Let the electrons commute: New homes go beyond the suburbs

By Kenneth V. Smith

In the United States, the expansion of the railroads a century ago and the building of the interstate highway system in the 1950s each caused real estate booms. And in the next century, the Internet and other online communications may be remembered more for causing real estate growth than for anything else.

The way we live and work has common threads throughout the world. As the Internet spreads, more and more people will work from their remote homes. As the Internet takes root in Europe, for example, the American experiment with tele-commuting is being tried.

The hottest construction and real estate markets will be in the American West and the South, beyond the current borders of urban and suburban areas in new satellite communities. Pre-wired, high tech houses with his and her offices will become larger and more expensive. Because of the Internet and similar technologies, the biggest demographic trend in the next quarter century will be the homebuyer demands to move even further beyond the suburbs.

Urban areas will become less important for employment because it will be easier to work at home. Just as the railroads and interstate highways let America take advantage of its physical size, so will the information superhighway make the country's size an advantage once again. And all of this will lead to tremendous growth for the real estate, construction and lending industries.

It may seem to be a stretch to say that the information age will be equal to or greater than the growth of railroads for impact on real estate development, but author Michael Moynihan makes a compelling argument in a new book. In The Coming American Renaissance, the conventional gloom and doom economic scenarios of both liberals and conservatives are demolished with a forecast that the United States is poised for a major economic recovery.

The fuel for this world dominating economic growth will be vast amounts of undeveloped land coupled with electronic communications such as the Internet. "America's size will promote far more sophisticated on-line services, even better networks, more warehouse stores, and a wireless revolution," Moynihan writes.

Major technological advances are frequently the direct cause of rapid increases in real estate values, and those who can see the changes as they are happening are in prime position to profit. The subtitle of Moynihan's book is "How to Benefit from America's Economic Resurgence."

The book provides practical advice and solid information not only for real estate investors, but also for corporate executives, anyone looking for a job, and homebuyers. With an in-depth analysis of proprietary data from Urban Decisions Systems, Moynihan documents demographic trends showing which areas of the country and which industries will grow over the next 25 years.

Moynihan is a senior policy advisor in the U. S. Department of the Treasury. He formerly was a consultant to the World Bank, and he has advised governmental and corporate clients throughout the world about technology and market trends.

Throughout his book, Moynihan compares the expansion of the railroads with the development of the information age and how these advances cause land rushes, building bonanzas and investment opportunities. "The railroad boom - a real estate boom, more than anything else - drove frenzied activity on Wall Street and a wholesale revolution in commerce as companies arose to supply a national market," he writes.

No other advanced, industrialized country has as much land for development as the United States, which, in many ways, remains a developing country. One third of the country is still owned by the federal government (one half, west of the Mississippi), and much private land is "unimproved." America has the capacity to undergo undreamed of levels of development to an extent impossible in Japan or even Europe. The fastest growing states are now Nevada, Idaho and Alaska.

"New housing will continue to grow more expensive to build and buy in proportion to everything else," Moynihan writes. "This means that housing will be a good investment over the long haul, although short-term changes can always bring on a bust. It also means that developers will continue to get rich."

The book is published by Simon & Schuster. $23. (save 30% from Barnes and Noble)