A reader writes:
In 1996 my wife & I bought a small twin house in a modest but decent neighborhood near Philadelphia. Our neighbors were contractors and young professionals saving for bigger homes later. One by one they and their families all moved on.
When our next door neighbors moved they sold to a single mom with two teenaged daughters, the older of whom had a baby. The younger one who was about fourteen when they moved in would very often have groups of rowdy teens gather in their back yard which was separated by a fence from our own. We often awoke to find chip bags and other litter thrown over our side of the fence. ...
We decided it was our time to move on and we began house shopping. This was in 2005. ...
Here is the point: I wonder if a significant amount of the real estate activity of that time was driven by people like us who were motivated to move to escape neighborhoods that had become less livable due to the influx of home buyers whose lifestyle choices would previously have not allowed them to buy a home at all. We would have moved eventually, but might well have stayed on a while longer.
I do not know if our neighbors were beneficiaries of CRA-type lending, but I will bet that many of the home buyers who received such loans made less than perfect neighbors, thus prompting flight from otherwise pleasant neighborhoods. This would then put still more upward pressure on prices.
I think of it as just another way our government is making our country a better place to live!
Who profits from rapid turnover in neighborhoods? Realtors, mortgage brokers, developers, etc. Who are most active in and concerned about local politics? Realtors, mortgage brokers, developers, etc.