The Cyclical Nature of Real Estate: Understanding the Market Through Quarterly Snapshots

Hello, this is Michael Cheever, and today we’re diving into one of my favorite professional activities that happens four times a year: analyzing the quarterly real estate market. Real estate is a cyclical industry, and understanding its trends quarter by quarter gives us a significant snapshot of what’s happening and where things might be heading.

Why Focus on Quarterly Data?

Why quarterly? Real estate is dynamic, moving in cycles that monthly or weekly data can’t always capture effectively. A quarter, with its 90-day period, provides a broader view that allows us to compare market performance year-over-year while spotting emerging trends.

Market Overview: The Numbers Tell the Story

the market remains resilient, driven largely by the basic laws of supply and demand.

For instance, when we look at the recently completed second quarter of 2024, we see a small yet significant shift. Compared to the second quarter of last year, there has only been a 1% decrease in the number of homes sold in the Metro Atlanta area. Despite the media narrative about a downturn in real estate, this 1% dip suggests that the market remains resilient, driven largely by the basic laws of supply and demand.

Supply and Demand: The Heart of Real Estate Pricing

Supply and demand govern pricing in any asset class, and real estate is no different. A balanced market—one where buyers and sellers have equal leverage—is defined by 6-7 months of supply. For the past several years, we’ve been in a seller's market with less than 6 months of supply, leading to higher prices. But now, the supply is slowly increasing, signaling a potential shift toward a more balanced market.

Days on Market: The Price Factor

The days on market metric further highlights this disparity. Homes priced correctly are selling within 10 days, often at 100% of their list price. In contrast, homes that require price reductions are lingering on the market for an average of 75 days and selling for about 7% below their original asking price. This is a substantial gap and emphasizes the importance of proper pricing from the start.

Key Takeaway: Price It Right

What’s the takeaway here? Pricing a property correctly from the outset is key to success in today’s market. As agents, it’s our job to advise our clients with accurate data so that they can make informed decisions, ultimately achieving their goals.

Join Us for Market Matters

Here at The Rawls Group, we offer a quarterly event called Market Matters. We dive deep into both national and local statistics, and we even break down the luxury and commercial markets. These sessions provide valuable insights and data for agents and clients alike. We host this event a few weeks after the end of each quarter, and we’d love for you to join us. Follow our social media linked below to find out when the next one is!

Let’s keep crushing it and continue helping our clients thrive in this ever-changing market!

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