In the life cycle of a market area, which phase directly follows growth?

The phase that directly follows growth in the life cycle of a market area is stability. During the growth phase, an area experiences increased economic activity, development, and population growth. This is often characterized by rising property values and demand for goods and services. Once the market reaches a peak and no longer experiences rapid growth, it enters the stability phase.

In the stability phase, the market area maintains existing conditions, with less dramatic changes in property values and population. This phase signifies a period of equilibrium where supply and demand are balanced, and the momentum of growth moderates. The community stabilizes, and new developments may occur at a more measured pace, focusing on maintaining quality and sustaining the existing infrastructure rather than expansive growth.

Understanding the life cycle helps appraisers and investors gauge market conditions and make informed decisions.