At Business Insider, Gregor MacDonald writes in “The World Has Little Use For A Suburban American Single Family Home Priced Over $250K” (boldface mine):
If there’s one asset the world has little use for, it’s an American single family home priced above 250K, reachable only by car.
The great, post-war buildout of America’s suburbs relied upon the continuance of a favorable arbitrage between rising wages, and low transportation costs. Now that this profitable scheme has come to an end, it should be no surprise that Robert Shiller remarked this week that housing “may not recover in our lifetime.”
…the majority of American homes, in order to capture any future increase in value, will need to benefit again from rising wages and flat to falling energy costs. At the current juncture, those are two trends unlikely to appear any time soon.
But the one he forgets is that people aren’t just buying houses, they’re buying schools. More accurately, they’re buying student bodies, especially ones without lots (or any) poor students. What will really determine if MacDonald’s prediction will come to pass is the ability of high-density areas to provide good public schools. As long as areas near high-quality transit systems–that is, cities–are forced to be warehouses for the poor due to suburban zoning laws, homeowners will be forced to choose between their children’s education and transportation. To date, it’s pretty clear they’re not worried about ‘non-green’ transportation.