This quarter, as we assess the slow progress the economy is making to rebuild itself, we wanted to look at what's happened to a couple of specific sectors and industries. With the exception of health care, it seems that one topic has been in the news in recent months: home values and home price appreciation, or the lack thereof. The value—or perceived value—of homes and the concept of home ownership itself have changed during the past 80 years or so. For our podcast, we talked to Karl Case who, with Robert Shiller and Alen Weiss, designed the respected S&P/Case-Shiller Home Price Index, which tracks changes in the value of the residential real estate market in 20 U.S. metropolitan areas. Case discussed home values and how perceptions and expectations have changed. (You can hear our podcast with Case on our Web site, frbatlanta.org.)
As staff writer Ed English researched home value issues for our cover story, he noted, "As a baby boomer, I have many friends and contemporaries who were much more open to taking on a large mortgage than their Depression-era parents were. While my generation isn't big on delayed gratification, it also witnessed a period in which home buyers were almost universally rewarded for 'going big.' It will be interesting to see if the next generation sees a large mortgage as a risk or a reward."
Perhaps a more sanguine segment of the economy, sports tend to play a big role in the culture of the South, particularly this time of year. Staff writer Charles Davidson says that what struck him as he talked to sports experts was that despite the economic blows to the industry, such as fewer corporate sponsors and—depending on the sport—dwindling numbers of spectators, sports still reign on television and in Southeastern stadiums, which are packed with 50,000, 80,000, or even 100,000 fans on game day. But Davidson says the other issue that reared its head as he looked at college sports was the apparent disconnect between high-level, high-revenue college sports and higher education. "As virtually every state in the Southeast is cutting spending on public universities, including laying off faculty and staff, some major college teams and conferences continue to pay huge salaries to coaches and garner multibillion-dollar television contracts."
The Southeast has been a mecca for tourists for a long time. When staff writer Lela Pratte went looking for a story that would focus on the lodging industry in the Southeast, she expected to center her story on the effects of consumer retrenchment. What she found, however, was the deep impact that significantly declining corporate travel has made on the lodging industry. According to the sources Pratte spoke with, larger hotels and resorts won't see a rebound in business travel for quite some time to come.
We hope you will find some new insights in this issue. Please let us know if you have comments or questions.