Based on results, the decline in real household incomes has proven insensitive to a variety of economic theories and policies. Neither the Republican-Bush era tax rate cuts nor the Democratic-Obama Keynesian pump priming at fire hydrant pressures has succeeded in reversing this long term trend. Nor has anything appeared recently to suggest an abrupt reversal is at hand in this key trend of average household income.
In these circumstances the only other possibility for further residential real estate “recovery” would be for government regulators to foster another bubble by effectively relaxing residential mortgage lending standards again.
Two caveats: politicians are already calling for reinflating the housing bubble by lowering mortgage lending standards and in an election year, are likely to do so, and the statistics relating to income decline cover the unfortunate 90% of the population, not the top 10%, which is the segment buying in Greenwich.
So don’t count on finding that bargain just yet.