Real estate can be an engine or a brake for the U.S. economy. And today, it's mostly slowing things down.
The housing market, since it was the epicenter of the crisis, is also central to the feeble recovery, says Ethan Harris, an economist at Bank of America Merrill Lynch.
Everything is interconnected: Employment is closely tied to construction spending, which is 25 percent below what it was in 2006. And because property values remain low, many people are mired in debt and can no longer rely on home equity to help them out of it.
The decline in property values is also preventing small businesses from using equity to expand. And lower property values mean lower property taxes, which dents government spending on everything from teachers to police officers.