Homes over 4,000 sq feet see sales increase

The hottest part of the 2015 housing market may have just been large homes:

Homes 4,000 square feet or larger saw a sharp jump in sales last year, rising 30 percent from a year earlier, according to data from the U.S. Census Bureau. Meanwhile, sales of homes of fewer than 1,800 square feet barely budged from their year-earlier figures.

That’s shifting the new home market in favor of bigger, more expensive homes, catering to the tastes of Americans with higher incomes. The median size of new single-families homes reached almost 2,500 square feet last year, an all-time record, Census found. Much of that growth is coming from sales of ultra-big homes, the type of showpiece properties that sell for well above the median sale price of $232,500 for existing U.S. homes.

See the full 2015 Census housing report (764 pages!) here.

Three quick concerns with the CBS story on this data:

  1. Large houses are not necessarily McMansions. Here, the term is used as shorthand for a large house but the term typically implies garish architecture, mass produced, and in a suburban setting.
  2. Although the story may be correct that “ultra-big homes” are driving these numbers, the Census categories top out at 4,000 or more square feet. This story doesn’t offer data about extra-large homes – it just cites the average price of Toll Brothers homes.
  3. The first line of the story is this: “If there’s a sweet spot in the real estate market, it may be catering to the desires of the 1 percent.” Again, the “1 percent” is probably shorthand for wealthier Americans but you don’t have to reach those levels of wealth to buy a home of 4,000 squar efeet.

Do these three points invalidate the headline: “McMansion redux: Big homes are back”? Perhaps they are evidence of reporting that could be more exact. The story does hint at the growing size of new homes – which is a trend several years in the making:see previous posts here from March 2015 and here from November 2013 as well as this CBS August 2015 headline “McMansions are back – and they’re bigger than ever.

 

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Chicago as “ideal venue” for sailing competition

Chicago has plenty of sports events and will soon be the first freshwater host for the America’s Cup World Series:

The event organizers have marketed the Chicago round of the America’s Cup under the tagline “the Windy City is made for this.” While Chicago received its Windy City moniker from its long-winded politicians, the venue is nonetheless expected to have the waterfront breeze necessary for an exciting regatta. Even moderate wind pressure will allow the series’ fleet of high-tech carbon fiber catamarans — the yachting equivalent of Formula 1 race cars — to raise onto their hydrofoils and achieve speeds upwards of 40 knots (roughly 46 miles per hour). Because the racecourse is located entirely within the confines of Chicago’s protective breakwater, safety concerns over rough water are also eliminated.

Course conditions aside, perhaps Chicago’s greatest advantage for hosting such an event is the city’s uninterrupted shoreline. While the constant invocation of Chicago’s master planner Daniel Burnham has become somewhat of cliche these days, the America’s Cup can certainly thank his Plan for Chicago for allowing the city’s lakefront to develop as publicly-accessible recreational space rather than commercial and industrial wharfage.

Burnham might not have envisioned this, particularly with the city’s emphasis on industry and a lakefront and river banks that were covered with rails and shipping facilities in the early years. On the other hand, what took so long to move the event to a freshwater location that offers (1) a protected harbor and (2) a world-class city?

 

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Determining “essential concepts” and “essential competencies” for sociology

A new book suggests academic disciplines – like sociology – would benefit from defining “essential concepts” and “essential competencies.” Here are some of the outcomes for sociology:

To come up with learning outcomes in the selected six disciplines, which collectively account for more than 35 percent of undergraduate student majors in the U.S., the Measuring College Learning project began by contacting disciplinary ssociations in each field. Those groups helped select 10 to 15 faculty members to lead the work — a total of 70 professors participated…

In sociology, for example, one of the five essential concepts is the “sociological eye,” which means students “will recognize key theoretical frameworks and assumptions upon which the discipline is founded and differentiated from other social sciences.” That underpinning, the book said, includes founding theoretical traditions (Marx, Weber, Durkheim, Mead), a critique of rationality to explain human behavior and how social forces affect individuals.

Socialization is another essential concept, which is defined as students understanding the relationship between self and society, and how the self is socially constructed and maintained at multiple levels.

On the competency side, the panel said undergraduates in sociology should be able to apply scientific principles to understand the social world, evaluate the quality of social scientific data and use sociological knowledge to inform policy debates and promote understanding, among other essential competencies (there are six total).

I imagine this would generate a lot of discussion among sociologists about the merits of these kinds of outcomes, what is essential to the discipline (particularly at the undergraduate level), and how these might be accurately assessed.

On this general topic, is sociology uniquely positioned because of its emphases and skills (ability to see the big picture, focus on social structures, variety of methods, etc.) to contribute to assessment conversations?

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One TV show had a higher rating – so change the ratings

Nielsen will change how they measure TV viewing as ratings continue to drop:

Despite the May axing of 19 first-year series and such surprise dumpings as ABC’s Castle and Nashville, cancellations are proving rarer, even as linear ratings shrink. That’s because, of the 60 returning scripted series to air on the five main broadcast networks this season, only one finished with improved ratings from the previous year. And that show premiered in the ’90s. Law & Order: SVU‘s modest gain, up an incremental 4 percent during its 17th cycle, is a case study in how the industry standard week of DVR and on-demand views doesn’t provide the most complete narrative any longer — or at least not one that the networks are eager to tell.

“We have found that audiences continue to grow beyond seven days in every instance, some by 58 percent among adults 18-to-49,” says Nielsen audience insights senior vp Glenn Enoch. “Growth after seven days is consistent, but the rate of growth varies by genre. Some programs need to be viewed in the week they air, while consumers use on-demand libraries to view others over time, like animated comedies and episodic dramas.”

To that end, on Aug. 29, Nielsen will up the turnaround on live-plus-7-day reporting (no more 15-day wait time), offering daily rolling on time-shifting, and it will start extending the tail past the long-established extra week of views. The measurement giant announced in March that the window for regularly reported on-demand and DVR data now will extend to 35 days after the original airdate.

The extra draw between weeks two and five is not minor for many scripted series. Grey’s Anatomy, again ABC’s highest-rated drama in its 12th season, saw its live-plus-7 average in the key demographic drop 3 percent from the previous season. But the 35-day trail of VOD (with online streams) adds another 1.5 rating points among 18-to-49, making for a 6 percent improvement from the show’s 11th season. (Of note: 1.5 is the complete live-plus-7-day rating for Thursday neighbor and surprise renewal The Catch.)

Certainly viewing habits have changed in recent years as viewing options proliferate. But, it is hard also not to see this as an attempt to chase numbers to provide advertisers (which leads to more money). If only one show showed an improvement from the past season (and a Law & Order in its 17th season), change the system of measurement. Perhaps this is the true acknowledgment that television will never be the same: the best solution to declining ratings is not to put together better content or to put together a new consolidated model but rather to chase viewers to all ends of the earth.

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Suburbs consider mottos, branding efforts

In an effort to stand out, a number of Fox Valley area suburbs are considering mottos and branding campaigns:

Oswego is looking for a motto, as well as a logo and marketing strategy, to better identify its image and solidify its place in the region.

Michele Brown, community relations manager, said Oswego wants to be a regional destination for economic development and tourism…

Carpentersville’s slogan is “Building a Better Tomorrow…Today.”

Village officials, including staff and board and commission members, are working on a rebranding campaign with the goal of changing Carpentersville’s public perception…

North Aurora last year went through a rebranding process that came up with a new logo and the motto “Crossroads on the Fox.” This came after months of debate over nine design options with dozens of variations.

Usually, these are pitched as efforts to attract businesses and residents. Think of those Bedford Park or Elk Grove Village ads that run in the Chicago area – having a catchy motto or campaign sounds better in an advertisement. Whether such campaigns work or simply help the community feel better about its efforts is another story. At the least, branding is an effort at local boosterism as businesses and residents can choose among hundreds of Chicago area communities.

But, not every suburb wants such branding:

Some towns, though, have made a conscious decision to not wear the label of a slogan or motto, like Wheaton, Naperville and Carol Stream.

Presumably, these are communities that are more comfortable with who they are and/or don’t feel like they have a negative public image.

Of course, mottos can signal things other than being open to growth like New Lenox which was selling itself in ads as “home to proud Americans.”

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American homeownership was originally not about an investment

One writer suggests Americans have bought into the lie that houses are good investments:

Would it surprise you to know that if there are two equally expensive houses—one for rent, one to buy—the person who buys will pay 40 percent to 50 percent more each month? That’s what happens when you factor in property taxes, insurance, maintenance fees and assorted fees like repairs—which almost nobody does…

The truth is, most of what we’ve been raised to believe about owning a house simply isn’t true…

Run the numbers. Yale economist Robert Shiller found that from 1890 to 1990, the return on residential real estate was just about zero after inflation.

ZERO.

This trend toward seeing homes as a good return on investment is a recent development. Perhaps it hints at the commodification – and a need to see a potential return on investment – of everything.

But, if owning a home is not a great investment, why do Americans still privilege homeownership? Here are some historic reasons:

  1. Land is valuable. In the past, people needed land to some degree to survive. Think of all those tenant farmers in the Middle Ages who always had to pay someone else. Or think of sharecroppers in the United States. Land equaled food or the ability to run a business on your property. Additionally, having your own piece of property meant that you could get away from others as well as the government. It is that the home is your castle thing.
  2. Owning a home is a sign of material prosperity. When you are a homeowner, you have made it enough to be able to own and maintain your own property. In other words, you have the resources to waste it. This is the realization of the American Dream as George W. Bush once put it.
  3. Additionally, homeownership is a sign of dedication to your local community. Renters are assumed to be lower-income, transient, and not committed to civic organizations. Homeowners have a stake in their community because they (1) will be there for an extended time and (2) want to protect their property values (though this is also a more recent development).
  4. Combining #2 and #3, homeownership was assumed to keep people invested in capitalism as opposed to socialism. Again, if you own your own property, you want to see it do well rather than hand it over to an outside manager (the state or a landlord).
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Profile of a smaller post-World War II builder

The efforts of Levitt & Sons are well known but here is a quick overview of a smaller “merchant builder” from the Boston area:

The Campanelli Brothers of Braintree, Massachusetts, were one of these typical merchant builders. When Michael, Joseph, Nicholas, and Alfred Campanelli created a construction company in the late 1940s, they were young and inexperienced. Their parents, Francesco Campanelli and Lisa Marie Colondono Campanelli, arrived in the U.S. in 1915 from a tiny and ancient mountain village in the Italian Apennines; they settled in an immigrant neighborhood in the small city of Brockton. The boys were used to hard work, quitting school after their father died to help support the family by working at the Quincy shipyards near Weymouth. Joseph also worked on some house construction sites before World War II. The three younger brothers served short stints in the Navy during the war.

After they came home, the brothers used an army surplus truck to move gravel to big construction sites, including Logan Airport. Soon they began pouring concrete footings for new buildings. As their assets increased, they built two new houses in Brockton, one for their mother and one for their sister Ann, whose husband, Salvatore De Marco, now joined the brothers’ team. They branched out to small developments near Braintree, Massachusetts, and Warwick, Rhode Island. Success there led them to develop more ambitious subdivisions in Natick, Framingham, Peabody, and other areas near Boston. In the process, they assembled a sizable group of foremen and loyal subcontractors, many drawn from their old neighborhood and earlier shipbuilding work. Their firm rapidly grew into the leading home building enterprise in the Boston area, and later built extensively in Florida and Illinois as well.

The typical Campanelli house was attractive because, as one buyer explained it, it was “a new kind of house” for “a new time.” It discarded the old-fashioned, larger, more monumental look. It had a low-pitched roof, like contemporary ranch houses in California, but still kept shutters or an occasional bow window for a faintly “colonial” flavor. Campanelli houses usually had two or three bedrooms, a living room, a kitchen large enough to eat in, and a garage. The three-bedroom version was about 1,000 square feet of living space. In the mid-’50s, the firm extended the kitchens to form a “living kitchen” or a kind of a “family room.”

The last brother died just a few years ago and the company the brothers started did a lot of work:

Campanelli Companies built more than 30,000 single-family homes in eight states during the post-war period.

Here is the company – Campanelli – today and how they describe themselves:

Campanelli is a vertically integrated commercial real estate, construction, development and acquisitions company with over six decades of successful experience having developed, built and acquired over 20 million square feet of property. Campanelli has a trustworthy, successful and experienced team that maximizes value, consistently executes on target objectives and provides operational excellence for your company.

I would love to see a study that compares the (1) home styles (2) buyers (3) interactions with local governments and (4) organizational operations of a number of post-World War II builders. Campanelli started small and became a commercial property developer. Though there are differences, it kind of reminds me of the Harold Moser story in Naperville where a former newspaper owner turned lumber store operator started by building a few homes and then ended up constructing a sizable amount of the large city’s homes.

Additionally, are such family business stories like this still possible today or did the combination of unusual housing needs plus innovations in building create a uniquely open market?

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Explaining Americans’ decline in geographic mobility

Derek Thompson highlights a decline in movement and summarizes what might be behind it:

Between the 1970s and 2010, the rate of Americans moving between states fell by more than half—from 3.5 percent per year to 1.4 percent. “It’s a puzzle and it’s the one I wish politicians and policy makers were more concerned about,” Betsey Stevenson, a former member of Obama’s Council of Economic Advisers, told The New York Times this week. Fewer Americans moving toward the best jobs and starting fewer companies could lead a less productive economy. On Thursday, the Financial Times reported that productivity “is set to fall in the U.S. for the first time in more than three decades.”…

Every dimension of declining American dynamism is connected. The slowdown in most areas’ business development comes from a shifting tide in American migration. For 100 years, population flowed from poor areas to rich areas. Now the trend has reversed. Land-use policies prevent more middle-class families from living in productive areas, because housing becomes too expensive. Meanwhile, the rich can afford to cluster in a handful of metros where entrepreneurship is a norm, while business dynamism falls in the rest of the country. There used to be too much land to settle. Now there’s not enough land to share.

Two quick related thoughts:

  1. You regularly see people make the argument that people should just pick up and move to where there are more opportunities, meaning jobs and a cheaper cost of living (generally referring to housing and maybe taxes). There is even a single case in Evicted where a person moves from a poor Milwaukee neighborhood to a southern city and seems to be doing well. However, moving is not necessarily easy (see #2).
  2. Why are economists the only ones summarized here? Are sociologists not paying much attention to this? On one hand, I can see how economics would drive decisions about moving. Yet, it is not the only factor. People have social connections wherever they live and it can be difficult to form new social networks. While Americans always have prized mobility, don’t they also celebrate finding your roots and being a presence in your community? (Granted, Americans may be doing neither: moving less and being less engaged in civic life.) This reminds me of some public housing residents who didn’t want to leave pretty bad conditions in high-rise buildings. Or, what about explanations like those in The Big Sort or The Rise of the Creative Class where people choose to live near people like themselves.
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Reminder of Facebook’s goal: “to make the world more open and connected”

What exactly is the purpose of all these social media sites? A recent letter to a Senate committee clearly lays out Facebook’s aims:

Facebook’s mission is to give people the power to share and make the world more open and connected.

The rest of the document provides insights into how Facebook selects Trending Topics but the reminder is helpful: the company has broad aims with the goal of having more and more interactions between people around the world. While Zuckerberg has been pretty open about this from the beginning, it is less clear whether this goal is accomplished. My own research with data from the mid to late 2000s suggested users primarily friended and interacted with people they already know or were in some proximity to. If users aren’t making personal connections, perhaps they are more aware of the world through viral videos, news stories, and information that rockets through networks. Does that make the world (1) more open and (2) connected or is there an element of personal connection that also would help?

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Majority of American jobs in the suburbs

An analysis at New Geography shows the metropolitan locations of American jobs:

The 2014 data indicates that more than 80 percent of employment in the nation’s major metropolitan areas is in functionally suburban or exurban areas (Figure 3). The earlier suburbs have the largest share of employment, at 44 percent. The later suburbs and exurbs combined have 37.0 percent, while the urban cores have 18.9 percent, including the 9.1 percent in the downtown areas (central business districts, or CBDs).

These numbers reveal dispersion since 2000. Then, the earlier suburbs had even more of the jobs, at 49.4 percent, 5.3 percentage points higher than in 2014. Virtually all of the lost share of jobs in the earlier suburbs was transferred to the later suburbs and exurbs, which combined grew from 31.4 percent in 2000 to 37.0 percent in 2014. The urban cores had 19.4 percent of the jobs (8.8 percent in the CBDs), slightly more than the 18.9 percent in 2014.

While Chicago is one of the cities with a higher percentage of jobs in the city, Sun Belt locations dominate the list of cities with more jobs in outer suburbs:

These figures counter claims or stereotypes that (1) suburbs are primarily bedroom communities where people sleep but work in the city and (2) urban cores are the primary job centers of metropolitan regions. Of course, some suburbs are bedroom suburbs and big city downtowns are still important, particularly for certain industries (think global finance). At the same time, it would be interesting to envision some of these Sun Belt cities with no downtown…how different would Raleigh or Atlanta or Orlando really be?

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