What shape is your recovery?
You've probably heard people talking about V-shaped housing-market recoveries -- sharply down, sharply up -- and U-shaped turnarounds (down, flat, up).
But letters of the alphabet as economic metaphors are so 2008. The hot new thing: kitchen implements.
David Stiff, chief economist at Fiserv, tells Time's Curious Capitalist blog that he's expecting a recovery will look like a frying pan. Here's what he means:
Once the glut of low-priced foreclosures thins out and buyers are back to choosing between homes owned by more typical sellers, he anticipates a short increase in price, followed by more-or-less flat values. The Curious Capitalist says, "Following the housing bust in the northeastern U.S. in the 1980s, home prices were fairly flat for four to five years. It takes a while for folks to regain their confidence to go out and buy a house—especially a more-expensive one."
If you're scratching your head over the comparison to a frying pan, picture a two-dimensional drawing: down, then flat, then up a bit, then -- along the handle -- flat once again. (Actually, you don't need to imagine it. You can see Stiff's doodle here.)
This prompted a tongue-in-cheek response from a reader who wondered if the frying-pan handle could "possibly have an upward tilt, or perhaps an ergonomically designed grip," and warned that if "it's a Pyrex frying pan, you could slip right off that handle into the fire."
Ouch. Don't get folks started on the subject of "green shoots," either.
Categories: Housing forecasts, Housing humor



Comments
Sounds to me like he is going the long way around the block to avoid giving credit to George Soros and what he claimed some while ago.
George used the example of an inverted square root sign: some up and down followed by a long flat closer to the bottom than the top.
Posted by: MrRational | July 23, 2009 7:35 AM
I think it will be L shaped - down and then flat for quite a long time. And we're not at the bottom yet, at least not in MD.
Posted by: Jelena | July 23, 2009 2:03 PM