What lies beneath the current housing crisis is the American Dream.
People happily living the cul-de-sac life may not feel the need to pick up this book, but they should. It has value for all of us. With The Cul-de-Sac Syndrome, we gain a better understanding of the American housing crisis as author John F. Wasik takes a thoughtful look at the tradeoffs in the American way of life.
Far from the days of the “real estate is the best investment” mentality we learned from our parents, today we’re faced with collateral damage from a boom gone bust. Investment brokerages went broke. The U.S. government seized Freddie Mac and Fannie Mae, deeming them too big to fail. The troubled assets relief program, TARP, propped up the nation’s financial system in desperation, while job losses, store closings, and foreclosures grew across America.
Fully explaining the cause and effect of this spiral, Wasik, a finance columnist for Bloomburg News, shares frightening statistics to back up his thesis on how and why this cyclone of circumstances occurred.
Much has to do with housing, and the sprawling urban areas Wasik dubs “spurbs.” In The Cul-de-Sac Syndrome, he explores a combination of many financial and cultural ailments that led us to a dead-end in private American housing, from planning and city development to business and history.
“The craving for upward mobility through home ownership escalated even as families on the verge of 'making it' were falling behind economically,” says Wasik. As their finances eroded, and people lost access to health insurance, we now have more than three million homes in danger of facing foreclosure in 2009.
During the boom years, people pulled money out of their homes for spending, lifestyle upgrades, college and vacations, nearly $600 billion in 2004 and 2005 alone, he says. Americans who never lived through a major downturn didn’t think they needed to save. They continued to reduce the value of their homes through mounting debt; unaware the market could, and would, turn sharply.
In time, upgrading lifestyles led to the McMansion scene across America, where "bigger and better" never seemed to stop. “Why go to a bank to see a grandiose marble floor when it could be in your very own bathroom or grand entrance,” says Wasik.
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