The comment, often attributed to Mark Twain, about history not repeating itself but rather rhyming is on the verge of becoming cliché when it comes to characterizing the real estate cycle. As early as mid-2015, a considerable amount of ink was spilled deciphering how this real estate cycle may rhyme with previous cycles, specifically the 2005–2007 period.

Without a doubt, an understanding of real estate cycles is imperative. The cyclical nature of real estate, however, should not trump the secular forces at play. Identifying secular trends can enhance clarity about how cycles might rhyme but also in how they differ. More important, secular bets determine the majority of under- or outperformance for long-term holders of real estate. Three major secular changes affecting U.S. real estate are:

1.         Its performance became more closely linked with that of other asset classes during the 2008 financial crisis, propelling real estate into the mainstream.