This has little to do with the housing market broadly speaking: In cities like New York, San Francisco, and Boston, prices are rising and homes are sold within days of listing. Rather, it’s a sign that suburban neighborhoods straight out of Mad Men are no longer as in-demand as they once were. Around Boston, for example, 51 towns and suburbs started the year with price declines while the city’s prices skyrocketed. Indeed, as Blackwood drives me through this picturesque New England town just an hour from New York, we pass dozens of for-sale and for-rent signs outside homes set back from the road. These are homes that, one day, might have been on any family’s dream list, back when suburbs were where everyone wanted to live and there were dozens of companies to work for nearby. Median home values in Fairfield County, where New Canaan is located, are down 21 percent from their peak in 2003, according to Zillow; for the state as a whole median home values are down 18 percent from their 2004 peak. By contrast, home values nationwide are down just 5 percent from their 2005 peak. In urban areas, they are up—often substantially; in Boston, Charlotte, Portland, San Francisco, and Seattle, prices this year have set record highs. [...]
It might not be too big of a jump to suggest that these parts of New England are starting, slightly, to resemble the Rust Belt. Connecticut, for instance, faces $26 billion in unfunded pension liabilities as retirees lived longer and the state failed to contribute an adequate sum. Three of the four major ratings agencies maintain a “negative” outlook on Connecticut’s credit. Manufacturing jobs have been trickling out for years; in cities such as Bridgeport and New Britain, graffiti-covered empty warehouses with broken windows haunt the skyline, reminiscent of Detroit. [...]
The trend of companies moving to cities also hasn’t helped. Between 1975 and 2005, 90 percent of the jobs created in the New York region, which includes suburban Connecticut and New Jersey, were created outside New York City, according to Chris Jones, chief planner with the Regional Plan Association, a research group that studies the New York-New Jersey-Connecticut region. In the last 10 years, 90 percent of the jobs created have been in New York City. In the past decade, New York City has added 600,000 jobs, while the entire rest of the region has added just 88,000. “It’s a reversal of what it was through most of the postwar period,” he said. “You have very slow economic growth and at the same time you have high prices, particularly housing prices” in the suburbs, Jones said.
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