Over the last couple of months, I have become a big fan of “Househunters”,
a half-hour show that appears nightly on the House and Garden cable TV
network and that is as ritualized as Kabuki. It starts usually with the
introduction of a couple and their children who have outgrown their current
house or apartment. If they are renters, they make clear that their dream
is to own something. They see a house as an investment. Renters watching
this show cannot help but feel that they are losers.

They proceed to go out with a realtor and evaluate 3 houses like
Goldilocks. One house might be too expensive, the other too small, etc.
Typically, the 3rd house is the one they make an offer on–it is usually
the most expensive. After the final commercial, they get a call back from
the broker who breaks the good news to them that their bid has been
accepted. The final minute or two consists of a tour of their new house,
with their moved-in furniture and a fresh paint job usually. The family
cannot be happier.

While the househunters are usually heterosexual, there is a lot of a
metrosexuality on display even from blue-collar husbands who feel
comfortable describing a house under evaluation as having “charm” or
“character.” I can’t imagine my own deceased father speaking that way. When
he bought our house back in 1958, it was strictly to relieve the constant
pressure from my mother and not because he had dreams of backyard
barbecues. He was a truckdriver before WWII and would have been content to
continue living in the apartment above a nightclub in our rural upstate NY
village. My mother thought that it was not a healthy place to raise
children, since I spent far too much time in the kosher slaughterhouse
behind our apartment building staring in wonder at ritual chicken-slashing.
I also enjoyed hanging out in front of the nightclub in the evenings with
the “greeter”, a former professional boxer and heroin addict named Barney
Ross. Ross, who was a Jew like the nightclub owners, my family and just
about everybody else in our village, had acquired his drug habit at a
veteran’s hospital where he had been given morphine for wounds suffered at
Guadalcanal.

Next week or so I finally will close on the sale of my parent’s house. My
mother went into a nursing home last May and I have spent nearly $20,000
and close to a month getting it into shape. The proceeds of the sale will
allow me to stay in my apartment in Manhattan’s Upper East Side, where the
rent has now gone up to $2100 per month. At first I had hopes to purchase a
co-op or condominium with the proceeds of the sale of my house but have
discovered that the real estate bubble in Manhattan makes that impossible.
The median price of an apartment in NYC right now is one million dollars.
It is as if somebody had just given me $20 and invited me to go into
Bloomingdales and buy all the clothing I wanted. My current plans are to
purchase an annuity that will pay out about $750 per month for the next 20
years. After that, the money is gone and I will have to make new plans. Of
course, by that time I will be 80 years old and just happy to be alive.

Back in 1981, I had dinner with Peter Camejo and Jeff, an old friend from
Bard College who has been a Nation Magazine subscriber since the 1950s and
who has strong social democratic politics. The subject of the feasibility
of socialist revolution came up and Jeff as might be expected argued that
it was not possible because workers were imbued with petty-bourgeois
values. To my surprise, Camejo–who had been thinking outside the box for a
very long time–responded that there was much truth in that, especially
since home ownership is so pervasive in the USA.

On March 26, the NY Times reported:

“Real estate-crazed Americans have started behaving in ways that eerily
recall the stock market obsession of the late 1990s.

“In Naples, Florida, some houses have been bought twice in a single day, an
early-21st-century version of day trading. Buying stocks on margin has been
transformed into buying homes with no money down. The over-the-top parties
of Internet start-ups have been replaced by flashy gatherings where
developers pitch condos to eager buyers.

“Five years ago, the cable channel CNBC sometimes seemed like a backdrop to
daily American life. Its cheery analysis of the stock market played in
offices, in barbershops, even in some bars.

“Today … home-improvement shows are the addictive fare that the exuberant
stock shows once were.”

It turns out that the same psychology that drove the stock market boom of
the late 1990s is now at work in the real estate market today. One
speculator mentioned by the Times “owns two condominium units around Fort
Lauderdale and one in Miami Beach, all bought during the last year, in
addition to the one where he lives. He plans to sell one of the Fort
Lauderdale condos in June for a price he believes will be double his
investment.”

David Lereah, chief economist of the National Association of Realtors,
argues in his new book, “Are You Missing the Real Estate Boom?” that real
estate investors will “experience substantial and satisfying wealth gains”
into the next decade.

The Times wonders if this book will end up like “Dow 36,000,” a best seller
in late 1999. The authors were convinced that stock prices “could double,
triple or even quadruple tomorrow and still not be too high.”

If the same thing happens to real estate that happened to stock market
investors, the consequences might be profound. Even now, some of the
problematic underpinnings of the real estate boom are becoming undone,
especially variable mortgage rates. With variable mortgages (something I
utilized to finance improvements to my house), the interest rate you pay to
the bank can go up if interest rates in general go up. Last month I noticed
that my payment jumped from $60 to $65.