At just past 10 a.m. one morning this week, auctioneer James Regan stood in the driveway of a large home in central Massachusetts, ringing a handbell. After reading aloud a foreclosure notice, he looked up at the 40 or so onlookers—realtors and clients, bankers, a few curiosity-seekers (including me)—and asked for someone to open the bidding on 2 Copperbeech Circle. The 5,381-square-foot home is still under construction; inside, the family room is missing half its flooring, and the kitchen lacks counters or appliances. A hundred yards away, a similar completed house sold for $2.3 million—but since then, the real estate market has softened and the developer building this neighborhood has run out of money. That led the bank to foreclose on this entire half-built cul-de-sac, and today the five properties—three partially built homes and two vacant lots—were being auctioned off, one per hour. “Do I hear $500,000?” Regan asks. A woman in a tan pantsuit raises her bid number, and the first auction was underway.
Spring is usually a hot time for house hunters, but so far this season, Americans seem to be doing more looking than buying. This week the National Association of Realtors announced that in March, existing homes sold at a seasonally adjusted annual rate of just 6.12 million units. That’s an 8.4 percent drop from February—the sharpest month-to-month drop in nearly two decades—and an 11.3 percent decline versus last year. Economists blamed the weather and the tightening of lending standards by mortgage underwriters who’ve been hurt by rising default rates (particularly on subprime loans) and are becoming more risk-averse when deciding who deserves a loan. The good news is that so far, the soft housing market hasn’t taken a toll on the stock market, which has been setting new records. The bad news is that nearly two years after the U.S. housing boom began to ebb, it’s not clear when the real-estate market may return to full speed.
While the sluggishness affects anyone thinking of selling their home, it’s especially hard for builders and developers—like the one whose sad denouement I witnessed on Copperbeech Circle. Building neighborhoods has always been a risky, boom-and-bust business. It’s a world skillfully depicted in a new book by veteran author and University of Pennsylvania architecture professor Witold Rybczynski. In "Last Harvest: How a Cornfield Became New Daleville," Rybczynski spent several years following a developer as he worked with engineers, architects, builders and town officials to win approval to construct 120 homes on the far edge of Philadelphia’s suburbs.
The book falls into the established genre of the construction narrative. In the early 1980s, Tracy Kidder followed along as a Massachusetts couple, their architect and construction crew built a custom home, a journey he portrayed in "House." In the late 1980s, NEWSWEEK’s own Jerry Adler tagged along as a Manhattan developer toiled to create a midtown office tower, a story he told in "High Rise: How 1,000 Men and Women Worked Round the Clock for Five Years and Lost $200 Million Building a Skyscraper." Unlike Kidder or Adler, Rybczynski isn’t a reporter, but his account benefits from the fact that relatively few Americans live in either high-rises or custom-built homes; instead, the majority of us live in developments more or less like the one whose creation he’s captured.
Much of the book is an illustration of just how much red tape developers must slice through before starting up their bulldozers. During the real-estate boom, builders liked to cite these bureaucratic, not-in-my-backyard hurdles as a key reason the supply of new homes is limited, which they they hoped would keep home values escalating. In "Last Harvest," Rybczynski takes readers inside this endless (and expensive) series of planning-board meetings and zoning rigmarole. The town and the developer squabble over just how many houses can fit on Mrs. Wrigley’s old farm; over how to dispose of residents’ sewage, and whether picket fences should be made of wood or vinyl. Much of this drama is decidedly quiet (one chapter is entitled “More Meetings”), and the result is a story unlikely to be optioned for a big-screen popcorn movie.
Still, it’s an interesting account that evokes some sympathy for developers, who are too often portrayed as greedy, Trump-like figures intent on spoiling our natural landscape. In contrast with that caricature, Rybczynski’s developer-heroes really care about the look and feel of the neighborhood they’re building, and of how functional it will be to the people who buy homes here. Unlike developers building XXL trophy homes—like the ones I saw being auctioned off in Massachusetts—the developers at New Daleville aimed to create a subdivision that utilizes so-called Traditional Neighborhood Design, a variant of the New Urbanist philosophy. That means the lots would be small (one-eighth acre, on average), streets would be narrow, the garages would be behind the reasonably sized houses (accessible via alleyways) and the front porches would be plentiful.
Since Rybczynski is an architecture professor, readers might expect a hint of disdain about the vinyl-sided, mass-produced homes that, by the end of his narrative, are starting to fill up Mrs. Wrigley’s old farmland. But in fact, he sees merit in the simple, unornamented designs that go on sale here, and in the process of explaining how Americans came to prefer these homes, he also offers a smart, swift tour through the country’s embrace of ranch-style and split-level homes in decades past.
For the developer, the fact that the real-estate market slowed in late 2005, just as New Daleville’s builders began trying to sell homes, was unfortunate. But for Rybczynski, it was a blessing: the book’s final third is enlivened by the fact that after years of thoughtful toil by the developer, the builders face a real struggle as they try to convince homebuyers to pay $340,000 for homes on tiny lots far from the city.
By the end of the book, New Daleville’s construction has only just begun, but thanks to price cuts and smarter marketing by its builders, it seems to be on track to become a fully inhabited—and for its developer, a profitable—neighborhood. While most readers will never visit this new subdivision in person, they’ll emerge from "Last Harvest" with a new appreciation for the network of sidewalks and shadetrees, ranches and split-levels that make up their own neighborhood.
Back in Massachusetts, the bank that foreclosed on the Copperbeech cul-de-sac was less fortunate than Rybczynski’s developer. At the first house on the block, several people offer back-and-forth bids as auctioneer Regan, clad in a bright red sportscoat and American-flag tie, tries to nudge them higher. But the bidding stalls out at $650,000 for a house that, according to the building permit, carried a construction budget of $1.1 million. So Regan calls a two-minute break in the bidding and huddles in the backyard with the attorney for the local bank that’s foreclosed on the loan. When he comes back and no new bidders materialize, he says the bank is bidding $904,000—presumably the lowest offer it would have accepted—to take the house off the auction block. The same scenario unfolds at the next house: after a couple of half-hearted, half-million dollar bids from potential buyers, the lender bids $750,000 and ends the auction.
It’s just one sad scene from a moribund housing market that, for now, shows no signs of accelerating.