Hi John,
Thanks for sharing that amazing family story. I don’t know of any data that goes back as far as the charts you have in your possession. I would love to actually see them. The pics didn’t post to the comment. Perhaps you wouldn’t mind emailing them to me directly? You can share with me at jodie@theclose.com. I’d really appreciate that! Take care!

Attached below is the Roy Wenzlick chart from 1955. This chart hung in my grandfather’s office. He was in business with my father as was I. They were commercial real estate builders, developers, investors and syndicators during the late forties through the early seventies in Washington DC and the surrounding area. They disbanded in the 1973-75 depression.

Wenzlck worked for the Urban Land Institute in DC. He was an economist and developer. His chart covers a period from approx. 1806 to 1954. His 18 1/3-year real estate cycle is comprised of one statistic, “all voluntary transfers of real estate in the US”. Therefore, they are charts of real estate activity (not price). The cycle has never been stopped by wars, plagues, politics, FED actions… Once the cycle bottoms and begins its upwards climb, nothing interrupts it. Once it tops out, nothing stops it from reaching its 18-year bottom. It always moves in three legs. The first leg up is always a recovery of activity; however, not to the level of previous highs. Somewhere mid-cycle the second corrective leg down/sideways begins. It is a base building consolidation phase. The third leg is an explosion to the upside. Activity, number of real estate transactions, doubles. It is characterized by ever increasing risky speculation, lack of prudence and wild, unbridled optimism. Tops are broad, euphoric, and frothy; bottoms are sharp crystallizations of fear.

If the Wenzlick cycle were still in full force and effect, then real estate market activity would have bottomed in 1973-75, pulled back mid-cycle in 1980-82, then exploded up and topped out around1986 and plummeted to a bottom by 1991 (See NAHB HMI “chart”).

The next cycle would have then begun, real estate activity would have recovered from its 1991 lows, pulled back mid-cycle, then exploded up to a top in 2006-2007, then begun its contraction into its 18 year cycle low in 2009-2010.

Once again, the next cycle would have begun, activity would have recovered from its lows and consolidated mid-cycle, and then, where we are at now, explode up into 2023-2024, top out and head downward to a bottom in 2027/28. I believe the next depression is going to be a whopper.

The NAHB HMI Excel chart is also a chart of activity (single family homes transfers) overlaid on their HMI index. The chart is a wonderful illustration of Wenzlick’s cycle at play. Note the two bottoms in activity in 1991 and again in 2009.

To me the Wenzlick cycle is a cycle of pure, human emotion. I often wonder whether we control the cycle or the cycle controls us.”

Have fun,

Housing Market Index (HMI)

Housing Market Index (HMI)
The Housing Market Index (HMI) checks the pulse of the single-family housing market, according to a monthly surv…

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Thank you, Heather! We all appreciate that here at The Close. And yes, KCM has been so great at providing amazing content for agents to share. We love them too!

Thank you Sylvia! I agree, it’s been hard with sellers still believing they can get the same amount for their home they could get in 2021. The market has shifted and sellers are taking it hard. Be gentle. But be firm on coaching and guiding your clients!

I have found many seller’s have a fixed purchase price in their mind based on 2 years ago and disregard current market value. As a result some houses are sitting unsold for months without a reduction. I have to encourage buyersto move on to properties that will appraise and not get stuck negotiating with people who still believe it’s the old seller’s market.

Thank you Debbi! I appreciate you taking the time to read the article and leaving a comment. I hope your buyers are able to get into a home they love that doesn’t break the bank for them. Maybe by the end of 2022 or the beginning of 2023 the market will be more hospitable.

Thank you, Janice, for taking the time to read my article and leaving a lovely comment!

I 100% agree Michelle. Seeing so many buyers put into precarious situations in the most significant financial decision they will make was devastating. I’m happy to see a little balance come back to the market. Thank you so much for reading and taking the time to leave a thoughtful comment.

Now Buyers have a chance of getting a better deal, instead of being raped by greedy sellers and agents by paying far more than the house is really worth, giving up earnest money, and getting homes with problems because they were railroaded into foregoing inspections!

It’s just coming back to a more balanced, sustainable market.

Agents that haven’t been in the business more than 5 years aren’t going to know what to do because now they will have to actually MARKET a house, and work for the commission.