Moving & Relocation: The End of Suburbia?

Two interesting reports came out today that deal directly with the housing market. The first is the Federal Reserve beige book, which surveys data in key economic sectors from around the country. The report is mostly positive in a moderate sense, but when it comes to housing, the outlook darkens considerably:

Nearly all Districts reported that housing market conditions continued to soften, though several noted that activity increased in some markets. Most Districts reported higher home inventories, and several said that homebuilders and sellers continued to offer incentives to attract buyers....Rent increases were reported by New York, Minneapolis and San Francisco, with Dallas indicating that pricing power was shifting to landlords.

That squares with the typical end of a housing bubble--as owners scramble to get affordable housing in a balloon market, landlords play OPEC and decide to jack the prices of rentals up to whatever they can get away with.

The second bit of news is a report from the Center for Housing Policy that finds the costs of high commutes outweigh low mortgage payments for residents in the 'burbs. If you think you're getting a deal by owning vs. renting, you may be, but the costs of gas, car maintenance, tolls, bus passes, etc., can wipe all of that out. More about this from Brad DeLong.

This is the price of the exurbian exodus. People are so desperate to have land and own a home to use as a bank that they'll willingly sacrifice hours upon hours in long commutes, spend tons on gas, and end up even further behind the 8-ball than when they started. As DCist notes, this could be solved by workforce housing and better public transportation, but the elephant in the room is still overpriced homes.

Prices have to fall, not only for a sustainable future for the homebuying economy, but for the sake of maintaining lifestyles for people who may not want to give up their lives being stuck on the toll road. Read yourself some Kunstler and see if you're willing to make the change.

Posted at October 12, 2006 05:56 PM

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Two interesting reports came out today that deal directly with the housing market. The first is the Federal Reserve beige book, which surveys data in key economic sectors from around the country. The report is mostly positive in a moderate sense, but when it comes to housing, the outlook darkens considerably: Nearly all Districts reported that housing market conditions continued to soften, though several noted that activity increased in some markets. Most Districts reported higher home inventories, and several said that homebuilders and sellers continued to offer incentives to attract buyers....Rent increases were reported by New York, Minneapolis and San Francisco, with Dallas indicating that pricing power was shifting to landlords. That squares with the typical end of a housing bubble--as owners scramble to get affordable housing in a balloon market, landlords play OPEC and decide to jack the prices of rentals up to whatever they can get away with. The second bit of news is a report from the Center for Housing Policy that finds the costs of high commutes outweigh low mortgage payments for residents in the 'burbs. If you think you're getting a deal by owning vs. renting, you may be, but the costs of gas, car maintenance, tolls, bus passes, etc., can wipe all of that out. More about this from Brad DeLong. This is the price of the exurbian exodus. People are so desperate to have land and own a home to use as a bank that they'll willingly sacrifice hours upon hours in long commutes, spend tons on gas, and end up even further behind the 8-ball than when they started. As DCist notes, this could be solved by workforce housing and better public transportation, but the elephant in the room is still overpriced homes. Prices have to fall, not only for a sustainable future for the homebuying economy, but for the sake of maintaining lifestyles for people who may not want to give up their lives being stuck on the toll road. Read yourself some Kunstler and see if you're willing to make the change.