The Money Trail

Jonathan D. Miller

Market bifurcation is a recurring phenomenon of real estate cycles—there are always the haves and the have nots. It’s typically most apparent in market troughs when investors rush to quality. The 24-hour cities perform considerably better than the 9 to 5 markets and secondary cities, fortress mall markets crush places with B and C malls, suburbs with wealthy tax bases sustain school budgets where more commodity suburbs struggle to fund everything and tend to lose tax base as better-off residents move out and poor folks replace them.

But the separation between the haves and have nots—both in real estate markets and among the US population—seems as wide today as at any time during a market recovery. The evident chasm exists against a backdrop of political discord over the increasingly extreme concentration of affluence in a small percentage of the population and relative hardship among a majority who have experienced financial stagnation or hard-to-overcome setbacks. And it is happening even as property prices have rebounded to pre-recession peaks in many places—although that’s taken seven years.