the increasing demand lead to more value. This is a major characteristic denoted the growth stage
of the property. The more demand lead to price rise like situation in market. The another
characteristic is to achieve the equilibrium position in term of property supply.

REFERENCES
Books and Journal
Aladangady, A., 2017. Housing wealth and consumption: Evidence from geographically-linked
microdata. American Economic Review. 107(11). pp.3415-46.
Chan, A. P. and Adabre, M. A., 2019. Bridging the gap between sustainable housing and
affordable housing: The required critical success criteria (CSC). Building and
environment. 151. pp.112-125.
Hu, B., Qu, J. and Meng, C., 2018. Supply chain coordination under option contracts with joint
pricing under price-dependent demand. International Journal of Production
Economics. 205. pp.74-86.