Housing Roundup: Case-Shiller, Suburbs, and Sprinklers

It’s S&P Case-Shiller day again. This month’s update of the house price indexes, which are for January 2010, continue the recent trend of beingTwo-story_single-family_home slightly down in absolute terms, –0.4% for the 20-city composite, but slightly up when seasonally adjusted, +0.3%.

I would characterize the numbers as being delightfully dull. Obviously, a sharp upswing in house prices would be better for homeowners, particularly the ones under water, but flat is a tremendous improvement over the death spiral that ran from the summer of ‘06 to the summer of ‘09. On a year-on-year basis the 20-city was down only –0.7% to January ‘10. With luck, that number will soon turn positive, something that has not happened since January ‘07.

With not much to report from the indexes, I thought I would take advantage of S&P C-S Day to mention two other house related things that have been bothering me lately.

The War on Suburbs

There is a small but vocal minority of Americans who not only prefer to live in urban environments but object to the manifest preference of most everybody else to live in the ‘burbs. They make noises about sprawl, about big carbon footprints, and about a vaguely defined loss of community, but when you get down to it their objections are ultimately aesthetic and cultural. They just don’t like suburbs.

An example of these folks is the Center for Neighborhood Technology which, according to its website, is “a leader in promoting more livable and sustainable urban communities.” They recently put out a press release announcing a new analysis that purports to show that once you factor in transportation costs, the suburbs aren’t as cheap as they seem.

That is an attractive story and it was dutifully picked up by newspapers and blogs. But (and I’m sure you can guess where I’m going with this) the conclusions are bogus. All the CNT did was find that suburbanites spend more on transportation. They imply this is because they have to, that they need to spend a lot of money getting to and from the big city they foolishly chose not to live in.

But dig deep enough into the CNT website and you can get the paper that describes their model on which the analysis was based. Living in less dense areas and farther from the city center does explain some increase in car ownership and miles travelled, but it’s dominated by two more obvious factors, income level and household size. Households with more money and people tend to spend more on transportation. Suburbanites tend to have more money and live in larger households. So they spend more on transportation.

They probably also spend more on clothes and entertainment, but that doesn’t mean, as the CNT implies, that a person should factor in these higher “costs” when considering a move out of the city.

Sprinklers in the Home?

The latest from the nannystate is an effort to require sprinkler systems in new residential construction. (The kind that put out fires in an emergency. Most new homes have the kind for the lawn already.) Wallet Pop had a good post on this last week which carried an amazing quote from the “US Fire Association” strongly implying that smoke detectors were useless.

As the percent of homes in America that were “protected” with smoke alarms increased from zero to more than 70 percent, the number of fire deaths in homes did not significantly decrease.

My first reaction reading this was that Wallet Pop was having a little early April Fools fun with us. There can’t really be such a thing as the US Fire Association, and if there is, smoke detectors can’t really be a fraud after all, can they?

I was right about the US Fire Association not existing. But there is a US Fire Administration. It’s part of FEMA. And the quote really appears on their website on a page of Residential Sprinkler Myths and Facts. It’s from the fact column, but it ought to be in myths. I am more than a little disappointed about this, as nobody would more enjoy writing a post exploding the Great Smoke Detector Hoax. Alas, no.

Elsewhere on the same USFA site is a comprehensive report on fire in the US which shows that the number of residential fire deaths has been in secular decline for some time and makes the case that smoke detectors deserve much of the credit.

But as good an idea as smoke detectors are, sprinklers in the home are a bad one. They  are expensive (apparently averaging $8,000 per house), ugly, and would add yet another household system requiring maintenance.

About 2800 people died in residential fires in 2008. That works out to about one death per 46,000 houses. Even if we assume that sprinklers are a magic bullet that will guarantee nobody will ever die in a fire, the cost of installing enough systems to save one life a year would be $368 million.

Sure, mandating sprinklers will save lives. So would a nationwide ban on the manufacture or possession of sharp and pointy objects.

[Update: In response to an email I sent them the USFA has corrected the myths and facts page, apparently by taking the whole thing down.]

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