Even Flat Growth is a ‘Recession’ – When Prices Hit Bottom and Stay There, Lady Liberty Cries

The more I read about what is to come, the more it seems that there IS another housing recession coming.  Or so I am told. FREEZE.  This is not a dire warning, nor do I mean to infer that prices are heading for another dip.  In some areas they will, and in others, prices should actually rise.  Put it all together, and I would expect prices on the national level will remain fairly flat for awhile.  So why is that a recession?

It is a recession because even if the real estate market is not getting worse, American’s will still be unsatisfied.  We seem to thirst for the blood of a raging economy, feasting off the spoils of rising housing prices and 15% year-over-year growth.  Falling prices and negative returns and the loss of value seem to resonate as the loss of American Values.  It is in that vein that the potential flatlining of prices will be touted as a recession, because its not going up!  When the glass is full we drink it up, but it is never HALF FULL.  It’s either all or nothing, and anything reasonable in the middle gets the shaft.

Large swaths of America need to understand that the free market we so strongly support and believe in inherently means that there will be fluctuations – up and down.  Flat price growth is actually a representation of other fluctuarions that are balancing out – job growth and low mortgage rates which should encourage buying and growth is balanced by a shadow inventory of foreclosures on the horizon and reduced interest in risk with the banks.

I hope that in the media, someone will have the guts to say that a flatline does not mean that the heartbeat of America is gone, but rather that its hardrive is rebooting – discarding all the junk and starting anew with more reason and maturity.  This is an opportunity to get it right and to ensure that future Americans can purchase a home without fear of a bursting bubble, without wondering if or when they will lose their home.  It is time to appreciate the little steps in the right direction, even if they appear like they are not going froward.