THE AFFORDABLE AND ACCESSIBLE HOUSING CRISIS MARCHES ON.
THE 17 MAY WaPo HAS A ‘MUST READ’ FOR THOSE WHO HAVE NOT BEEN PAYING ATTENTION.
THIS AND OTHER ENTERPRISE MEDIA STORIES ON THE HOUSING MARKET ARE IMPORTANT FOR WHAT THEY SAY AND EVEN MORE IMPORTANT FOR WHAT THE DO NOT SAY OR SAY IN CONFUSING WAYS.
On the front page of WaPo for 17 May there is an important story on Housing. Read it from end to end and one finds the headline “Healthy signs in the area’s housing market” is VERY misleading.
The story, when one takes into account the sources of the ‘he said / she said’ quotes, is ‘correct’ AND it disproves the headline.
For a more complete picture see CNN Money’s 13 May story “Foreclosures plateau – finally. Repossessions soar” and their 17 May story “Housing market diagnosis: Bipolar.” Also see the 15 May story in the New York Times “Building Is Booming in a City (sic) of Empty Houses.” As the colleague who called this article to our attention said: “… for ridiculous, unsustainable, wishful thinking that is oblivious to too many realities to count… this is actually scary.”
Back to the 17 May WaPo story:
As EMR’s beautiful wife said: “We did not learn a thing for that story.” True, but most citizens do not even know that much about what is happening in the shelter industry and the prospects for ending the Affordable and Accessible Housing Crisis.
If you have been distracted by the oily slime you might find the story useful. If you read the story or do not bother, here is a short list of the problems:
Vocabulary:
What territory are they taking about? They refer to:
“the Washington area”
“the region”
“the area” (several times)
“the Washington metropolitan area” (no capital ‘M’ or ‘A.’)
From the context, it is clear that most of the references are to DIFFERENT geographies.
Data:
Almost every sources of data has a different reference geography and most of the specifics are about county “A” or county “B” without regard to the relative location of that municipality vis a vis the Centroid of the SubRegion.
The most significant omission and source of confusion in the WaPo story is the complete lack of attention to the variation of Housing market conditions by Radius Band.
If one understands that Prince William County is a major part of the R=20 to R=30 Radius Band in Virginia (the rest of the R=20 to R=30 Radius Band is the eastern part of Loudoun County) one starts to get some sense of what is happening.
Read the story with this in mind and new insights come to the surface.
NB: Arlington, Alexandria the Federal District are inside R=10. Note what Gregory Leisch of Delta Associates says is the reason that there has not been a big drop in house prices in those jurisdictions. He and John McClain of GMU’s Center for Regional Analysis both make good points in response to the questions they were asked.
The most important fact that is obscured by the WaPo story is that the biggest problems are in the R=30 Plus territory of the National Capital Subregion. The story does not even mention a municipality in this geography except for Frederick County, MD and Frederick has a separate set of parameters.
The territory outside R=30 from the Centroid of the National Capital Regions is where the house values have fallen the most. It is also where the most concentrated pockets of foreclosures and underwater mortgages are located.
This is where the lower half of the economic Ziggurat has been pushed to find Affordable (but not Accessible) housing.
This is also where many of the Wrong Size House / Wrong Location dwellings are located. These dwellings were sold to those who should have known better and could have qualified for house that met their shelter needs – as opposed to their real estate speculation fantasies – closer to their Jobs and Services.
One can get a glimpse of what is going on because Fauquier County makes up part a substantial part of the R=30 to R=50 Radius band in Virginia. (Most of the rest of this Radius Band is the western part of Loudoun County as well as parts of the Greater Fredericksburg SubRegion which has its own set to circumstances due to the Jobs and Services in the I-95 Corridor and inside the Clear Edge around the Core of that SubRegion. As noted above, the same is true for Greater Frederick, MD.)
In Fauquier County the newspaper of record publishes real estate closings each week. Over the past month, the listings of foreclosures have continued to be at near record levels with the listed sales are primarily short sales and bank sales. Essentially nothing has sold for more than 70 percent of its 2007 value for reasons outlined in the stories quoted above.
In the meantime, the same paper ran a story on 12 May titled “Housing shows signs of strength” which can be characterized as “builders and real estate agents whistling past the grave yard” if one understands what the WaPo story and other coverage documents. It fact it is almost as bad as the New York Times story about Los Vegas, but not nearly as funny.
The bottom line is that builders nation-wide will try to build ‘cheap’ houses in scattered locations. That will continue to sour the market for resales as suggested in the New York Times story. Dysfunctional settlement patterns will continue to propagate.
The result will be an overbuild of Too Big Houses AND an overbuild of Too Cheap Houses – ALL in the Wrong Locations. For those who came in late, that means Housing that is NOT near Jobs / Services / Recreation / Amenity.
This will be due to the fact that citizens do not have the information they need to make intelligent decisions in the market – or intelligent decisions in the voting booth. Check out the primary results tomorrow night.
EMR’s next Current Perspective item will address those attempting to create SubRegional ‘economic growth’ by finding ways to expand the Urbanized area of the National Capital SubRegion.
Geographic Illiteracy is a terrible thing.
EMR