The CRASH is imminent! - The End of the US Real Estate cycle - 18.6 Year Cycle. 📉🏘

The 18.6 year US real estate cycle is coming to its end. This cycle has played out over 200 years and will most likely continue, as that is what cycles do, until one day they break. There will be a point in time when this cycle will no longer play out as anticipated. But so far the market has proven it is something to follow.

🏛The housing market, or what it actually is, the land market, is what drives the global economy. The real estate market value is close to 400 trillion US dollars. Almost 4 times more than the second largest asset in the world, which is oil at around 110 trillion. When the real estate market goes down in value, people take less risk as their safe haven no longer increases in value. There are a lot of reasons why the real estate cycle is ending, not only based on the 18.6 year cycle. If you take a look at Nonfarm Payrolls you can see that the job market is starting to slow down. Jobs are still being created, but not at the same pace as before, and that shift is important. The real estate market depends heavily on people having stable income. When payrolls start rolling over, even slightly, it means fewer people can afford homes, and eventually that pressure builds up.

📈At the same time, the US10Y has been high, and it is looking like it wants to go higher from here. This directly impacts mortgage rates. When the 10 year yield goes up, borrowing money becomes more expensive, which means monthly payments on houses increase a lot. Even if prices stay the same, fewer people can afford to buy. This slowly drains demand from the market.

Another thing that has grown a lot in recent years is the Private Credit Market. This is basically lending happening outside of traditional banks. It has been a way to keep money flowing into the system, especially into businesses and real estate. The problem is that a lot of this debt is tied to higher interest rates today. If companies or property owners can’t refinance or handle the higher costs, it can lead to stress, defaults, and forced selling. It doesn’t always break instantly, but it adds pressure under the surface.

In the final phase of the 18.6 year cycle, things usually don’t just collapse right away. First, you often see a push higher in certain areas. Commodities start to move, inflation picks up, and assets like oil tend to spike late. That’s often one of the last signals before things turn. We are already seeing parts of this with agriculture starting to move, which likely reflects rising inflation pressures.

After that phase, the pressure starts to show more clearly. Housing activity slows, jobs weaken, and debt becomes harder to manage. Then eventually, the market rolls over. Not always all at once, but in a sequence.

💸When the real estate cycle ends, there is almost no asset that won’t go down. There is no safe haven. Not gold, not silver, not Bitcoin. Everything tends to sell off hard, at least in the initial phase. The dollar will most likely be the best place to sit. The narrative will likely be that you should move into gold during a recession. It might also be that wars have ended and that there is nothing to worry about anymore. Don’t fall for it.

That’s why this phase is important. It’s not just about prices going up or down, it’s about understanding what is happening underneath the surface.

📊It is important to point out that when the real estate market tops, the stock market usually tops around 1 year after. Keep in mind this does not have to play out the exact same way, but if it does, we might see a stock market top around October this year. It could also be the case that we have already topped. It is incredibly hard to know where the top will be, and no one can predict it.