With Lust In Our Hearths

It's just past deadline in the newsroom of the New York Post and Braden Keil is on the phone with an unhappy executive. "Hi, Don," he says, greeting Donald Trump Jr., 30, who works for his father's firm. Earlier in the day Keil, who writes the tabloid's "Gimme Shelter" real-estate gossip column, had received a tip that rapper Jay-Z would be moving into a $65,000-a-month Trump penthouse. Keil called Trump to confirm the story, and now, with the column locked up, Trump has finally called back to try to talk Keil out of running the item. Keil chides him for being late—but promises readers won't be left thinking Trump's people leaked the item. Keil began writing "Gimme Shelter" in 2000, at the beginning of America's great real-estate boom, but he believes its appeal transcends boom and bust. "They're two of the basic human needs—shelter and gossip," Keil says. The next morning, the Jay-Z piece leads the column.

The existence of a real-estate gossip columnist is just one indicator of our fascination with homes, which continues even as housing values have fallen. The real-estate meltdown and the subprime lending crisis were big business stories last year—and with most forecasters expecting the market to languish, they'll remain a focus in 2008. In the past year, the average U.S. home value has dropped around 6 percent, and few economists think we've touched bottom yet. By 2009, according to Congressional researchers, 2 million families may face foreclosure. And as consumers fret and builders pull back on construction, the housing slump may yet tip the U.S. economy into recession.

While the economics of the real-estate crunch are familiar by now, the boom-and-bust cycle have been driven by more than supply and demand. Like the dot-com craze that preceded it, the run-up in home prices was fueled partly by psychology, as so many of us dreamed of trading up, renovating or building from scratch—and so many dinner parties devolved into real-estate gossip, whether it involved Jay-Z or the neighbors up the block. Indeed, during the heyday of the boom, many of us spent far too much time talking about, valuing, shopping for, refinancing or just plain ogling houses. It's a set of behaviors I call House Lust. Even in the currently gloomy times, there's ample evidence that much of this obsession remains intact. The Web site Zillow.com, which gives users an estimate of their home value (along with those of anyone else in their address book, from bosses to former boyfriends), continues to attract 4 million monthly users. This year, Americans will still spend more than $170 billion remodeling homes. And even as the market weakened last year, a survey by Boston Consulting Group showed 55 percent of Americans figured their homes were still gaining value—a level of optimism that borders on delusional.

Real estate has always had a peculiar hold on the American psyche. Several of the founding fathers were land speculators, and many of us still idolize Donald Trump and devote rainy afternoons to Monopoly. But during the early 2000s, this fascination magnified. That's partly because of buoyant home prices, but there were other forces at work. As Americans' saving rate dropped to zero, homeowners became more dependent on rising home values to save for them. (Homes are an appealing form of wealth: after all, your 401(k) may be a better investment, but it can't host a barbecue.) Easy refinancing made it simple to turn this rising home equity into cash, so it's hardly surprising we kept a close eye on its value. And with the news dominated by an unpopular war, the housing boom became an uncontroversial topic for neighborly chatter, not unlike the weather.

For more evidence that our home obsession continues, click on HGTV weeknights at 10 ET. There you'll find "House Hunters," a documentary-style show that follows couples as they shop for a home. It's HGTV's highest-rated program, and even as prices sag, its ratings have continued to rise. On any evening, there's a good chance Annabella Gualdoni and Jeff Webb will be watching. The two friends, who live outside Boston, are self-described HGTV addicts. So one winter night, over Chinese food, I commandeered an easy chair and joined them for an HGTV marathon. Watching an episode with Gualdoni and Webb is like taking in an NFL game with hard-core fans who paint their faces and scream at the refs: they take these shows very seriously. Gualdoni, a lawyer-turned real-estate investor, loves to critique the on-screen houses, providing catty commentary. "You want to see something really ugly, to be able to go 'Man, those people have bad taste,' " she says. By contrast, Webb loves to treat real-estate TV like a game show. At the climax of every episode, when the "House Hunters" have toured three homes and must decide which one to bid on, Webb poses three questions: Which house will they buy? Which house should they buy? And which house would he buy?

Inside HGTV, producers have become adept at finding new ways to draw viewers. At 3:30 one afternoon in a Manhattan office tower, Beth Burke, a former VH1 producer who now oversees several HGTV shows, is on the phone with the producers of "Get It Sold." On this new show, real-estate pros assist families who are struggling to sell their home by helping them "stage" it—jettisoning clutter, moving furniture and making cheap cosmetic fixes. Burke has seen photos of a Virginia home being considered, and she's not convinced it's ideal. "The house looks kind of a mess?" she asks the field producer. "It's a total mess," the producer says. "It's not like [the owner is] shabby, but she has a collector's mentality—she just can't de-clutter."

Like other reality makeover shows, many of HGTV's programs depend on the "before" being compellingly bad, so that the home's transformation is sufficiently dramatic. Inside HGTV, they call this "the oops factor," and it's one variable they manipulate to keep ratings high. When Burke began working on "House Hunters" in 2005, she helped discover another variable. As a newcomer, she found it annoying the show didn't tell viewers exactly what each house costs. So she decreed that if the show's guests wouldn't disclose what they paid, they couldn't appear. "You know what?" she says, smiling. "People would rather be on television than not say the price of their house." Once "House Hunters" began disclosing home prices, ratings soared; since then HGTV has created entire shows—like "My House Is Worth What?"—in which the drama comes from revealing the value of homes.

The appeal of these price-driven shows illustrates a broader fact: we're endlessly nosy, and thanks to the Web, there's far more openness about what our homes are worth. Consider Zillow.com, launched in 2006 by an Internet executive who was frustrated by his inability to find sales prices for homes in his neighborhood. Many users claim Zillow's estimates, based on tax information and a proprietary algorithm, are wildly off-base, but no matter: within weeks of its launch, Zillow was being used as a verb as friends Zillowed each other's homes. Bobbie Conti, a Seattle data analyst, recalls being surprised when a friend readily admitted to Zillowing her. "It wasn't this sheepish thing," Conti says. "I would have waited a while to admit it."

As the boom recedes into memory, it's easy to dismiss our exuberance for homes as a fad. Some aspects of the bubble have already faded. For instance, many of the half-million people who became real-estate agents will likely leave the profession. But in other ways, having lived through the real-estate boom will prove for some to be a life-altering experience, in the same way the dot-com era changed attitudes about the attractions of working for a start-up or being paid in stock options. After watching too many hours of "Flip That House," a lot of us will still devote weekends to executing home makeovers large or small. Even as the pain of the foreclosure crisis spreads, would-be investors still flock to auctions. Frazzled baby boomers who desperately seek a refuge from their 24/7 work lives continue to pine for a charming beachfront getaway. Our homes may no longer be making us rich, but living through a half-decade when we believed they would has changed our perspective. Even in a bust, House Lust lives on.