With the housing recovery, it is perhaps because it has been much more visible and earnest that the disparity is more easily appreciated and understood. Prices have surged in some places as much as the housing mania portion of the great bubble of the 2000’s, yet that has taken place despite levels of overall activity at only fractions of that prior period. Thus, it is what looks like recovery with all the characteristics in price and momentum yet suspiciously devoid of true depth that would really define the very idea of “recovery” itself.
That real estate void is a microcosm of the “recovery” in the full economy. In many ways, it has looked like recovery but it has also suffered from this shocking lack of broad participation. If we really want to understand what has happened in especially the past two years (where “overheating” that was supposed to occur has given way to contraction and even recessionary imbalance) it has to start with appreciation for the narrowness with which the recovery narrative was defined. It really started in the summer of 2014 in what was really confirmation bias bordering on a state of full circular logic:
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