Real Estate

Real Estate Bubble Burst? Wonderful!

Realtors and real estate developers around the country are bemoaning the fact that the real estate market has slowed down in recent months. Rising interest rates, shortages of building materials, and the weather hurricanes Katrina and Rita specifically have served to stop and in many places reverse the upward trend of both existing home sales and new housing starts.

Wonderful! What has been a boon for real estate brokers and developers has not been so good for people at the bottom of the economic scale. Many workers who five years ago could have bought a home of their own have been priced out of the market; both commercial and residential real estate development has bulldozed distressed properties that provided housing for poorer people and displaced those people in the process; and gentrification, the process of rehabbing existing homes and converting industrial buildings for upscale lofts and condos has shifted the demographics of entire sections of cities, in the process also displacing poor people in favor of the well-to-do.

The financial consequences of the recent real estate boom have yet to be fully seen. Foreclosures are up as homeowners with variable mortgages see their monthly payment rise along with interest rates, while people who took on interest-only mortgages watch in dismay as the value of their house falls, leaving them with more mortgage than home.

Is there a silver lining to this looming cloud? You bet! Falling prices mean more people will be able to buy homes; a slow-down in real estate development may give communities time to take a breath and reassess just how they want to use the land and resources of those communities; and consumers, thanks to Suze Orman and other TV and print financial gurus, are finally educating themselves on the ins and outs of the mortgage game, and with some knowledge under their belts are beginning to make better decisions for themselves.

Maybe we as a society need to take this time to really examine what housing means in this country; to look at the different forms of housing- single-family homes, condos, multi-family rental units, even cluster and cooperative housing - and try to come up with a comprehensive plan that will meet the needs of everyone. Maybe we need to reexamine the recent practice of building bigger and bigger homes on small pieces of land, using up valuable resources, while ignoring deteriorating housing in the poorer sections of towns and cities. And while we're at it, we need to look at the effect of real estate development's impact on the environment.

The real estate boom of the past five years was fueled at least in part by greed; if we create an inclusive housing policy that serves to meet the needs of rich and poor alike, in an environmentally and fiscally sound way, who knows? The next real estate boom may be sustainable for decades.

Aldene Fredenburg is a freelance writer living in southwestern New Hampshire. She has written numerous articles for local and regional newspapers and for a number of Internet websites, including Tips and Topics. She expresses her opinions periodically on her blog, http://beyondagendas.blogspot.com

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