This Week's Dire Prediction About Home Prices

When the National Association of Realtors says the housing market is crashing, can there be any doubt? A new report from the NAR on June's homes sales spurred an especially sober round of prognostication yesterday about the supposed popping of the real-estate bubble. “Housing has had a great five-year run,” sighed one expert in The New York Times, whose story, like many across the country, cites the building inventory of unsold homes, and a one percent dip in the rate of home sales compared to last June, as evidence that "the housing industry appears to be moving from a boom to something that is starting to look a lot like a bust."

The NAR's report is actually more optimistic than any of the press reports let on—but then the realty industry naturally keeps its chin up in the darkest of times. The data does contain some genuine cheer. Though the pace of single-family home sales fell, the decline in the number of houses that sold was not as steep as the NAR had predicted, and the national figures hide some significant regional differences. The rate of existing home sales dropped the most in the West, off 17 percent compared to last June, and that was not enough to shake the average price of a home, which stayed even at $342,000. In the Northeast, despite a slowing of 3.5 percent, existing home prices actually rose more than seven percent.

Existing home sales don't help the building industry, which is clearly overextended. It's no coincidence that the Times begins it dour tale by citing the giveaways developers are forced to come up with to sell their product. (Our favorite desperate developers' perk is the community water park.) There's no doubt that those who treat houses as commodities, whether mass builders or individual investors, need to weather a down market. The rest of us should avert our eyes whenever real-estate stories rear their heads.

Suburbs Unsafe for the Combat Ready

Congressional Republicans have tried to engage certain voters with their "Suburban Agenda," a package of legislation focused on college loans, public schools, children's safety and other close-to-home issues. This Washington Post article suggests suburbanites are looking further afield. In several of this fall's tighthttp://www.blogger.com/img/gl.link.gifest congressional races, incumbents in suburban districts are in trouble because they supported the Iraq war, and in Illinois a female helicopter pilot who lost her legs in Iraq is threatening to take an open seat now held by retiring GOP dean Henry Hyde.

Since the Vietnam Era, the suburbs have been counted as the bedrock of "The Silent Majority," that segment of the population who are too busy (or self-absorbed) to turn out for political causes, but who tacitly support the current administration. The Iraq War has brought the fight out in the suburbs, however. This year July Fourth saw demonstrations, often led by that species of generic American called the "suburban mom" deep in the heartland. Nowhere is the trend more surprising, perhaps, than in Westchester County, the leafy suburban district north of Manhattan that sent six full buses to anti-war marches three years ago, and the home of , a protest group that holds weekly rave-ups opposing the war.

Hard Words About Suburban Hipsters

When we heard that Urban Outfitters was making its big move into suburban malls and Main Streets, we resisted making grand statements about a broader cultural shift. Selling urban hip in the suburbs didn't make the suburbs hip, after all. Now comes some hard numbers—fittingly, from Mike's Hard Lemonade--that "suburban cocktail culture" has overtaken city clubbing among our nation's young people. A survey conducted for the makers of the bottled alcoholic drink found that "78% of American adults now say going to a BBQ and get-together in the suburbs is more fun than going out to bars and clubs in the city. And it's not just suburbanites that feel that way -- 72% of adults living in urban environments say so as well."

While we suspect that "the suburban cocktail culture" is a confection akin to Mike's new "mike-arita," which seems to have spurred the survey, it's no surprise that young urbanites are more fond of gathering around a Hibachi than club-hopping: urban-hip as they may be, the majority of Americans under 30 grew up in the suburbs--the first generation for whom that is true—and backyard entertaining makes them feels at home.

Last Round for Cul-de-Sacs?

Have cul-de-sacs hit a dead end? People who live in these polyp-shaped, elegantly named "courts" love them for their quiet and neighborly charm, and developers like the way they maximize space for building. But town planners are increasingly trying to discourage cul-de-sacs, since the extra houses make more cars dependent on fewer through streets. Ninety percent of Oregon cities have outlawed them, according to this story from the McClatchy News Service, and Minnesota officials are also moving against them. Other northern states are expected to follow, and for good reason: one of the biggest headaches of cul-de-sacs is where to plow the snow in winter.

Hello, Young Buyers!

Amid concern on New York's Long Island that the real-estate boom has priced out young couples and families, Newsday throws down an article showing how many 20-somethings have managed to buy a place of their own. The heart of the piece is the data, often cited here, showing that Gen-Y has become a large part of the suburban housing market. "The homeownership rate for people under age 25 jumped from 19.3 percent in 1982 to 23.6 percent as of the first quarter 2006," it says, citing U.S. census reports. "For buyers between the ages of 25 and 29, the homeownership rate rose from 38.6 percent to 41.0 percent for the same time period." Behind the trend is the increased safety of loaning to untried borrowers, thanks to improved tools for measuring who's a risk, and the emergence of the secondary mortgage market, which allows small banks to reduce their exposure by selling their mortgages to bigger institutions. Another help are piggyback loans—mostly in the form of home-equity loans—that allow cash-poor buyers to finance 100 percent of the cost of their new homes.

But the 20-somethings in the article say affording a home means more than being savvy about credit. "Things will definitely be tighter," says a 26-year-old homeowner, "It's going to be a lot of tuna fish in the beginning."

The Newsday story includes a 5-point sidebar on smart home investing.

This Week's Dire Prediction About Home Prices

Here's the riddle of the current real-estate market, as reported this week by the Los Angeles Times: In California's San Bernadino County, the number of homes sold is down 14 percent from this time last year. The price of a home, however, is up by the same percentage. In Ventura, the market is bailing, moving 24 percent fewer homes than this time last year, but the price of a home is up more than 7 percent. Only in San Diego has growing inventory brought the median price of a home down, by one percent compared to last July's numbers. With supply growing, the question is, why aren't prices falling faster?

One answer is that sellers aren't desperate enough to drop prices. It's impossible to tease motivation out of sales data, but the opposing market vectors suggest that many sellers aren't selling out of necessity. They have been lured into the market by the high prices and they have a number in mind. The price they can get for their current house, therefore, is driving the pace of sales, not the other way around. Another answer is that the inventory of homes hasn't reached true downturn proportions. It would take less than six months to sell off all the properties on the SoCal market today. While this is twice what it was two years ago, one analyst put it this way: " "We're getting closer to a normal market." And that's still a good thing.

The enigma wrapped inside the realty riddle is that builders keep adding to the housing market at an alarming rate. Earlier in the week, the Times ran this article, about the rampant, disturbing but altogether classic, development trend in the Antelope Valley, northeast of L.A.

Green Acres

New suburban development historically claims small farms, contributing to a movement away from the land. But two recent stories show how traditionally rural activities are adapting to suburban encroachment. Near Fort Wayne, the 4-H Club, which has taught farm kids their parents' business for generations, is expanding the range of topics for members' projects to include robotics and small-animal husbandry. West of Boston, backyard livestock is catching on among suburban moms as a way of making sure their families are eating wholesome, organic eggs and meat. "Hens are one of the few animals you can have in a suburb without much work," a Needham resident tells the MetroWest Daily News. Authorities are concerned the trend will create under-the-radar pockets where bird flu could fester and grow. But for now, the main downside may be the amount of quiche the microfarmers are forced to eat to keep up with their layers.

How the Automobile Changed Hyphenated America

While most of the stories on immigration in the burbs this year have focused, like the debate in Congress, on illegal immigrant laborers, the Associated Press taps into the other way the suburbs are growing more diverse: highly educated middle-class immigrants from India and other south Asian countries. Long Island, N.Y.'s Newsday ran the AP tale of Indian tech workers clustered around Albany and other upstate New York cities. Like any suburban transplants, they pass up city life for better schools and more space. Like other immigrants they come to suburbs because that's where the jobs are. Like previous generations of self-exiles, they try to preserve their culture, but not always, as with urban immigrants, by living in enclaves. Dish-TV allows the Tamil family in the AP story to keep up with home news, while the automobile allows the south Asian community to spread itself across the entirety of New England: the Albany Hindu temple's 130 worshippers include some who drive from as far away as Burlington, Vt.

Hill No Longer Overlooks Suburbs

Columnist Morton Kondracke tracks the rise of the GOP's "Suburban Agenda," a legislative package spearheaded by Illinois Republican congressman Mark Kirk. Kirk's essential insight is that congressional Democrats are focused on city voters, whether the uptown elite or the downtown minorities, while the conservative Republican ascendancy is based in the rural South; the great mass of suburban voters, Kirk says, are there to be claimed by the party that addresses their concerns about school safety (the first bill to pass in the agenda was a background check on public school new hires), college costs, and preservation of open spaces. That these voters have already been the focus of the past several electoral seasons as "soccer moms" and "soccer dads" seems to go unnoticed, but we've been following the progress of the Suburban Agenda and will continue to do so.

When Is a Suburb Not a Suburb?

Seattlest, the blog about Seattle, faces the question: Is a suburb that is no longer dependent economically on its city, that has broken the 100,000 population mark and is the fifth largest city in the state, still a suburb?

The debate about Bellvue originated on Wikipedia, which gives this list of suburban communities with at least 100,000 residents.

Mesa, Arizona (Phoenix)
Elk Grove, California (Sacramento)
Henderson, Nevada (Las Vegas)
Paradise, Nevada (Las Vegas)
North Las Vegas, Nevada (Las Vegas)
Hialeah, Florida (Miami)
Aurora, Colorado (Denver)
Lakewood, Colorado (Denver)

Meanwhile, Back to the Ranch

For years, the hottest architectural style in the shelter magazines has been Midcentury Modern, the glass and steel boxes of the 1940s, '50s and '60s that today embody the retro gleam of the Space Age but accommodate the open, Zen-calm interior high-end designers prefer today. Examples have shown up prominently in the movies (see the Richard Neutra house that starred in 2001's "The Anniversary Party") and they are glorified in their own magazine with its winking ironic name, Atomic Ranch.

A more recent, and more shocking, trend is the reprise of the lower order of ranch—brick or sided single-level or split-level homes that populated the suburbs from the '60s on—that has long been the very image of suburban bland bad taste. The first inkling of this development came a dozen years ago, when the markethttp://www.blogger.com/img/gl.link.gif in Long Island's East End became so tight that dumpy-looking G.I. Bill ranches were being spruced up as Hamptons getaways. Another milestone was Princeton, N.J. interior designer and architect Bruce Norman Long's transformation of a traditional ranch near New Hope, Penn. Long replaced the living room's plate glass with a row of vertical windows and added columns around the front door.

But trendy buyers have no interest in masking the true nature of these suburban staples. Instead, they are decorating with period furniture, preserving their linoleum, cork walls and other original materials, and generally treating them as antiques. "The Ranch has not only survived," say the authors of "Updating Classic America: Ranches", "it's on its way to timelessness."

Catch a Rising Star

The New Yorker's post-mortem on the United States' World Cup soccer team includes a oafish sideswipe at suburban soccer programs. Over in Gelsenkirchen for the U.S.-Czech Republic game, the magazine's legal affairs writer Jeffrey Toobin is awed by Czech striker Jan Koller ("no one has quite the same combination of graceful athleticism and lurid menace...") and falls to bemoaning the lack of similar balletic brawn on the American team. The fault is somehow to be found in the suburbs. Toobin's article wants to convince us that "soccer in America can't quite transcend its suburban roots." He continues, "Soccer in the suburbs serves mostly as a bridge between Barney and Nintendo; it's a pleasant diversion, not a means of developing brutes like Jan Koller, to say nothing of the magicians who stock the Brazilian team."

The founding generation of any sport in this country has never, however, come from the suburbs--at least, not yet. A young sport is generally populated by the hyphenated Americans of the middling classes first, minorities or the sons and grandsons of immigrants: in the 1920s and '30s, the glory days of of Major League Baseball was keyed by Italian-Americans like Joe and Dom DiMaggio or German-Americans like Lou Gherig. Today, the explosion of Hispanic immigrants, from countries where soccer is a treasured sport, nearly guarantees that the United States will eventually bear its soccer stars. Hispanic soccer associations, often run by churches like the Irish and Italian CYO Leagues of an earlier generation, are already operating in many places. Established suburban leagues are already looking to draw talent from those leagues.

As it happens, unlike the urban champs of old, who grew up playing inner-city sandlot ball or boxing in city gyms, these Hispanic soccer worthies are likely to come out of the suburbs, where their parents gravitated to as the nation's biggest job growth areas. Toobin may be right that the Nintendo playing suburban sector will never produce a Ronaldinho, but a suburban soccer star is almost certainly being
born or made as we speak.

The New Yorker hasn't put Toobin's story online. It can be found in the July 3 issue of the magazine.