The “18‑year cycle” theory holds that real estate markets tend to peak and crash roughly every 18 years, an idea that can be traced back to economist Homer Hoyt (1933), who noted in his dissertation on Chicago land values an 18‑year rhythm of booms and busts. 

Georgist economists later popularized it: British economist Fred Harrison systematically charted world property booms — identifying multi‑decade patterns — and predicted US housing crashes in 1990 and 2008 by applying this framework. Economists point out that the pattern can be traced through the historical record, with downturns in 18-year cycles recorded around 1953–54, 1971–72, 1989–90, and 2007–08. Harrison and others divide the cycle into phases: a four‑year post‑crash recovery, a seven‑year moderate growth period, followed by a mid‑cycle dip, and then another boom period of about seven years, the “winner’s curse” that marks the peak ending in a peak.

Those who adhere to the “18-year-cycle” theory argue credit and land speculation amplify these cycles. As credit eases, housing booms for about 14 years, which is followed by a credit crunch triggers a four‑year downturn. Other well-known advocates of this theory include Roy Wenzlick (1930s analyst of the New York City housing market), Fred Harrison (a British economist), Mason Gaffney (an American Georgist scholar), and Fred Foldvary. In 1997 Foldvary warned the next downturn would follow 18 years after 1990 — around 2008 — which indeed coincided with the US housing crash and the Great Recession.

Critics counter that the 18‑year pattern is more folklore than science. Skeptics note the theory is based on limited data and ignores fundamentals, factors like demographics, interest rates, supply constraints, and government policy can break the pattern. Some analysts argue housing markets in recent decades, particularly in the UK or Australia, have not followed clear 18‑year milestones. Real home prices have been roughly flat for long stretches, and shocks like the 2008 crisis or COVID pandemic, were mere blips.

US housing peaks often occur roughly a generation apart. Supporters point to post‑war booms ending around 1953–54 and again circa 1971–72. In the late‑1980s housing bubble, which peaked around 1990, and the 2005–07 boom, each fit the 18‑year rhythm. One analysis notes that, aside from the interruption of World War II, the US real estate cycle peaks fall roughly every 18 years. 

However, the fit is imperfect. The cycle theory relies on selectively dating peaks. In the US since WWII, other downturns occurred (in the. early 1980s and early 2000s) that don’t align with an 18-year cycle. After the last peak around 2006–07, home prices did not begin a new boom until the pandemic, which some argue was a “mini‑cycle” distorted by ultra‑low rates. 

In fact, US house prices peaked in mid‑2022 and then softened; Harrison’s forecast of a 2026 peak assumes a full 18‑year expansion from a low in 2008, but critics note the 2010s lacked a strong boom to match that timing. Overall, while there is some evidence in the US to support the 18‑year cycle theory, there are many exceptions. 

Several trends cut against a looming crash:

Currently, leading indicators are mixed. On one hand, tightening credit, stretched affordability, and rising distress hint that the housing market may be topping out, but millennial demand argues against a sharp collapse. Government support (e.g. FHA lending, local housing programs) also cushions the market. Commercial real estate faces undeniable stress (especially office), yet rising cap rates are reversing and lending hasn’t frozen up entirely.

Given the data, a moderate slowdown seems likelier than a crash in 2026. The 18‑year thesis predicts a US housing peak around 2025–2026, followed by a downturn. Indeed, top economists see only slight growth in 2026, with the Fed expected to cut overnight rates several times in the next year, which should eventually work its way into the rest of the economy and lower mortgage rates. 

Even those expecting a slowdown project only a mild recession in 2025–26, and home prices may flatten or dip 5–10% over 2026. Critical support will come from low inventory and demographics: millennials still need housing, and new household formation remains well above the Great Recession lows. A full-blown crash like 2008 seems unlikely unless a severe macro shock hits. If the cycle theory is wrong, or muted by policy, we may simply see prices plateau, or dip modestly. 

We recommend close monitoring of the indicators, especially Fed policy, inventory changes, and delinquency trends. Investors should not rely on the 18‑year “clock” alone to time the market.

Nearly 7% of new single-family homes were teardowns in 2024, according to the National Association of Homebuilders (NAHB). Another 20% of new homes were built on lots in older neighborhoods, according to the latest Builder Practices Survey (BPS). The new homes are categorized by development, and include teardown, infill, new residential development, and ”not in a residential development.” Homes built in subdivisions, aka new residential developments, are the most common type. 

Setting the right price for a home can avoid the messy business of cutting the price or even being forced to delist it, a trend proptext reported on last week. More than 20% of active listings in October had a price cut, according to Realtor.com, That share is higher than in the past couple of years, and about twice what it was when prices soared during the Covid-19 pandemic. The National Association of Realtors says that after three months, sellers usually trim prices by more than 5%, and after a year, by more than 12%.

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