Wednesday, August 06, 2003

Want to Own a Home? Move to Fort Wayne, IN

From of all places The New York Times:

Not a single house in Fort Wayne — a small, manufacturing-heavy city halfway between Chicago and Detroit, with a jobless rate below the nation's — has sold this year for more than $800,000, according to real estate industry data. That is roughly the average price of a two-bedroom apartment in Manhattan.

"The real housing boom is fairly concentrated," said Mark M. Zandi, the chief economist of Economy .com, a research firm. "And at the moment, it is clearly keeping the economy afloat in those areas."

There is no such cushion throughout much of the nation's interior. Some economists argue that the Federal Reserve's aggressive interest rate cuts might have been more effective at ending the economic slowdown if the gains in house prices — and the potential they create for consumer spending — had been more broadly shared.

Last year, Tom and Judy Auer sold the four-bedroom Fort Wayne house where they raised their three children for $107,900, or slightly less than the $34,000 they bought it for in 1974, after adjusting for inflation. Without a bonanza from the sale, the couple now live in a smaller house in Fort Wayne, relying on the pension from Mr. Auer's job as a hardware salesman at Sears, Roebuck and Social Security, which they began drawing early.

Marva and Bill Herx, on the other hand, left Fort Wayne in 1998 to move to the Philadelphia suburbs for his job. When they returned last year, they had made enough profit selling their Pennsylvania house — for about 40 percent more than the purchase price — that they were able to move into a house in Fort Wayne noticeably bigger than the one they had left.

"The home costs in Fort Wayne have stayed pretty much the same," said Ms. Herx, who is in her 50's. "In Philadelphia, we made a good profit in just four years."