Next-Level Insights

The anxiety surrounding the housing market is palpable. Headlines scream conflicting messages, and nearly every potential homebuyer is asking the same question: “Should I buy now or wait for a crash?” It’s a high-stakes decision clouded by uncertainty. But what if the crash so many are waiting for has already begun?

According to an in-depth market analysis, the downturn is not a future event—it’s happening right now. This perspective is grounded in a surprising source: a 200-year-old formula that claims a perfect track record for predicting real estate cycles.

This post will distill three of the most impactful and counterintuitive takeaways from this analysis. By understanding these truths, you can see past the daily noise and gain a clearer picture of where the market is headed, culminating in a specific prediction for when it will finally hit rock bottom.

1. A Forgotten 18-Year Cycle Is Driving Everything

The core of this long-term forecast is a “lost formula” rediscovered by economist Fred Harrison. It posits that real estate doesn’t move randomly but follows a consistent and predictable 18-year pattern, which has been hiding in plain sight for centuries.

The 18-year cycle breaks down with remarkable consistency: first come 7 years of slow, steady price growth, followed by 7 years of explosive, often speculative, price growth. Inevitably, this boom is followed by a 4-year crash that resets the market.

This isn’t a recent theory. The analysis shows that this cycle has successfully predicted every major recession and housing crash in the U.S. going back to the 1800s, including the Great Recession of 2008. According to the pattern, the most recent market peak occurred in June 2022. This timing is critical, as it places us squarely in the 4-year crash phase right now.

The resilience of this cycle is rooted in a potent combination of collective amnesia and generational turnover. A nearly two-decade span is long enough for the painful lessons of one downturn to fade from the institutional memory of policymakers, lenders, and a new cohort of homebuyers.

Everyone in charge forgets all the bad policies that caused the previous crash, and then boom, it happens all over again.

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2. The Real Problem Isn’t Interest Rates—It’s Price

A common belief among today’s homebuyers is that the main obstacle is high mortgage rates, and the best strategy is to wait for them to fall. This analysis argues that this is a critical mistake.

The logic is straightforward: if and when mortgage rates drop significantly and quickly, millions of sidelined buyers will flood the market simultaneously. This sudden surge in demand will cause the limited inventory to vanish, and as a result, home prices will “shoot right back up again.” This would recreate the very affordability crisis buyers were hoping to escape.

so if you’re waiting for rates to come down, please don’t, because when they finally do, it’ll be too late; you’ll have missed your chance to buy a home. That’s why rates are not the real problem; the problem is the price of homes

This highlights the source’s core argument: the single most important metric is not the cost of a loan, but the fundamental affordability of the asset itself, which is best measured by the price-to-income ratio. This metric is calculated by dividing the median home price by the median annual household income. In a healthy, balanced market, this ratio should be around 3.5. For context, the last market bottom in 2009 saw the ratio hit 3.7. At the recent peak, it soared to an unsustainable 5.8. Today, despite some price drops, it remains highly elevated at 4.9, clearly illustrating that the core issue is not the cost of borrowing but the price of the asset itself.

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3. The Market Bottom Has a Specific Date: February 2027

While the 18-year cycle provides a broad 2-to-4-year window for the crash, we can pinpoint the exact bottom by analyzing two other critical factors: the remaining price correction needed and the path back to income affordability. These three factors—time, price, and income—work together to create a specific, data-driven forecast.

• Time: The 18-year cycle predicts a 2-to-4-year crash period. Starting from the market peak in June 2022, this provides the overall timeline for the downturn.
• Price: A “triple peak pattern” observed since 2022 indicates that prices are in a sustained decline. This is considered a reliable crash indicator because it has appeared before major downturns, notably in the 1980s when mortgage rates hit 18% and just before the market bottomed out after the 2008 crash. The analysis concludes that prices still need to fall another 9% (or about $36,000 on the median home) to return to their normal appreciation trend.
• Income: The price-to-income ratio must return to a sustainable level. The forecast projects that for homes to become truly affordable again, the ratio needs to drop from its current 4.9 closer to the historical bottom of 3.7.

By combining these three factors, the formula moves from a broad window to a specific date. The final step is to project the timeline. By dividing the remaining price drop needed ($36,000) by the observed monthly decline rate of approximately $2,100, the formula projects the exact number of months until the market floor is reached. This calculation points to a single conclusion: the absolute bottom of the housing market will be February of 2027.

However, not everyone can or wants to wait. For buyers looking to act sooner, the analysis provides an immediate, actionable strategy based on the same data. The offering formula is as follows:

• Nationally: Offer 10% below the current asking price.
• In “Bubble Markets”: Offer 20% to 25% below the asking price.

A “bubble market” is defined simply as any market where home prices increased by more than 40% during the COVID pandemic.

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Conclusion

The housing market can feel chaotic and unpredictable, driven by daily news and fluctuating rates. However, by looking past the short-term noise and focusing on historical cycles and fundamental affordability metrics, a much clearer picture emerges. The data suggests we are not waiting for a crash but are in the middle of one, following a pattern that has repeated for over two centuries.

The final question is a personal one: Now that you’ve seen the data behind this 200-year-old pattern, will it change the way you look at the housing market’s next move?