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Yesterday we were surprised to learn that new housing sales for May rose 4.6 percent [PDF] -- but median sales prices fell.

The Wall Street Journal notes that there are big shifts underway that make big trophy houses a lot less attractive than they were even a few years ago. One shift is that baby boomers who built the big houses are quickly becoming empty-nesters. Their kids are growing up and moving away and they don't need the big houses anymore, if they ever did.

In addition, the softening real estate market comes into play. The Journal says:

The golden age of McMansions may be coming to an end. These oversized homes -- characterized by sprawling layouts on small lots, and built in cookie-cutter style by big developers -- fueled much of the housing boom. But thanks to rising energy and mortgage costs, shrinking families and a growing number of retirement-age baby boomers set on downsizing, there are signs of an emerging glut.

Interviews with dozens of real-estate agents, sellers, developers and housing economists turn up signs across the country. In an affluent Dallas ZIP code, where half the houses have four bedrooms or more, home sales fell 31 percent in the first quarter compared with the previous quarter. But sales rose 23 percent in a nearby ZIP code where 7 percent of houses have that many bedrooms. In Santa Fe, N.M., homes in the 2,000-square-foot range sell within weeks, while larger ones languish for months, says broker Pat French. In the Boston metro area, sales of homes with four or more bedrooms were flat in the first quarter from a year earlier; sales of homes with three bedrooms or fewer rose 14 percent. New Jersey appraiser Jeffrey Otteau says the inventory level statewide for large, $1 million-plus houses stands at 13 months, more than twice the state's overall average of six months.

There is no formal definition of what constitutes a McMansion. (Some would say it's any home bigger and showier than your own.) One broadly accepted definition, used for this article, is a house larger than 5,000 square feet -- about double the national average -- with four or more bedrooms that is built cheek by jowl with similar houses.

The story includes this passage:

The 2003 American Housing Survey, the latest available, found nearly 3.2 million homes in this country with 4,000 square feet of space or more -- the largest category the group tracks -- up 11 percent since the previous survey in 2001. Part of the big-house mania was fueled by speculation as home prices surged, says housing economist and consultant Thomas Lawler in Vienna, Va. "Folks bought megasized houses well beyond their needs to increase their investment in real estate," he says.

Now, some boomers in their late 50s are counting on selling their huge houses to help fund retirement. Yet a number of factors are weighing down demand. With the rise in home heating and cooling costs, McMansions are increasingly expensive to maintain. Nationwide, electricity rates have risen 12 percent over the past three years, while the price of natural gas for heating has risen 43 percent in the same period, according to the U.S. Energy Information Administration. That means it can cost $5,000 a year or more to heat and cool a 5,000-square-foot house in a city such as Farmington, Conn., according to Connecticut Light & Power Co.

The overall slump in the housing market also is crimping big-home sales. The volume of newly built homes sold fell 11.2 percent in the first four months of the year from a year ago, while sales of existing houses fell 5.7 percent, says the National Association of Home Builders and the National Association of Realtors. Yesterday, one of the biggest home builders, KB Home, cut its earnings outlook for the year, citing declining demand. Bruce Karatz, chairman and chief executive, said demand has fallen "largely due to a sharp reduction of speculative purchases and an oversupply in new and resale inventory."

Meantime, the jump in interest rates has put the cost of a big house out of more people's reach. With 30-year mortgages at 6.2 percent yesterday, a $700,000 loan costs about $4,300 a month, up from $3,900 when rates were 5.28 percent in June 2003, according to Bankrate.com. "The young people coming up don't have the means to absorb these big houses," says Mr. Otteau, the New Jersey appraiser.

The Rise of the MicroHome

The Wall Street Journal also produced a neat story on the small but growing demand for tiny microhomes:

Designers say microhome buyers tend to fall into one of two groups: The majority are looking for a secondary space, either a vacation home or a building near or attached to a primary residence. A minority of buyers are hoping to move into a minihouse full-time, motivated by a desire to simplify their lifestyles or by social and environmental concerns about the amount of living space people need.

While the market for tiny houses is still tiny itself, architects say they have seen interest from buyers jump significantly in the past five years. In 2002, Greg Johnson, an information-technology consultant in Iowa City, co-founded the Small House Society, a group that champions extra-small homes. He says he initially sent his newsletter to seven people; today he has about 260 individuals and architectural firms on the list.

The Copper Thieves

The stories just keep coming about copper thefts. Al's Morning Meeting reader Chris Baxter of The Morning Call (Allentown, Pa.) writes:

Water pipes, utility wires, floral vases and rain gutters -- all made of copper -- are being turned into cash at scrap yards by thieves profiting off the metal's record market prices.

Copper thefts are occurring almost daily in the Lehigh Valley, and around the nation, since the metal approached $4 per pound in May, more than quadruple its price three years ago. While scrap yards are supposed to decline stolen goods, police say, there's no one regulating what they buy and who they buy it from on a daily basis, providing a ready market for the metal. And the high prices and thefts are beginning to take a toll on consumers, as contractors and public utilities pass along the unexpected costs.

"It's not just consumers, it's not just homeowners, it's not just businesses. Everyone's suffering," said Bob Brinker, manager of Allentown Plumbing, who sits on the city plumbing board. "I've heard from all the different owners of different businesses, plus the people they work with, and they all say the same thing: it's hurting."

In Reading on Tuesday, a man was electrocuted while attempting to cut down insulated copper utility wire. Thieves in Hanover Township, Lehigh County, stole 10 floral vases, made of 87 percent copper and worth $350 each, two weeks ago from Cedar Hill Memorial Park gravesites. On June 5, three buildings in Allentown were stripped of hundreds of feet of copper water piping. And Acme Cryogenics, which makes gas and liquid handling equipment in Allentown, reported an $80,000 loss in early May after thieves stole copper pipes and valves.

Thieves are cashing in the metal for $2 to $2.35 per pound as scrap. Current home water piping, for example, fetches about $2 per pound at an area scrap yard. At the metal's peak, scrap yards such as E. Schneider & Sons Inc. in Allentown paid $2.80 per pound for the best grade of scrap copper, often found in utility wiring.

Copper has long been considered the premier metal for making everything from wiring to money. As demand has increased, especially because of the development boom in China, prices for copper and other nonferrous metals, or those metals not containing iron, have skyrocketed.

Though rates are still high, copper's trading price is down 23 percent from its May 11 peak. But around the country, thefts have continued. Water officials in Tucson, Ariz., report that the utility's facilities have been broken into six times in the past year, with thieves taking $85,000 to $100,000 in metal, mostly copper. Residents in Bangor, Maine, recently experienced power shortages when thieves struck four substations and took thousands of dollars of copper wiring. And in Fort Lauderdale, Fla., cemeteries reported more than 200 bronze vases stolen during the first two weeks of May.

Is the "Boy Crisis" Hype?

A study released yesterday by the think tank EducationSector says the so-called achievement gap between boys and girls is hype. The study reports:

In fact, with a few exceptions, American boys are scoring higher and achieving more than they ever have before. But girls have just improved their performance on some meas­ures even faster. As a result, girls have narrowed or even closed some academic gaps that previously favored boys, while other long-standing gaps that favored girls have widened, leading to the belief that boys are falling behind.

There's no doubt that some groups of boys -- particularly Hispanic and black boys and boys from low-income homes -- are in real trouble. But the predominant issues for them are race and class, not gender.

Rush to Ethanol Reshaping Rural Towns

The New York Times reports:

Despite continuing doubts about whether the fuel provides a genuine energy saving, at least 39 new ethanol plants are expected to be completed over the next 9 to 12 months, projects that will push the United States past Brazil as the world's largest ethanol producer.

The new plants will add 1.4 billion gallons a year, a 30 percent increase over current production of 4.6 billion gallons, according to Dan Basse, president of [AgResource Co.], an economic forecasting firm in Chicago. By 2008, analysts predict, ethanol output could reach 8 billion gallons a year.

For all its allure, though, there are hidden risks to the boom. Even as struggling local communities herald the expansion of this ethanol-industrial complex and politicians promote its use as a way to decrease America's energy dependence on foreign oil, the ethanol phenomenon is creating some unexpected jitters in crucial corners of farm country.

A few agricultural economists and food industry executives are quietly worrying that ethanol, at its current pace of development, could strain food supplies, raise costs for the livestock industry and force the use of marginal farmland in the search for ever more acres to plant corn.

"This is a bit like a gold rush," warned Warren R. Staley, the chief executive of Cargill, the multinational agricultural company based in Minnesota. "There are unintended consequences of this euphoria to expand ethanol production at this pace that people are not considering."

Canceling Troubles

Did you see the CNBC story about an America Online customer's attempt to cancel his account? It took more than five minutes of back-and-forth with an annoying AOL rep. 

The frustrated customer recorded the conversation and posted it online. You can listen to the entire conversation here. This story is resonating with lots of people who have waited forever to talk to somebody only to go through all this hassle.

We are always looking for your great ideas. Send Al a few sentences and hot links.

Editor's Note: Al's Morning Meeting is a compendium of ideas, edited story excerpts and other materials from a variety of Web sites, as well as original concepts and analysis. When the information comes directly from another source, it will be attributed and a link will be provided whenever possible. The column is fact-checked, but depends upon the accuracy and integrity of the original sources cited. Errors and inaccuracies found will be corrected.