The market

The cycle

The whole city moves through six phases. The phase sets where interest rates head, how buildings are priced, and how fast rents grow.

• Boom. Buildings are worth the most. A good time to sell or refinance.
• Hot. Values climb, and bargains get bought fast.
• Stable. Prices steady. A good month to buy carefully.
• Cooling. Values slip, and sellers start to listen.
• Downturn. Values fall. Distressed owners sell cheap.
• Distress. Fire sales everywhere. Cash is king.

The early part of every career follows a set course: a hot spell, a cooling, a downturn, then a boom. That way every player sees each kind of market while they're still learning. After that the market can change phase every four months, and nobody knows which way.

The phase also moves cap rates, the yield buyers demand. When cap rates fall, buildings are worth more for the same income; when they rise, worth less. Your buildings' values, your refinance cash-outs and your net worth all move with it.

The benchmark rate

Every new loan is priced off a benchmark interest rate. Each month it drifts toward where the cycle wants it, low in a boom and high in distress, with a little noise along the way. When it moves, the month-end reveal tells you where bank loans now start.

The rate matters twice: when you buy (a higher rate means bigger payments, and the bank's coverage test gets harder to pass) and when yourefinance (a new loan is priced at today's rate). Loans are interest-only, so a building you already own keeps its rate until you refinance it.

Districts drift

On top of the cycle, each district heats up or cools off on its own, a little each month, and slowly drifts back toward the city's average. A district heating up means its buildings are worth more. The month's biggest mover in a district you can work in makes the reveal: "Midtown heats up", for example. See Districts.

Listings come and go

When a building comes up for sale, its asking price is set by the market at that moment: high in a boom, low in a downturn, with some variation either way. After that:

• Bargains (priced under what their income is worth) get bought quickly, often by a rival.
• Fair prices sell now and then.
• Overpriced buildings sit, and every couple of months the seller cuts the price until it's fair.
• Fire sales appear in a downturn or distress: buildings at a deep discount. You get the first month on each before rivals can move.

The market also changes the deals themselves. In a hot market inspections turn up more problems and sellers give fewer credits; in a weak one, the reverse. See Buying and financing.

Rival brokers

You aren't the only broker in town. Rivals buy the bargains you leave sitting, a few a month at most, and the reveal tells you what they took and for how much. The first time a rival buys a listing from under you, the Rivals screen opens on the Market tab, showing who's buying and what they hold. A rival may also make a hostile offer on one of your buildings: take the money or say it's not for sale.

The month-end reveal

When you end a month, the reveal plays the news beat by beat, biggest first: the cheques, the sales, the deal that fell through. Then the market: a phase change, the rate, a district on the move, listings sold to rivals, new listings, price cuts and new leads. There's often a rumor. It ends on your net worth and what moved it.

It's worth reading before you play the next month. A downturn is when the bargains appear, and a boom is when your buildings are worth the most.