We're witnessing the end of a 400-year process that made property owners feel like investment geniuses. Three historical waves created this illusion: stolen Indigenous land enabling seemingly endless expansion, decades of falling interest rates inflating asset values, and continuous population growth generating new demand. All three have permanently ended. Yet landlords and city planners still operate as if these conditions will return, holding properties vacant rather than accepting reality.
Look at State Street's empty storefronts. Property values no longer reflect local supply and demand — going forward they will be determined by global capital flows and interest rates. During the zero-rate era, investors paid premium prices assuming endless appreciation. At today's normalized 4-5 percent rates, these properties are worth 30-50 percent less. Real estate generates no innovation premium but owners remain anchored to peak valuations, waiting for the next growth wave.
That wave will not come. We've exhausted ecologically viable land. Population growth has essentially stopped. The interest rate decline from 1982-2020 won't repeat. Workforce participation is already maximized.