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NEWPORT BEACH, CA—We may be in the middle of the longest economic expansion in recorded history, with low supply and high demand for housing, but at some point, at least one of those dynamics will shift—and then what? Landmark Capital Advisors managing director Adam Deermount tells GlobeSt.com. We spoke with Deermount about the factors that could shift the housing supply/demand scenario, and what could happen at that point.

GlobeSt.com: How do we look at home values today?

Deermount: Human beings are incredibly adept at explaining things by creating narratives to justify why something increases or decreases in value. During the housing boom, we rationalized away booming housing prices by pointing out the positive feedback loop created by increased housing production and expenditure. Houses were going up in price, so people bought more houses and tapped into their increased equity to consume more via HELOC, which in turn boosted the greater economy. Back in the Internet bubble of the late '90s, we explained away absurd valuations and skyrocketing stock prices for unprofitable companies by rationalizing that “this time was different” and that companies could sustain high valuations so long as they continued to grow—profitability (or even revenue, for that matter) be damned. We even came up with new BS metrics. Suddenly, clicks mattered more than price-earning (P/E) ratios. In the teeth of the Great Recession, we were often told by pundits that home values would never recover because the bubble had burst, and demand would stay low forever since homeownership was almost always a bad investment. In hindsight, each of these economic narratives that justified excess of one form or another were proven wrong.