The money supply expands primarily by debt, and it relies on people paying back the debt with actual value (or dollars representing the actual value).
When tightening, there arent enough dollars in circulation to do that.
But the bankers get the actual value (homes, collateral, liens on income) regardless. Lenders dont keep seized collateral on their balance sheet, so they sell it at the best price (and they dont need the max price because they already made so much on interest payments). So they push prices down in their firesales.
For the tightening money supplt and people trying to find dollars, think of it like the poison map closing in on Call of Duty Warzone.
When tightening, there arent enough dollars in circulation to do that.
But the bankers get the actual value (homes, collateral, liens on income) regardless. Lenders dont keep seized collateral on their balance sheet, so they sell it at the best price (and they dont need the max price because they already made so much on interest payments). So they push prices down in their firesales.
For the tightening money supplt and people trying to find dollars, think of it like the poison map closing in on Call of Duty Warzone.
So you can base housing prices on that outcome.