Dallas's New (Old) Boomburbs

Not so long ago, Dallas's inner-ring suburbs were going the way of the dodo bird. Young couples, tired of long exurban commutes and flush with realty-boom dollars were moving downtown, "buying up 60-by-140 foot lots and stacking them with 4,000 square feet of living space," Nathan Halsey, a Dallas-area builder told House & Garden magazine in 2006. Fighting back, residents of suburban redoubts like Lakewood and Vickery Place formed conservation districts to protect early 20th century cottages and Modernist slab houses, many of which had been only recently reclaimed from years of neglect.

So it's nice to see a piece like this weekend feature in the Dallas Morning News, about the centennial celebration happening in Winnetka Heights, a nabe in the Oak Cliff area of the city. Founded in 1908 and sold by developers as "an ideal suburb," Winnetka Heights is a mix of grand homes and Craftsman cottages, earning it an historic designation in the early '80s. (The area was also home to the Southland Ice Company, the first store in a chain that became 7-11.) That vote of confidence from the city encouraged homebuyers to restore the larger dwellings that had been broken into apartments to single-family homes, and A combination of good schools, diverse population and a "live-and-let-live" attitude, according to one resident, make it emblematic of a suburb that's adapted succesfully to urban pressures.

The Crash That Wasn't, Part V

The argument on this blog, since before the real-estate bubble popped, has been that a collapse of home prices is unlike the collapse in technology stock prices in the early 2000s, or the bubble now being forecast in environmental technology. The difference is pretty simple: a lot of tech-bubble money was invested in startups that promised to deliver unneeded services, or ones already provided efficiently by the offline market. And if a green bubble is indeed brewing, it's because there is more money being aimed at developing carbon-reducing technology than there are legitimate products to fund. Historically, that leads to unrealistic investments, and a crash.

Alex Tabbarok, a economist at George Mason University, makes the obvious point in today's New York Times that housing is neither unneeded nor overfunded. "Much of the increase in prices was a rational response to changes in fundamental factors like interest rates and supply," writes Tabbarok, noting that "land is hard to come by in places like Manhattan and San Francisco," and other coastal areas where people seem to prefer to live. Even in inland areas, Tabbarok adds, "zoning and other land-use regulations have made [housing] scarce." As a result, he predicts that home prices will settle at about 2004 levels. While there was speculation and while we feel bad for anyone who was forced to buy at the peak of the market, for most 2004 is not a bad number. We seem to remember that prices for houses then made them an insanely good investment.