It has long been heralded as the candy-colored jewel in the chocolate crown of Brooklyn’s brownstone belt, but the new owners of Park Slope’s wackiest house have decided, with the blessing of the city, to return it to its natural shade. The building has become something of a local landmark since Bernie Henry, now 92 years old, bought the place in 1961. He repainted it the fetching pink hue as a gift to his wife. Well, they do say love is blind.

To commemorate the long reign of Brooklyn’s perkiest looking pad, Curbed took to the streets to see what the locals made of the disappearance of this love-it-or-hate-it home, and how they’ll cope without their pink palace.

Better act fast: brownstones in Brooklyn are being snatched up like hot cakes.

Christabel Gough, the secretary for the Society for the Architecture of the City and a resident of the Greenwich Village Historic District, has a simple, to the point message for New Yorkers: Beware. Manhattanization, she warns, is growing, encroaching on historical neighborhoods throughout the five boroughs. It is the real estate equivalent of kudzu and Brooklyn, Ms. Gough says, is the next victim. Yet unlike it’s leafy cousin, Manhattanization cannot be eradicated with sheep.

But first, a word on Manhattanization, as explained by Ms. Gough in her keynote speech, “Can Cobble Hill Avoid Manhattanization” at the Cobble Hill Association General Meeting on May 29th, and helpfully reprinted at Brownstoner.

“How do you Manhattanize an old town house? First, you pay a seven or eight figure price to buy it. Then you destroy it—except, of course, for the street front, if it is in an historic district. You gut it. Your toss any Federal or Greek Revival woodwork into the convenient garbage scow outside the front door. You cut in new windows. You tear out the lower back wall. You change the floor levels. You remove some floors altogether to create double height rooms. That, your architect triumphantly explains, reduces your Floor Area Ratio! You expand the back with a rear yard addition; you expand the top with a rooftop addition; you expand underneath with new underground levels, which may include a swimming pool, a dog-grooming-room and other such essentials. If the swimming pool is of Olympic dimensions, you may ask to excavate the entire rear yard as well, turning the existing garden into a roof terrace. Your landscape architect and his arborist will testify that this will have no impact on the neighbors, because the roof of an Olympic-style swimming pool can be incredibly verdant and beautiful, when planted with trees with shallow root systems, such as crab apples! Or bamboo, perhaps. And your engineer will explain that of course there is no danger; excavation will be painstakingly monitored and the shoring will be state of the art!”

Ms. Gough is not the only Manhattanite concerned about this growing penchant for historical facelifts. “Many buyers re-entering the real estate market after years on the sidelines are discovering what they’re after in brownstone Brooklyn,” The New York Times’ Marc Santora recently wrote. The article, entitled “Brooklyn’s Gold Rush,” lists Brooklyn’s Fort Greene, Park Slope, Boerum Hill, and Red Hook as the most endangered neighborhoods. 

“Brownstones signify stability,” Jill Seligson Braver, an associate broker at Brown Harris Stevens, told the Times. “Putting roots down in a neighborhood for the long haul.”

But they also signify space.

“The current frenzy in the brownstone market is more a reflection of the continuing demand for large spaces,” Mr. Santora writes, and developers are increasingly snatching up two- and three-family homes and converting them into larger single-family residences.

As a result, the median sales prices of Brooklyn homes, once a much-welcome alternative to their pricier counterparts across the East River, have increased considerably. In Park Slope, median sales prices have jumped from $1.2 million to $1.45 million in the last year (a roughly 20 percent increase); in Boerum Hill, they’re up from $1.1 million to $1.7 million (a 60 percent increase); and in Red Hook, from $475,000 to $825,000 (a 73 percent increase).

Not since On the Waterfront has Red Hook been so popular.

jschiewe@observer.com

Black=existing historic district, Green=expanded historic district, Brown=new, proposed historic district

Though many thought it was not possible, Park Slope is becoming even more perfect. (And no, the ice cream trucks have not agreed to vacate Prospect Park.)

Today, the Landmarks Preservation Commission approved a sizable expansion of the Park Slope historic district, making it one of the largest historic districts in the city, according to a release from City Councilmember Brad Lander.

The extension will include some 580 buildings and will stretch from roughly 7th Street to 15th Street, mostly between 7th Avenue and 8th Avenues. The brownstone bedecked South Slope blocks also include the former Ansonia Clock Works factory and the factory workers' homes.

“These are some of the most beautiful streets in New York and, with today’s vote, we know they will be enjoyed by generations to come," Mr.  Lander said of the decision.

You would think that the first expansion of the historic district in more than 38 years may have been hailed as victory and celebrated with a pint of local microbrew or a cup of single pour coffee. But no. In Park Slope the drum of desire never ceases to beat—one can always seek a more intense yoga class, a fresher farm-to-table experience, a bigger historic district.

Wasting not a moment to bask in the glory of its most recent victory, the Park Slope Civil Council has announced that it plans to advocate for a much larger historic district that would include hundreds of additional buildings above 5th Avenue in North Slope.

"The historical and architectural integrity of Park Slope, its sense of place, remains an ongoing concern of the neighborhood," the otherwise celebratory announcement warned gloomily, perhaps seeing the grim ghost of Christmas Future in the retail chains and bank branches of the Upper West Side.

Hoping to avoid such a fate, the Civic Council announced that it had already requested that the Landmarks Preservation Committee initiate formal action to extend the historic district in the North Slope "whose buildings constitute the earliest development of the neighborhood."

In fact, the Civic Council won't rest until all of Park Slope is landmarked. "The Park Slope Civic Council is laying the groundwork to have all of Park Slope eventually considered," according to their website.

kvelsey@observer.com

Well, as the poet says, "there's a first time for everything," and thanks to J. Crew creative director Jenna Lyons, we can now notch the above phenomenon off our list.

In the midst of a public divorce, and what is reported to be a burgeoning relationship with fashion executive Courtney Crangi, the 43 year-old Ms. Lyons has chosen Stribling to list the 7 bed, 3.5 bath, 4,400 square foot brownstone in Park Slope that she owns with her estranged husband, artist Vincent Mazeau. According to Curbed, Ms. Lyons and Mr. Mazeau bought the home in 2004 for $1.3 million and are looking to double their money, asking for $3.75 million now.

Judging from the stunning photos on the listing, they just might get it. Ms. Lyons sense of style is apparent throughout the brownstone's four stories and the attention to detail is very clear (see: claw-footed tub in the bedroom, an antler-laden dining room and what appears to be a "shoe room").

While there's no word on whether Ms. Lyons intends to stay in the neighborhood (we're out of the gossip loop at Ginger's Bar), we look forward to seeing what she'll do to the next house upon which she gets her hands.

tmcenery@observer.com

Leornard Lopate

Leonard Lopate loves his Cobble Hill home. In a recent interview with the Post the radio host gushed about life in Brooklyn, where he moved in 2009 after spending 25 years in Chinatown. Currently a renter, Mr. Lopate claims that he would love to make his rented apartment a permanent home with his girlfriend Melanie Baker. One problem—the increasingly expensive Brooklyn hood may be out of his price range.

"We’re thinking of buying something, but unfortunately this neighborhood is incredibly expensive and may be beyond our means,” he told the tab.

Living on the third-floor of an 1840s townhouse, Mr. Lopate expounded upon peaceful the sounds of Cobble Hill. "There is that sound that sounds like the ocean," he said. It's not the ocean, in fact, but rather the BQE  two blocks away, the traffic passing in fits and starts, attuned to the tides of rush hour.

The Observer found one way for Mr. Lopate to fund his wildest Cobble Hill dreams. Apparently his apartment is filled with original works of art from friend and frequent interview subject Chuck Close, as well as pieces from Art Spiegelman. A portrait of Lopate by artist Peter Max also graces the apartment's walls. With the art market out performing the real estate one, this might just be the opening Mr. Lopate needs.

eknutsen@observer.com

Then again, we are also fans of having equity, so here goes nothin'...

The 6 bed, 3.5 bath brownstone sits on one of the neighborhood's most desirable blocks and the place looks newly, and tastefully, renovated. So the $10,000 a month (that's $120,000 a year) it would cost to take up occupancy in this exquisite home seems entirely reasonable.

But wouldn't it be tortuous not to own it?

While paying so much a month for the privilege?

Let's do some math...

The current owners paid all of $2.3 million in 2006, putting their "monthly nut" in the potential $10K ballpark and, for this kind of money you could make yourself the proud owner of almost any one of the 250 or so Brooklyn brownstones in the sub-$2.5 million range.

So, do you really want to help pay down someone else's mortgage while spending down your own savings/capital?

Especially when you could be using that money on your own little piece of Outer Borough Heaven?

Then again, maybe you're a visiting European hedge fund manager with a few kids and a hankering for the offerings at BAM...

Again, we know our snark is weak with this one, but if you've got the money to spend and an interest in an extended Fort Greene stay, we can only be jealous of your means and mindset.

As he glided down the street, Mr. Perez's older brother Francisco followed behind him in a burgundy Volkswagen. When the Spyder neared the end of the block, it stopped in front of one of the immaculate brownstones, and Francisco double-parked a few feet behind him to block traffic. Mr. Perez hopped off his bike with a heavy Sephora bag, 2,000 glassines of heroin inside, each stamped with the Sin City brand, the same name that was emblazoned on the back of his helmet. "He was proud of his work," Special Narcotics Prosecutor Bridget Brennan told The Observer last week.

Mr. Perez handed the package into a parked car, and back came $9,000 from an undercover cop. The transaction took less than a minute, all while artists, attorneys, nannies, maybe even some of Mr. Perez's clients were beginning to gather a block away at P.S. 321 to pick up the kids from school.

On the morning of April 23, Edwin Perez walked out of the simple home on 19th Street he had converted into a redbrick castle, complete with gargoyles scrambling across the facade. He had the keys to his storage unit in his pocket, possibly headed for another run, but before he got to the sidewalk, three police cars rushed up and cornered Mr. Perez. Inside the storage facility, the Spyder was found with 1,400 heroin glassines inside.

For the past two years, the NYPD and the DEA have been tracking the Perez brothers and an accomplice as they made dozens of deals, 29 of which involved law enforcement officials. They are part of a larger sting that has, since January, netted a loose network of 20 Windsor Terrace dealers moving heroin and a healthy amount of cocaine in some of the chichier quarters of Brooklyn.

How long, how much and to whom the Perez gang has been dealing in Park Slope is unclear. Law enforcement and brownstone dwellers have differing views and contrary opinions. The dominant response to those questions is the Park Shrug. Nobody much noticed the drugs before, nor have they since the busts, even though it made the cover of The Brooklyn Paper. And there the story, with a picture of Perez on his Spyder, was below the fold, trumped by a memoriam to City Council aide Hope Reichbach, a story about kittens saved from a hoarder and "Baby Store's 'Lesbian' Discount Provokes Ire." A drug bust won't sell even free newspapers these days.

A dozen or so blocks away in Windsor Terrace, where working-class clapboard row houses dominate, the reactions to the arrests were about the same as they had always been. Perez and the other alleged dealers lived on these same blocks, many for their entire lives, and it is here that most of the dealings of the 20 people arrested occurred, the Perez crew excepted.

Three guys from two separate crews lived on a particularly hot block of 17th Street, and one of them fancied himself a rapper, RNR. Videos of his can be found on YouTube, featuring all the standard gangster rap tropes--drugs, cars, women, the frequent invocation of the Notorious B.I.G., along with the occasional rhyme about the Slope. "Lessons You Must Learn" takes place in front of the bodega on the corner of 8th Avenue. "Light a guy up for wearing a wire/just got back from all of my priors," he declares on the quiet street.

Inside this weekend, a clerk said he knew nothing about the drugs, but suggested we ask folks on 17th Street about it. When asked for a name, even just a first name, he replied, "Why would I do that? I make money off these people." (Most people interviewed for this story offered psuedonyms or no names at all, and they have been changed accordingly.)

At least one patron inside knew something about it. A gentleman who lived right in between the rapper and his accomplice complained, "Drugs have been an open secret on 17th Street for a long time, and I still don't know if they've done enough about it," he said. "The Bloomberg administration-with all their cuts-is it going to get worse?" Minutes before, The Observer noticed an idyllic Brooklyn scene, the man walking his daughter and her friend back from soccer. Another couple and their kids would soon arrive for what looked like a dinner party. He was at the bodega for a can of cocktail nuts.

Ms. Brennan, whose office is handling the prosecution, told The Observer that there was some evidence the drugs were being distributed to the rougher periphery of the Slope, but not its co-op-frequenting core, and that Perez could be feeding dealers across the city. The plan was to use the unsuspecting Slope for cover-to hide in plain sight behind the Bugaboos and bumper-stickered Beemers.

Wherever it is headed, heroin flows into the city have doubled each year for the past three years, according to the Special Narcotics Prosecutor's office, and the Park Slope approach is one Ms. Brennan is seeing more of. In the fall, a heroin mill was busted inside a pricey duplex on West 43rd Street--the workers were posing as Manhattan College students--and another mill in Riverdale was recently broken up. The same day the Perez arrests were announced, a mill in suburban Fort Lee had been raided. The workers were bussed in by minivan each day from Washington Heights, where the heat had apparently gotten too high to safely operate.

Joseph Corozzo Jr., Edwin's attorney and the son of a reputed mafioso, believes that if his client was dealing drugs, it was for locals alone. "It's not a distribution point at all," he countered. "This is low-level sale to the consumer. This is not a crack gang with guns and violence. I think it's just glamorous for Park Slope. To me, it's a small case. I'm not saying its insignificant, but this happens all the time, and they don't make a big deal out of it."

Meanwhile a DEA official pointed The Observer to an annual study conducted by the University of Michigan that shows heroin use on the rise among teens and 20-somethings, owing in part to the gateway drugs that are oxycodone and percocet. "You could buy one pill or five dime baggies for the same price," a law enforcement official said.

Sarah and Tina, a couple who have lived in a walk-up at the corner of 17th Street and 9th Avenue for 12 years, were eating lunch on Saturday at Elora's, a Latin restaurant across the street. They said they never thought the area would change as quickly as it did, the had simply come for the space Windsor Terrace afforded. Tina accuses a fair number of her neighbors of being involved with drugs still, and as they saunter by, she points at various buildings through the open window of the restaurant. Sarah keeps insisting she has no way of knowing that for sure.

Peter, who opened Elora's 16 years ago, warned us about what we wrote. "I know these guys along time, I watch them grow up, so it's hard," he said. "Don't get me in trouble, and don't get you in trouble." Not the sort of warning one expects to hear in Windsor Terrace these days.

Tina blames City Hall as much as the South Americans who now produce much of the heroin flooding into the city. "Unfortunately, the police have really gotten slashed," she said. "It's a manpower issue, and it falls on the mayor. There should be a millionaires tax. They should be charging all the developers for all the buildings they put up around here. There's a lot of things they could be assessing them for."

Maybe the city could legalize drugs and start taxing those, too. But would that jeopardize the livelihood of those in Windsor Terrace? "They're lazy, and they don't want to find a real job," Ms. Brennan said. The bartender at Elora's suggested that most of the guys chose to go into this line of work. She said one of them had money from his dad, who works in construction.

That did not mean being a dealer made any more sense. It was not exactly gainful employment, or a nice service sector job, at least in the eyes of one resident, a husky guy in a Yankees cap and and baggie jersey. "When you add it all up, the lawyers fees and the time in jail, right down to the suit you have to buy to go to court, because you will get caught, it's no better than minimum wage," he said. And perhaps he is right. But a job at McDonald's, or even Elora's, will not buy a Can-Am Spyder.

Some people say the block 17th Street between Prospect Park West and 8th Avenue remains hot, even after the arrests. When The Observer tried one of the dealer's houses, where two women sat on the stoop, the older woman with scraggly grey hair replied, "He's not home," and made a zipping motion along her lips.

Across the street, three doors down from where RNR shot another one of his videos outside his own home, we rang the door bell at a nice redbrick Italianate place. Three ADP stickers were stuck to the first-floor window and a vulture statuette perched over the door. A women in her 20's with daisies on her nails answered. "I'm not saying anything," she told The Observer. "We have these urban people who move here in a daze and they just act so surprised, and so superior," she said. Urban people? "Yeah, the new people, the yuppies."

Park Slope may simply be oblivious to the dark reality just beyond its freshly swept stoops. "That's a big shock to me, and it's funny, because there's a police lieutenant that lives on the block," said Joe. Joe's house is on 7th Street, one of the shifting brownstone walls, along with Carroll, Union, 2nd and 10th streets, of Mr. Perez's "office."

Joe is a savvy guy, too. He used to live over on 10th Street in the 1980s, when it was the wrong side of the 7th Avenue station. "Every morning, there used to be a pile of auto glass somewhere on the block, at least one," he recalled. Still, the community has maybe gotten a little too comfortable with its apparent safety. "Today, a lot of people here came from somewhere else, and all they know is new Brooklyn," Mr. Bloomberg said. "They don't have the same antenna."

Paula, who lives in a stunning Queen Anne-style home on Carroll Street with her young Brooklyn brood falls safely into this new crowd. Only a few years out of Manhattan, she had not heard about the heroin ring, but she was not surprised by its existence, either. "The recession is definitely making more crime here and there," she said, after scolding one of her tykes for opening the door to this stranger with his pen and pad. ("Hold on, we have to teach a lesson," she said, before politely shutting the door on The Observer for a good 30 seconds of tsk-tsking.) Among the other crimes visited on this tree-lined stretch: a few construction sites were broken into, the wheels off a Lexus had been boosted, and, in that most serious of Slope capers, a deliveryman from Blue Ribbon Sushi was mugged. The block has since been crossed off the delivery route.

Around the corner at the Tea Lounge, Slopers were getting their socially acceptable fix. Outside, a middle-aged threesome was chatting. Aimee believed the heroin was very much intended for her neighbors. "People associate drugs with certain communities, with ghettos, but they forget that doctors use drugs and lawyers use drugs, and they go about it in a more slick way," she said. "Just because people are buying cappuccinos and shoes and strollers doesn't mean there aren't drugs going on. There may be more drugs, and it's not investigated, and that's the real crime."

Kasia was chain smoking Camels as her dog sat quietly at her galoshed feet. The Flatbush-born, Upper East Side-residing Columbia student preferred crack and other uppers, though now she was largely clean. Still, she knew those who preferred the mellowing embrace of Heroin. "I have a friend who's pretty high-functioning, in terms of work and paying the rent and all that, and she pretty frequently shoots up," Kasia said. "But sometimes she shoots crack, too, so I don't know what that says about her. She's actually doing better than I am."

A man who calls himself the Sticker Dude-it was embroidered on his jean shirt-and who has lived in Park Slope for 20 years, had just finished performing "If You're Happy and You Know It" for a passing family on his banjo. He was not thrilled with The Observer's line of questioning, but he did offer an unusual explanation. "I think there's a compound in Park Slope that's maybe five times bigger than in any other neighborhood. In that compound, there are elements, bad elements, and they keep indoors like they are being watched. And perhaps some day the helicopters will come into that compound and take everyone away, and they will be replaced with a new set of people and the neighborhood will keep changing."

His parting words to The Observer were that we "stop fishing for some nonsense story."

Outside of the 78th Precinct just across Flatbush Avenue in Prospect Heights-which covers everything from the avenue south to the Prospect Expressway-officers were getting in from patrolling the mean streets of the Slope and the Terrace. The Observer collared one officer to ask him about the heroin ring.

"I hate to break it to you, bro, but this shit is everywhere, it's world wide, and it's not new," he said. "Since the first guy started chewing on cocoa leaves, this has been going on. It doesn't matter if it's Paris Hilton snorting coke, probably snorting God knows what, or the bum on the street stealing $20 to get his fix. It's not as bad as the 80's, but it's bad. Some people say that meth now is as bad as crack then. And heroin's there, too, sure, same as ever. And coke. And pot. Everything." His disbelief grew as he rattled off the facts, shocked by our apparent ignorance.

"Google it, bro. You'll see."

SLIDESHOW: Brooklyn Blogger's Brownstone

They had six months to complete the “soup-to-nuts” renovation—from facade work to furniture placement—but Fitzhugh Karol and Lyndsay Caleo of the Brooklyn Home Company were up to the challenge. Their clients, concert producer Matt Winslow and his wife, Courtney, had found the ultimate Greek revival townhouse on Park Slope’s historic Lincoln Place but had yet to make the move east with son Cash, now two and a half. “They were still living in California during the renovation,” says Caleo, “so they had to trust us a lot.” Even from a distance, though, the clients were involved in the project. “Courtney had a great vision. Often times clients say, ‘We have no idea what we want to do,’ but in this case it really was a collaboration,” Karol recalls. That cross-country collaboration resulted in a richly colorful and dynamic 21st-century take on the 3,500-square-foot 19th-century brownstone—with contemporary floor-plan adjustments, custom Sapele woodwork and a sprinkling of Santa Monica style. The Winslows “had that California vibe,” explains Karol. “We wanted to go with that.” Thanks to Matt Winslow’s musical background, the Winslows had “all kinds of prints and music-related photography. We had a lot of things to work with that we knew were mainstays,” including the architectural details of the townhouse, many shared by its neighbors in the historic Park Slope district. “The house is full of amazing original details,” wrote Caleo in an email, “and we wanted to emphasize all the beauty of those details but update them. I became obsessed with painting the foyer, hallways and kitchen, which are all heavy with this amazing cake molding in a rich, gorgeous off-black. It added a lot of drama and modernized the space while still keeping it classic.” After highlighting the brownstone’s historic architecture, the design duo paid tribute to their clients’ individuality as a young, stylish family. “We took [an] antique chandelier in the kitchen and dunked it in red rubber,” says Caleo. “We had some offbeat ideas but they were great with letting us really go for it.” From roof cornice to stoop, the house is a testament to the family-run Brooklyn Home Company’s core mission—to create rooms with a sense of “escape.” Using eco-friendly materials, nontraditional treatments and pieces with a handmade component, Karol and Caleo and their team of local Brooklyn artists and builders work to create spaces where, says Karol, “you feel you can exhale when you walk in.” Perfect for a Brooklyn home in which you can—almost—catch the Santa Monica breezes blowing through. Courtney Winslow may have best summed up her new home in the blog that she has started since moving to Brooklyn. Its name? “Fabulous in Park Slope.”

SLIDESHOW: Brooklyn Blogger's Brownstone

All photo credits: Emily Gilbert/Emily Gilbert Photography

For "Brownstone Brooklyn," which encompasses the northwest neighborhoods (Boerum Hill, Brooklyn Heights, Carroll Gardens, Clinton Hill, Cobble Hill, Fort Greene, Park Slope, Prospect Heights and others), high-end brownstones (single-family residences) dominated demand. The median price of those buildings rose to $2.25 million, a 77.2 percent increase from last quarter's $1.27 million and a 181.3 percent increase from the same time in 2009. The average sales price of all types of brownstones was $1,393,216, down 1.2 percent from last quarter's $1,410,818, but up 26.6 percent from last year.

Even if this seems like a boom, it isn't. We're simply working our way back to how things used to be in the most chi-chi of chi-chi Brooklyn.

"This is clearly good news and we'll take it, but the story is it's really getting back to a—and I hate using the word 'normal'—but more of a level of activity that's consistent with historic patterns," Mr. Miller said. "Sort of pre-Lehman."

Two more notes of caution: First, the stock of brownstones is small and fixed. People don't build brownstones, just buy and sell them. So if the percent changes seem big, that's just because we don't have a whole lot to work with. The total number of brownstone sales this quarter was just 84, which is up 21.7 percent from last quarter's 69, and up 95.3 percent from the 43 sold in the second quarter last year.

Next, the higher price at the top-end mostly just reflects an increase in the size of units sold, a caveat that's reminiscent of Manhattan's second-quarter trend. Mr. Miller gave us some numbers that don't appear in the report: The average square footage of units sold this quarter was 3,016. Last year it was 2,698. That's an increase of 11.8 percent. The price per square foot, a truer indicator of demand, has been more or less flat: This quarter it was $462, not that much higher than last year's $408.

But don't let that get you down! The share of brownstones in the total Brooklyn sales market was 4.4 percent, whereas last year it was around 3 percent. That percentage seems small, but before 2009 it hovered around 2 percent, Mr. Miller said. Our economic woes aren't over, but buyers are definitely loving brownstones.

"The increase we saw in this quarter was the release of pent-up demand," Mr. Miller said.

So what's in store for the future? As always, that's hard to say. Things got especially complicated this quarter because of the federal tax credit incentive program: Buyers got tax breaks of $6,500 if they went to contract by April 30. That meant some buyers were "poached from the future," to use Mr. Miller's phrase, and the first quarter of 2010 saw an artificial spike in activity. The median sales prices for two- and three-family brownstones went down this quarter—two-family was $950,000, down from first quarter's $1.27 million, and three-family was $1.10 million, down from $1.4875 million—but relative to last year, those prices barely changed at all. Two-family homes last year were $965,000, while three-family homes were $1.0995 million.

Mr. Miller said the tax credit helped, but it's not a long-term solution. What will really pull housing out of the current rut is the job market. Once employment ticks up, so will housing. "You're seeing an artificial depression of activity after seeing this artificial stimulus," Mr. Miller said of the second quarter figures. "After this period is over, will activity return? That's the trillion-dollar question. I don't think so. It's been artificially high and artificially low. So we'll probably end up in the middle."

The bar, he said, has been lowered.

"The word 'recovery,' I was taught, meant getting better. In the current environment, the current use of it means not getting worse."

walden@observer.com