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Jewish World Review Sept. 19, 2005 / 15 Elul, 5765 Real Estate Moms By Michael Barone
http://www.JewishWorldReview.com |
Last weekend I, like so many of my neighbors, went into the house two doors down from me and looked around. It was the first weekend the property was on the market, and we were curious about how much the sellers were asking—and whether they'd get it. I won't tell you the number, but it was higher than what similar houses had gone for in the neighborhood just last year, and much higher than any of us would have imagined five years ago. Many readers will have had similar experiences. I started thinking . . . what might this mean politically?
In the 1990s, we in the political commentariat talked a lot about Soccer Moms, the group targeted so successfully by Bill Clinton in 1996—women who wanted their children protected and nurtured, who favored Mr. Clinton's education and V-chip and family-leave programs. And in the past few years we've talked a lot about Security Moms, who seem to have voted for George W. Bush in 2004—women who want their families protected against terrorists. I now have another group we should talk about, and probably should have been talking about all along—Real Estate Moms, women who have seen their families' net worth climb thanks to rising home prices.
Most Americans accumulate significant, six-figure wealth in the course of their lifetimes. During the late 1990s stock market boom, most household wealth was in financial instruments, but today and before the late 1990s the majority of household wealth was in residential real estate. And in politics the key economic issue for voters may be changing, from concern about short-term income to concern about the long-term, lifelong project of accumulating wealth.
Not everybody is a Real Estate Mom. Housing values are far higher in the big metropolitan areas on the East and West coasts than they are in the Midwestern heartland and the Deep South. Higher generally in the blue (Democratic) states than the red (Republican) states. You could argue that the blue states are blue because of Real Estate Moms. In the early 1990s, real estate values plummeted and the coast suburbs that had voted for Republicans in the 1980s switched to Bill Clinton and Ross Perot. George H. W. Bush's percentage declined most in 1988-92 in areas where real estate values plummeted most, New Hampshire and southern California. Bill Clinton held these votes for himself in 1996 and Al Gore in 2000 as real estate values rose again. As growth sagged after 2000, real estate values kept rising, and consumers kept spending as they refinanced their mortgages and tapped their increased equity.
What will happen politically if, as some expect, the housing market is a bubble and bursts? One possibility is that George W. Bush's Republicans will suffer. But they've never really regained the Real Estate Mom votes their party won in the 1980s. Another possibility: The tax issue will reemerge. Democrats in 2008, like John Kerry in 2004, will probably call for repeal of tax cuts on "the rich." Real Estate Moms didn't mind when they were busy refinancing. But if there's no equity to tap, they might want that tax-cut money as they did in the 1980s.
Stay tuned.
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JWR contributor Michael Barone is a columnist at U.S. News & World Report. Comment by clicking here.
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