A few weeks back, I was attending a panel discussion about real estate trends during a conference of the National Association of Real Estate Editors in Philadelphia.
Now, though I write exclusively about residential real estate, I learned early on that you can't ignore commercial trends because apartments and retail, office and industrial development play a critical role in the economics of buying and selling a house.
A speaker on the panel, Jonathan Miller, editor of the Urban Land Institute's Emerging Trends in Real Estate, was talking about the present fortunes of retail.
It should come as no surprise that the United States has more retail per capita than any other country. All I need do is drive about 11/2 miles from my house, where another shopping mall has bloomed in the last year or so.
Thanks to what Miller calls "the consumer wave," retail construction has reached unprecedented heights since the late 1990s, when many prophets were predicting that shoppers would abandon "bricks and sticks" for the Internet.
Although, as Miller acknowledges, "Internet shopping is catching on more and more," it hasn't replaced getting in the car and driving to the mall, or hopping on the El or the High-Speed Line and traveling to Center City.
In the months after Sept. 11, 2001, some experts suggested that consumers, fearful of additional terrorist attacks, would respond by staying away from public places, especially malls. Yet one of the major reactions to 9/11 - turning billions of dollars of equity into purchases of goods to turn homes into "cocoons" - was enough to keep retail stores filled.
Although Ted Jones, chief economist for Stewart Information Services, acknowledged that he "worried about terrorism" and predicted that "we are going to have so many of these events that our children and grandchildren will get kind of used to it," this is not what concerns the experts about where retail is going.
What worries economists is the possibility of a recession. Inflationary pressures created by rising energy prices have, according to Jones, resulted in just "two things costing less than they did last year: flat-screen televisions and houses in Florida and California."
Because it is so consumer-driven, if there is a recession, "retail will be vulnerable," Miller said.
After almost a decade of "spend, spend, spend," Americans are admitting they are uncomfortable with the total amount of household debt they have accumulated.
A survey by LendingTree of 1,499 consumers found that more than half don't have a financial plan, which means they don't know how they'll manage the debt they've accumulated, let alone pay it off.
Not including mortgage debt, 74 percent of those surveyed believe they will be debt-free sometime in their lives.
"This is great news," said LendingTree's Bridget Smith, "but based on what we learned from survey respondents, we're unsure how many will stop being slaves to debt payments and make changes to their lifestyles."
Half of those surveyed say they are concerned about their credit-card debt, and 10 percent chose to declare bankruptcy as the only way to solve their problems. Remember, it isn't as easy to file for bankruptcy as it used to be, so perhaps a financial plan would be in order.
What's really scary is that the most indebted, and thus the most vulnerable to even a slight change in the current economic picture, are young families ages 19 to 34.
Their debt-to-income ratio is the highest (59 percent spend more than half their total gross income on total debt expense). Most are uncomfortable with that debt and are the least prepared should an emergency occur.
From what I've seen of the rest of the survey, which is available at www.lendingtree.com/debtsurvey, age doesn't necessarily bring wisdom, although it is fairly obvious that how parents accumulate and deal with debt influences how their children handle it.
That's a problem.
"On the House" appears Sundays in The Inquirer. Contact Alan J. Heavens at 215-854-2472 or email@example.com.