Unless you operate in New York or Washington DC, you know most commercial real estate markets still are barely out of intensive care. National vacancy rates for retail and industrial properties remain stratospherically high compared to past downturns, and everybody you talk to is most worried about future demand for office—most companies will look to shed space when their leases roll, not necessarily expand as you would typically expect in a recovery. Then you digest last week’s really ugly jobs numbers and must realize there will be no easy exit from these rough times.

Now if you’re a regular reader, you know I believe real estate is a cyclical timing play—in fact right now is a better time to buy than sell, although the buying opportunity in the top markets—the global gateway cities was 18 to 24 months ago, and for the most part that window has closed. In this cycle, there may not be much more downside, but the upside will be extremely slow to materialize.

The reason for that is the secular change going on in the U.S. economy. We’re no longer the straw that stirs the drink (thank you, Reggie J.) for the rest of the world. Our jobs engine may not be entirely broken, but it requires an overhaul—companies can use fewer U.S. workers to make big profits and they can pay them less thanks to automation and outsourcing via the internet. The growing world markets aren’t domestic, they are all overseas. At the same time, our government is broken in ideological turmoil where factions on either side try to protect embedded practices and benefits that can no longer be sustained, if we are to get to a better place. Entitlements need to be modified to reduce outlays, while wealthier Americans and highly profitable companies need to pay more back into a system that has provided them so much. This secular change essentially is all about the average American having less and living less large, which means we’ll want and need less real estate.