In yesterday's New York Times we were greeted with the stunning news that the viability and the very continuance of suburban and ex-urban neighborhoods is now and will in the future become increasingly threatened by escalating costs of gas, heating oil, and natural gas. They cite a study and analysis done by Moody's:
"In Atlanta, Philadelphia, San Francisco and Minneapolis, homes beyond the urban core have been falling in value faster than those within urban areas."
Their analysis affirms that the process is already underway. Long commutes and large homes, costing a small fortune to heat will come to be seen increasingly as "white elephants" in a dawning age of home downsizing and regentrification of downtown America. The article talks about the eventual abandonment of homes, tracts, and even towns that families can no longer afford and for which buyers become increasingly rare.
This doesn't square with a number of facts and as a result their conclusion is misleading and needs to be, at the very least. reigned in.
Facts: In favor of their argument,
1- Housing tracts are in fact being abandoned but only those of recent origin that were populated by owners who were mistakenly given sub prime loans they could neither understand nor afford.
2- Homes are being abandoned in those regions like Florida where speculators assumed prices could only go up and have been learning that depreciation in value makes the monthly carrying costs increasingly onerous.
3- Potential buyers who could slow the number of people who are giving up and mailing their home keys to the banks holding their mortgage are holding back until they sense a bottom to the market. No one wants to invest in something whle it is dropping in value.
4- Partially complete and even some completed developments are being abandoned because of the "buyers strike" just mentioned.
5- Homes unable to be sold that are surrounded by others in foreclosure and subject to vagrants, break-ins and the mining of copper pipes are felt to be dangerous environments and therefore not worth the candle.
Facts: which contradict their argument,
6- Not all suburbs are unaffordably distant from places of work or doing business. In fact, many people work in the very suburban or ex-urban town in which they live.
7- Most long existing American suburbs will not be subject to the same risks of abandonment.
8- The whole argument rests on the assumption that what has recently been occurring in the housing market will go on indefinitely. Economic history tells us otherwise.
9- The price of fossil fuels will not continue to rise uninterruptedly. Nothing goes straight up. If nothing else the housing bubble should have taught us that. Things have already been set in motion that will eventually turn the tide. To cite one. As prices of fuel rise the demand for fuel will diminish, not only in the US but everywhere that prices rise.
10- Thousands of buyers are waiting on the sidelines, perched and ready buy when opportunity costs turn in their favor.
NIMBY = Not in my backyard
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