Predicting the Future (and the Market)

Whenever anyone asks me to forecast the future, I feel as though I’ve been thrown into an ancient drama—perhaps one of the witches from Macbeth, or maybe blind Tiresias from Oedipus Rex. Too classical for you? Fair enough. Still, I am no Ray Kurzweil, no Amy Webb, nor any other modern soothsayer. Predicting the future is madness, and those who do so risk at least a little humiliation.

Nevertheless, from time to time, I’ve predicted the future of the real estate market—and, disturbingly enough, I’ve often been right. Each time, though, I catch myself thinking, “This seems obvious, but I’ll probably get it wrong this time.” I’m old enough to know fallibility is part of the deal. My forecasts are not proclamations; they’re educated guesses.

The Trouble with Certainty

Predicting the Arizona housing market today is harder than ever. There’s simply more chaos in the system—more variables beyond our control. Who among us can predict the next earthquake, war, economic bust, or boom? We look for signs and portents, but don’t we always find what we’re looking for?

That’s the real problem: our brains filter reality through belief. Once we decide something is true, we subconsciously search for evidence to confirm it. It’s one of the great challenges of our time—people start with a conclusion and then work backward, instead of beginning with an open, beginner’s mind and letting discovery shape belief.

Reading the Evidence

So, if we’re going to prognosticate, let’s at least do it with data. In Arizona real estate, for the past three years, the numbers have been remarkably steady: no significant slump, but no real rise in units sold either. Meanwhile, population growth continues, creating a latent market—a growing group of potential buyers who’ve been sitting on the fence, waiting for either a price collapse (like 2008) or a rate drop (like 2019–2020).

At some point, that pent-up demand will break loose—whether or not rates or prices fall. My guess? The breakout starts early next year. Despite headlines suggesting otherwise, sales prices are not dropping. What falls are inflated listing prices, which, after all, were just marketing statements—not the actual value.

The Lingering Shadow of the “Unicorn Market”

This pricing shift is a direct result of the “Unicorn Market,” that pandemic-era frenzy when sellers received a dozen or more offers within days and homes sold well over list price. We’re nowhere near that now. In most of Arizona, we’re in a balanced market. The smart strategy today is to price at—or even slightly below—comps.

Yet the memory of the Unicorn Market still haunts sellers and some agents, who think they should price high to leave “bargaining room.” Bad idea. Overpricing in a balanced or buyer’s market means chasing the market down and ultimately netting less, not more. As I often tell clients: don’t make the market correct your strategy—outthink it and anticipate it.

And if your property isn’t in truly exceptional condition? Overpricing is a serious mistake. As Shakespeare cautioned, “Sell when you can; you are not for all markets.”

Looking Ahead: Arizona Housing Market 2025

Barring a world war, a new pandemic, an economic collapse, or a political upheaval, I foresee a healthy market in the coming year. I expect:

• A surge of new listings early in the year.
• A modest drop in mortgage interest rates.
• A realization among sellers that they must come to the table, because buyers have not yet adjusted to the shift.

When buyers do catch up, I anticipate a brisk seller’s market in the spring. As Warren Buffett reminds us: “Be fearful when others are greedy, and greedy when others are fearful.” That rule made him rich because he acted counter to emotion. Smart buyers will take advantage of rising inventory before the crowd realizes the tide has turned.

By the time most people see it, the market will already have shifted to sellers. In short—not a bear, not a bull, but something in between: a volatile, bubbling pot of opportunity.

Summer may cool things slightly, but I expect a lively market through the beginning of next fall. After that? It’s anyone’s guess. We’ll be entering the midterms, which usually don’t shake the market much—but this cycle could feel more like a presidential one. If so, expect a brief pause until some version of “certainty,” such as it is, returns.