Cycles are a natural occurrence. Some cycles repeat over a specific period of time, others over different periods.
Real estate markets are cyclical. The prices rise or fall. It's difficult to understand the reasons for this.
Algarve - Portugal
There are internal or endogenous factors and external or exogenous factors that affect real estate markets and drive the market cyclically.
Exogenous factors are occurrences such as shifts on employment rate, interest rates, or changes on gross domestic product (GDP). Endogenous factors are decisions to build or invest in real estate.
Other example of exogenous factors that affect real estate are Business Cycles. Business Cycles are driven by demand (i. e. population growth , changes on income or interest rates, demographics, preferences)
Identifying and understanding both Exogenous and Endogenous factors, can help us in minimize the negative impact on real estate or identify business opportunities.
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