Top of Fifth Inning — or Ninth?
If you accept that the housing market is cyclical (I do), then you inevitably find yourself wrestling with these two questions: 1) how long are housing cycles on average?; and 2) where in the current cycle are we?
The best empirical data I’m aware of suggests that housing moves in 6-7 year cycles.
If that’s so, at least according to some observers, today’s bull market would seem to to be on borrowed time.
That’s because 2016 would be year #9 of an expansion that seemingly dates from 2007.
Year #9 of a 7-Year Cycle
My math is a bit different.
While 2007 was when the housing downturn began in earnest, and 2008 was the bottom in stocks and the general economy, housing lagged both and made a double-bottom in 2010 and 2011 (temporary government tax incentives intervened).
See, “Why Housing Prices are Sticky (at least for awhile).”
In other words, the first unambiguous “up” year for housing in the current cycle was 2012.
That makes 2016 the 4th year of the expansion — not the 9th.
Phew!
