What really caused the real estate meltdown? A lot of Republicans blame Bill Clinton, because of the Real Estate Reinvestment Act, which they say made it too easy for certain, usually non-white people to buy houses instead of continuing to live in Mr. Potter's slums. Even Mayor Bloomberg of New York says the Feds did it. Others, like Jeff Rubin, blame the price of oil. Now Christopher Leinberger notes another cause in the New York Times: the collapse of the car-dependent suburban fringe. It is due to a dramatic demographic shift that is causing cities to boom while the suburbs empty.
Many boomers are now empty nesters and approaching retirement. Generally this means that they will downsize their housing in the near future. Boomers want to live in a walkable urban downtown, a suburban town center or a small town, according to a recent survey by the National Association of Realtors.
The millennials are just now beginning to emerge from the nest — at least those who can afford to live on their own. This coming-of-age cohort also favors urban downtowns and suburban town centers — for lifestyle reasons and the convenience of not having to own cars.
According to a recent survey by the National Association of Realtors, only 12% of future homebuyers want the suburban-fringe new house. Everybody is selling and nobody is buying, so the prices keep going down. It is perhaps simplistic to blame the whole thing on this, when there was the small matter of the subprime industry and the price of oil, but it is certainly a factor.
More in the New York Times