If we look back at the last 2 Real Estate runs, we see a certain predictability. Both the1985-1990 and 2000-2005 cycles were almost identical. California’s real estate is typically a 15 year cycle, usually divided into three 5 year sections: one low inventory with high appreciation; one high inventory with depreciation; and one with healthy inventory and approximately 1-3 percent appreciation.
The boom of 2014-2019 has started.
Is it a good time to buy or sell? If I am planning to move up to a larger more expensive home, the time probably will not be this good for another 15 years. Let’s look at a hypothetical case: if you are selling a $400,000 home and moving to a $600,000 home, the spread is $200,000. If the market goes up 10% and your $400,000 home is worth $440,000, and, the new home is now $660,000, the spread is now $220,000 or a loss of $20,000.