Cycles: Real Estate’s Four Seasons — Except the Seasons Are Never the Same Length

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When spring arrives, everyone knows summer is coming. When summer peaks, everyone knows autumn follows. The seasons keep their order. What nobody knows for certain is how long each one will last — whether this particular spring will run three months or five. Real estate markets work the same way. Everyone knows a downturn follows a boom. What nobody knows in advance is whether this boom will run three years or ten.

The Seasons Always Arrive in the Same Order

Real estate markets follow a sequence that’s remarkably consistent. Capital loosens, rates fall, investors pile in and bid against each other. Spring. Prices keep climbing, new development floods in, and optimism spreads that “this time is different.” Summer. Supply outpaces demand, rent growth stalls, and the signals start to look strange. Autumn. Then credit dries up, distressed sales flood the market, and prices collapse. Winter. Looking back just thirty years — the 1997 Asian financial crisis, the 2008 global financial crisis, the ultra-low-rate bubble of the early 2020s pandemic era — the trigger was different every time, but underneath it the same structure kept recurring: excess credit piling up against real estate, until at some point it blew.

William Poorvu, who taught real estate practice at Harvard for decades, introduced this repetition through a line borrowed from a colleague, John Vogel: “The real estate cycle is ten years long, but people’s memories last only five.” About five years after a market crashes, people forget how cold last winter was and start believing “this time is different” all over again. At nearly every cycle peak, the majority of participants have believed the current rally was structural and wouldn’t reverse — the boundless-growth thesis in late-1990s Asia, the “home prices never fall” myth in 2000s America, the belief in permanently low rates in the early 2020s. Everyone knows, in the abstract, that seasons come. And yet the illusion that winter won’t arrive keeps recurring, every single cycle.

So Why Does This Season Feel So Long

The order of the seasons is predictable; their length is not. Some springs end short and sharp; others stretch on for years. One popular theory, tracking troughs in the U.S. real estate market back to the 1930s, proposes a roughly eighteen-year cycle — fourteen years of expansion, four years of contraction. The theory’s proponents point out that the trough years — 1933, 1952, 1970, 1990, 2008 — line up with almost eerie regularity around that eighteen-year interval. The British economist who first refined this pattern became known for predicting the 2008 crash years in advance using this framework alone, and if the clock holds, the math points to the next trough landing around 2026.

What matters here isn’t scientific precision but the intuitive appeal the number offers. To the question “why does real estate keep collapsing just when everyone’s forgotten the last time,” eighteen years sounds like a plausible answer. But there’s a trap worth naming. If a season returned at exactly the same length every single time, it wouldn’t be a season anymore — it would be a clock. What makes real estate cycles genuinely tricky is precisely the opposite: the rough sequence repeats, but its length is governed by a different set of factors every time.

This Winter Is Not the Last Winter

The cycle of the early-to-mid 2020s illustrates this especially well. Interest rates, which had fallen to record lows during the pandemic, rose sharply, forcing a repricing of assets that had inflated during the ultra-low-rate years. So far, this is a familiar winter pattern. But this particular winter carries several unfamiliar features layered on top of it.

First, the very utility of office real estate as an asset class came under question. Past winters were cycles where credit dried up and then recovered as spring returned. This time, the spread of remote work pushed office occupancy in some cities down to roughly half of pre-pandemic levels. That’s not vacancy that refills once the economy improves — it’s a structural drop in demand. One research firm projected that U.S. office values might not recover to pre-pandemic levels until 2040. Meaning: this particular season might not come back at all.

Second, this repricing hasn’t shown up merely as falling prices — it’s shown up as a bottleneck in the capital structure itself. As loans originated during the low-rate years reach maturity en masse, an enormous volume of commercial real estate debt worldwide is heading to the renegotiation table across 2025 and 2026. The bill arrived only after the party ended.

Third, this time there isn’t just one clock — there are several. Past Asian crises unfolded with some lag relative to the West, but largely moved within a single shared global credit cycle. In recent years, though, China’s property market has gone through its own, distinct restructuring, driven by major developer defaults and liquidations. It was a separate winter, on a different beat and for different reasons than the West’s rate cycle. The global real estate cycle is no longer one clock — it’s several clocks, spinning at different speeds.

Same Winter, Yet Some Trees Are Blooming

There’s a final twist to the seasonal metaphor. Not every tree goes equally bare in winter. Even as offices struggled, asset classes like logistics warehouses, data centers, and senior living kept setting new highs. Capital hasn’t frozen wholesale — it has simply moved out of asset classes that can’t survive the aging season and into asset classes with unmistakably new demand. Rather than the entire commercial real estate market entering spring or winter together, some trees wither while others grow more lush than ever — a K-shaped cycle is the defining feature of this particular phase.

So What Do You Actually Do, Facing a Cycle

Knowing the order of the seasons doesn’t let you predict exactly when the snow will stop. But simply never forgetting that seasons exist at all gets you halfway there. The moment someone believes winter won’t come just because they’re standing in the middle of summer, that person becomes the next cycle’s casualty. And whoever remembers, even in the harshest winter, that seasons always keep their order, is the one who spots the tree that will bloom in spring while everyone else is staring at collapsed prices.

Poorvu’s epigram is worth turning over again. The cycle runs ten years; memory fades in five.”What time is it right now — and am I fooling myself into thinking I already know?” That’s the question worth asking yourself, right here, reading this book.

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Sources

• William J. Poorvu, The Real Estate Game (1999) — the “ten-year real estate cycle, five-year memory” epigram, reconstructed as a brief (not a direct quotation).
• The eighteen-year real estate cycle theory (Homer Hoyt’s original observation, refined by Fred Harrison) and the alignment of troughs in 1933, 1952, 1970, 1990, and 2008: Norada Real Estate, “What is the 18-year Real Estate Cycle?”; Progress.org, “The 18-Year Pattern”; BiggerPockets, “The 18-Year Real Estate Cycle Ends in 2026.”
• U.S. office occupancy at roughly 50% of pre-pandemic levels, with value recovery projected around 2040: Capital Economics, cited in 2026 industry outlooks.
• Roughly $1.8 trillion in commercial real estate debt across roughly 7,000 assets maturing across 2025–2026: Deloitte Insights, 2026 commercial real estate outlook; PwC/ULI, Emerging Trends in Real Estate: Global 2026.
• Chinese property developer defaults and liquidations (2021–2024) and associated loss estimates: Council on Foreign Relations, “Does Evergrande’s Collapse Threaten China’s Economy?”; CNN Business (2024); Wikipedia, “Chinese property sector crisis (2020–present).”