Rachael Brownell is a financial analyst with three kids, but every so often she and some friends get together for a girl's night out. They'll wipe off the baby drool, dab on some makeup, don high heels, and head to an Irish pub near their homes in Bellingham, Washington. They'll drink mojitos and maybe flirt a little with the cute bartender. And as the night unfolds, the women's conversations grow deeply personal. What do they really think of being a mom? What do they really think of their marriages? And inevitably, the talk turns to another topic that's close to their heart: their houses.
"Real estate falls into that category of intimate things—'What do you really think of your house?'" Brownell says.
Outwardly, Brownell's gang has no reason for discontent. Each has a kitchen with the granite countertops, stainless-steel appliances, and hardwood floors that have become the standard markers of suburban success. And yet... for each of these women, something is missing. One woman confides that while her house is perfectly adequate, she longs to move to something larger, with a master bedroom further away from her children's rooms. Brownell, who recently moved into an airy, high-ceilinged, built-from-scratch home, admits that she has longings, too. "My house is really pretty, with plenty of room, but it just doesn't do it for me," she says. "My artistic imagination isn't lit up by it—it's too much 'practical,' and not enough 'dreamy.' It's a little soul-less."
Her longing for something different is why, at home the next day, Brownell is likely to be online, cruising real estate websites. She's not actually shopping for a home–she's just seeing what's out there. The hours she spends on sites like Realtor.com are a voyeuristic hobby that's not much different than her friends' devotion to magazines like Martha Stewart Living. But Brownell is only half-joking when she calls her online house habit "a sad addiction"—and she's not at all kidding when she admits to clicking on these sites nearly every day. Her husband can take solace: at least she's not cruising Match.com.
Down the coast in San Diego, Susie Sincock has a different way of satisfying her interest in other people's homes: she watches hour after hour of HGTV. Sincock, a twenty-nine-year-old mother of three, says shows like "House Hunters" (which follows couples, documentary-style, as they shop for homes) are among the few kinds of programs she and her husband, Andy, enjoy watching together. In the last year Susie has watched at least 100 episodes. When the Sincocks watch, they tend to do play-by-play: "That tile is hideous," or "The backyard is atrocious—don't buy that one!" Lately they've begun watching a newer show called "Flip This House," in which investors buy beat-up homes and do quick renovations before selling them for big profits. Susie and Andy rent, but debating what they like (and don't like) about these TV houses has helped them prepare for the day when they'll buy. "It's a good way to communicate and dream together," she says.
Across the country in Philadelphia, Nicole and Marc Lombardi's home fixation is a far more active pursuit. In late 2006 the couple bought a 1925 home in need of serious updating. So they routinely come home from work and head straight for their toolbox, spending evenings and weekends ripping down drywall, replacing fixtures and getting quotes for professional help. Their typical weekend might include three separate trips to Lowe's or Home Depot. Nicole says they have a master plan for fixing up each room—and executing it could take 10 or 15 years. Young couples have always bought fixer-uppers, but Nicole, age 30, sees her friends far more engaged in this activity than their parents or grandparents. "It used to be that if you needed a new sink, you went to the hardware store and bought one," she says. "Now you can spend hours and hours online, picking out the style of faucet, the kind of metal. You don't have to be a professional to do it, and there's this world of possibilities." The Lombardis love looking at their made-over spaces, and they show off before-and-after renovation photos as aggressively as some new parents tout baby pictures.
Many of us would be thrilled to take a look. For the last few years, everywhere you turn Americans have been talking about, valuing, scheming over, envying, shopping for, refinancing, or just plain ogling homes. The writer Daphne Merkin has described this widespread yearning as Real Estate Lust, "a condition whose symptoms include a compulsive scanning of real estate ads and incessant discussions of who paid what for how much, as well as a fascination with the size and shape—down to the number of bedrooms, closets and bathroom windows—of apartments and houses that belong to people other than ourselves." Washington Post columnist Eugene Robinson diagnoses the condition as the moment when "a house or an apartment becomes not just a place of shelter or an emblem of status or even a considered investment, but an obsession that haunts us no less intensely than Vladimir Nabokov's nymphet Lolita tortured the imagination of poor, sick Humbert."
To my ear, "real estate lust" sounds too economic, too transaction-oriented. It's too focused on profits-and-losses, and doesn't capture all the complicated, non-financial emotions that come into play when we think about our homes. Most of us aren't in love with the game of real estate—we're obsessed with the trophy at the end. So I prefer a simpler coinage: House Lust.
Rachael Brownell, Andy and Susie Sincock, and Nicole and Marc Lombardi suffer from it. Maybe you do, too. As comedian Jeff Foxworthy might put it, if you can instantly identify whether a countertop is made of Argentine Balmoral or Giallo Imperial granite, you may have House Lust. If you've visited the website Zillow, which estimates home values, and plugged in the addresses of friends, co-workers, and exes to see how much their houses are worth, there's a good chance you have House Lust. If, upon hearing that a friend has bought a new home, you can't resist asking its square footage, the lot size, and the year it was built, it's very possible that you have House Lust.
Homes and real estate have always had a peculiar hold on the American psyche. Our founding fathers considered land ownership a prerequisite to voting. A generation later, their pioneer descendants settled the west, drawn largely by an irresistible lure: cheap (or even free) land. We still tell our children the story of the Three Little Pigs (the moral: build the sturdiest house you can), and spend rainy afternoons marching pieces around Monopoly boards (the lesson: the key to profits is location, location, location). And for decades, many people have had a Sunday-morning ritual that has nothing to do with church: Over coffee, they read the real estate listings, even if they've no intention of buying or selling a home.
But in the last generation, this fascination turned to an all-consuming pastime. "Before the last decades of the twentieth century, it is striking that there was relatively little public discussion of home prices," writes Yale economist Robert Shiller, who scoured a century's worth of newspapers to better understand real estate's role in the American psyche. But as prices rose sharply in the late 1990s, many of us began to chatter incessantly about our houses. In recent years if you went to a dinner party in San Francisco, Boston or Miami, the housing market almost certainly came up somewhere between the first cocktail and the last bite of dessert. This banter has become so ubiquitous that commentator Michael Kinsley has even proposed a system that would utilize it for predicting home price movements—one he calls the Dinner Party Index.
Much of this chatter focused on the question that forms the undercurrent of every boom: How long can the good times last? You don't need an economics degree to realize that home values can't continually appreciate at 20 percent a year, as they did in parts of the country during the first years of the twenty-first century. In retrospect, there's little doubt that the people's obsession with homes weren't just a side effect of the boom. The ways in which their obsessions manifested themselves actually helped drive the boom higher, as home values were pushed upward by frenzied buyers, would-be flippers and overblown renovations. Sure enough, by late 2005 it was clear that the housing market had peaked, and the boom was over. In 2006, For Sale signs began languishing in yards of homes that not long ago inspired bidding wars. Home prices in many regions began falling. Soon it became painfully apparent that many people had stretched too far to buy homes that were too expensive. Foreclosure rates began to soar. Mortgage companies began to fail. As this book went to press late in the summer of 2007, analysts were predicting that home prices would fall nationwide for the first calendar year since the Great Depression.
For a time, the housing bust felt like the all-too-predictable coda to the irrational exuberance of the boom. But suddenly, as real estate woes sent financial markets reeling and threatened to send the economy into recession, the bursting of this bubble felt far more ominous. As the Federal Reserve and the White House took steps to reassure the markets, the housing bust claimed status, for a few news cycles at least, as a full-blown national crisis.
During this boom and the ensuing bust, newspapers and magazines devoted acres of space to covering it. Much of this discussion focused on examining the economic forces that drove the cycle—and debating who deserves blame for letting America's home-philia get so out of hand. Should Alan Greenspan's Federal Reserve have let interest rates remain so low for so long? Should lenders have given so many loans to millions of high-risk "sub-prime" borrowers? Should real estate agents have encouraged buyers to aggressively overbid for homes in hot markets? Was it really wise that so many Americans came to regard it as perfectly normal to borrow against the equity in their homes to pay off a credit card or fund a trip to Disney World?
Those questions interest me, but they're not the subject of this book. Instead, my aim is to explore the behavior and psychology that drove the boom—and how those behaviors and psychology helped contribute to the bust that followed. How did home renovations come to routinely turn families' lives upside down? Why do thousands of us now watch reality shows about home-flipping or house hunting? Why did so many people decide to start investing in real estate, or quit good jobs to seek a fortune selling houses? How did House Lust become so contagious?
In HOUSE LUST, I travel the country to examine these and other questions, meeting memorable characters and having a lot of fun along the way.
Excerpted from House Lust by Daniel McGinn Copyright © 2008 by Daniel McGinn. Excerpted by permission of Currency, a division of Random House, Inc. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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