[The following article from the commentary section of SBPDL offers a valid and practical explanation of U.S. real estate “boom and bust” cycles.]
Not to go full conspiracy theorist, but it dawned on me the other day that there must simply be a tacit agreement in place within each sector of the real estate game.
As in any other business — stagnation in sales disrupts cash flow — and for that reason, stability is in nobody’s self-interest. The entire process is designed for constant new developments being built.
Look at the industries/sectors of the economy who require economic activity in real estate to remain viable: banks that need a constant influx of new loan applicants, sellers of materials who need to supply construction projects, construction firms that need projects to meet their own payroll, developers need to always be designing and developing new areas, architects
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