What did you and your family members talk about around the holiday table? At my place, it was: “Hey, you’re an economist. I hear a lot about the housing bust, but how’s it playing out in the lives of real people?” Real people? Not like “record high foreclosure rates”…“the loss of over $2 trillion in housing wealth”…“frozen credit markets”? Hmmm…I’m much better with spreadsheets. It’s an important question, and thankfully, it was thoroughly answered by Peter Goodman in last Sunday’s New York Times. Goodman reported on the impact of the bursting housing bubble in one of the most negatively effected communities in the country—Cape Coral, FL—so you could argue that the article gives the view from one unsettling end of a continuum. But this community is by no means alone, and I haven’t seen a better answer to the question posed by my brother-in-law. I’ll summarize a few key findings, but the strength of the piece is its focus on the downstream impacts of the bust, specifically the way it’s rippling through the local economy, affecting everything from unemployment to crime.
