Allen Greenspan, the retiring chairman of the Federal Reserve Board, offered a sobering assessment of the US economy in his final sermon to the congregation economic. He is especially concerned about the housing market. The online service of theWinston-Salem Journal, Journal-Now.com, reports that in his speech in Jackson Hole, Wyoming, Mr Greenspan worried that:
Low interest rates have powered the booming housing market. Home sales have hit record highs four years in a row, and house prices are surging. In previous speeches, Greenspan has warned of "froth" and "speculative fervor" gripping some local housing markets.
We experienced firsthand some of that "froth" and "speculative fervor" this past weekend.
Barbara and I returned to my ancestral hometown Saturday for a wedding reception for the son of a young man (now 63) from the church I pastored in Brooklyn. We had a couple of hours between the ceremony and the reception, so we decided to return to a few old haunts... at least the few that remained in Stamford, a city on the go, where, unlike 1949 when I departed that small manufacturing town, the steel and glass towers now rival New York City. We passed the corner where for two summers I rendezvoused with a flat bed truck for days of unloading freight cars of such things as cement bags, bricks, lumber, and tile piping, all for the princely sum of $1.15 an hour. We drove past the hospital where I was born and where my mother died.
Arriving in the old neighborhood, we stopped in front of a house with a for sale sign in front of it and flyers describing the excellences of the residence. Here is said flyer:
One or five of you out there will recognize 17 Hillside Avenue as the home of Harold and Evelyn Howard, built, contrary to the date on the flyer, in 1932, just in time for a newborn baby boy to start life in a house with all of the up-to-date conveniences, like a walk-in, tiled shower, a large cedar closet, a sunparlor, a side porch, three bedrooms, one and a half baths, a coal-fired furnace for radiant hot water heating, a garage for a car we didn't have, and a spacious lawn where Mom could plant her peonies, rhubarb, and strawberries. An added advantage was the house's proximity to my mother's sister, my Auntie Em, who watched over Bobby like a fairy godmother, dispensing new clothes every Christmas and Easter, and defending me from her son's readiness to torment me whenever I got too close.
In my reveries in 2002 as mandatory retirement approached, I fantasized about buying the old house. Wouldn't that tie up my life in a nice bow, coming full circle? Barbara wasn't keen on the idea, and I could readily see that the house might be a tad too small for a family of five accustomed to the space we enjoyed in Valley Stream. And we had heard a few uncomplimentary assessments of the public schools, which, I quickly add, did just fine by me personally. So we went to West Hartford and bought a relatively new (1981) house with most of the conveniences we wanted.
Barbara, who if she had been born thirty years later would have been an architect, persuaded me to park the car and look around the old house. The stone fireplace my father built was still there on the back lawn. The peonies were gone. The hemlocks were now thirty feet tall. A new door had been put on the garage. But the side window was broken... as it was by my groomsmen in June of 1955 in their desire to outfit my Hudson Super Six with horseshoes and tin cans. The small toilet at the back of the kitchen had been expanded. But weeds abounded, Guinness bottles filled a galvanized pail in the garden, and the general impression was "tired."
For the sake of a little suspense, I erased the asking price from the flyer posted above. Here's the picture of the house again, with the address and the price:
The memories I keep of that place are priceless, true, but how on Allen Greenspan's earth could it be worth $700,000? Talk of a housing bubble: this is a housing blimp. I couldn't have afforded it even if I had followed my fantasy. If the present owners (and I haven't any idea who they are) are calculating their net worth on the basis of their assumed housing equity, and spending accordingly, I would have to change the "froth and speculative fervor" to "delirium and speculative madness."
Jesus told a financial parable about a farmer with huge crops who built bigger and bigger barns to store it all, only to die when the last silo board was nailed in place. What precisely this story has to do with 17 Hillside Avenue, I'm not quite sure. But I'll suggest a similarity between that farmer and those of us being swept along in the financial excesses of the new millennia. I don't exempt myself. For I do have to remind myself more often than every now and then that, as my nephew might put it, the quality of life is more important than (and not necessarily dependent on) the number of toys (think cars and electronics gadgets and exotic vacations) we are able to buy.
Prophet Greenspan seems to be saying that if we don't cool it, reality will bring us down with a jolt. Let's just hope the jolt will be a lot less damaging than 1929.