Which market cycle phase typically experiences peak property values?

The phase of the market cycle that typically experiences peak property values is the expansion phase. During this stage, the economy is growing, demand for properties increases, and significant investment flows into real estate. As a result, property values rise due to heightened interest from buyers, robust consumer confidence, and favorable economic indicators. This combination leads to competitive bidding, which drives prices to their highest point within the cycle.

In the expansion phase, you can observe characteristics such as increased construction activity, more real estate transactions, and rising rents, all of which contribute to upward pressure on property values. Furthermore, lenders are more willing to finance purchases, which adds liquidity to the market and can lead to even more increases in value as more buyers enter the market.

Understanding this phase is crucial for real estate professionals, as it helps them make informed decisions about property investments and orient themselves to market trends.