When's the Crash Coming?

It's the question I get more than any other, and it has been for a few years now. Closing table, phone call, or catching up with a friend who knows what I do — sooner or later it comes up. When's the crash coming?

I understand why people ask. The last time prices ran up like this across the East Valley, they didn't simply cool off — they dropped, and hard. And it wasn't play money. It was retirement, the move to be closer to the grandkids, the fresh start someone had been planning for years. A loss like that stays with you. So the logic follows: it climbed fast, it has to fall fast. Right?

We're six years into this run now. So here's what I tell them — the good, the bad, and the ugly.

First, the things nobody can call

Let me set the wild cards aside for a moment.

We've all grown used to "rare" events that keep showing up anyway, and that doesn't make them any easier to predict. I can't tell you what the next one will be, when it will hit, or which direction it will push the market. Nobody honestly can.

Case in point: no one saw a global pandemic coming that would move a mountain of money into the system. That's not something you plan around. And it's the very oddity that made this last run so unusual to begin with.

So why does this cycle feel different?

I'll admit it — digging through the real estate data is kind of my jam. The charts are broad and usually a step behind, but they're honest. They're a record of what already happened, and I'll always take honest.

The one I want to look at today isn't prices. It's the money supply — the M2 chart. Set it next to home values over the same stretch, and here's what stands out to me.

From 2003 to 2008, prices climbed while the money supply barely moved. That run was credit loosening up, plain and simple — nothing solid underneath it. So it couldn't hold. And it didn't.

The COVID run is a different animal. Historically low borrowing costs sent demand soaring, and this time the money supply climbed right alongside it — nearly step for step. Both peaked in April of 2022. Both eased back afterward. And both are still trending up today.

That's not nothing. In fact, it's what makes me wonder whether that's the real reason this run has held for six years and counting.

So when do prices come down?

What goes up does come down — I'm not going to pretend otherwise. I've been through enough cycles to know nothing climbs forever.

The question was never whether. It's when. And trying to time the market is a fool's errand; I've watched sharp people attempt it and miss, plenty of them sharper than me. So I'll keep pointing back to the money supply on purpose. If that's what's been holding values up, then the real question isn't "when do prices fall." It's "what brings the money supply down first?" Because I'd wager those two are standing awfully close together.

And now — foreclosures are climbing

They are. And that changes the conversation.

That's the part I'd rather sit down and talk through with you — no pressure, no strings attached — because this is where it stops being a chart on my screen and becomes about your home, your equity, your timing. Whether to sell now or ride it out isn't a data question. It's a life question, and that one's mine. Let me be the filter for the behind-the-scenes details so your experience stays smooth.

More on the foreclosures next time. And whatever the market decides to do — it's going to be great. 🏡