Has America's Land Cycle Reached Its Peak?

The U.S. leads the land cycle – and that’s why we pay close attention to the U.S. real estate markets.

America has the largest, most liquid property market in the world. No other country comes close in terms of sales volume and unit turnover on an annual basis.

Over 140 million housing units and around 5 to 6 million existing homes are sold each year – not to mention the hundreds of thousands of new builds.

Compare that to Australia’s 0.4–0.6 million transactions per annum and you get some sense of the sheer scale of it.

The peak in U.S. median house prices is a critical early signal for where we are in the land cycle - particularly now, in the final phase (or the Winner’s Curse as Fred Harrison termed it.)

Lessons from Cycles Past

In the early 1970s, U.S. property prices peaked and flatlined into 1973, before the severe 1974/75 land-led recession (triggered by the OPEC oil crisis and runaway inflation.)

The crash was harsh and long – with the median falling about 10–15% in real terms by 1980.

In the next cycle, median prices peaked in 1989, ending the '80s boom. What was termed the savings and loan crisis followed, dragging the market into the 1990–91 recession.

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