of the street, conscious of decent lives within them, gazed at one another with brown imperturbable faces.

The story thus opens with a description of a dull, claustrophobic setting. Describing North Richmond Street as "blind" means it is a dead end, a cul-de-sac, but, of course, the primary meaning of "blind" is lacking sight or lacking insight. The word "blind" is repeated twice, indicating we should pay attention to it. It is then followed by the seemingly contradictory notion of the houses which "gazed" at one another. One imagines they gaze without really seeing.

Although we don't know this from the distanced tone of the first paragraph, the story is told in first-person narration. This, therefore, is the boy's perception of the street he lives on. He describes it, however, at first as if it has nothing to do with him, as if he is not part of it but viewing it from afar. This shows how much he wants to distance himself from this environment of blindness and imprisonment (suggested by the phrase "set the boys free.")

The irony, of course, is that the boy himself is blinded by his romantic and enchanted imaginings. Like the houses, he too gazes without really seeing. His current reality can't live up to the expectations of his imagination, as he grasps in an epiphany at the end of the story. The story ends, as it begin, with his recognition of the dullness of his reality.

The opening paragraph of "Araby" perfectly establishes the humdrum little world that the boy protagonist inhabits. North Richmond Street, where the boy lives, is described as "blind," that is to say a cul-de-sac. But we also sense that Joyce is referring to another kind of blindness in his description of this respectable but bland part of town. The street is closed off from the wider world, both geographically and culturally. This is a place where nothing much ever happens except for when school's out for the day.

It's small wonder, then, that the boy should feel the need to escape from such a drab little world, that he craves the kind of excitement that the Araby bazaar promises to give. The boy, like the pupils of the Christian Brothers' school on North Richmond Street, wants to be set free. He wants to leave behind him the stifling, constricting world in which he's forced to live out his formative years.

The opening paragraph describes the street that the narrator lives on. North Richmond Street is "blind" indicating that in its isolated world, it (personified) can't see beyond its own confines. The houses themselves are personified, giving the town a sense of its own closed off existence: 

The other houses of the street, conscious of decent lives within them, gazed at one another with brown imperturbable faces. 

This initial setting of these houses with their brown, imperturbable (calm or unable to be excited) faces suggests a stagnant atmosphere. The narrator then remarks that he found books, owned by the former tenant of his own home, and his interest in literature suggests an interest in mental escape. The opening paragraph describes the setting from which he wants to escape or at least make his life there more significant. 

Despite this drab description of the initial scene, the narrator does describe a playful childhood there. But his play is structured around other potential discoveries or epiphanies. He would watch Mangan's door to catch a glimpse of his sister. The narrator, in his mental escape, imagines himself as a knight performing spiritual and romantic quests for Mangan's sister. This is also why he goes to Araby to buy her something. Even in the most mundane chores, the narrator imagines he is on some quest: 

These noises converged in a single sensation of life for me: I imagined that I bore my chalice safely through a throng of foes. Her name sprang to my lips at moments in strange prayers and praises which I myself did not understand. 

James Joyce's "Araby" depicts a solemn, stale atmosphere.  The street where the narrator and his friends play is a blind, or a dead end.  The houses are "brown," with "imperturbable faces," the gardens are "dripping," the bicycle pump is rusty.  An empty house is located at the end of the blind where a former priest had died. The air within is "musty." All these images present a stagnant, melancholy atmosphere. The children, though, play until their "bodies glowed," apparently oblivious to their somber environment.

However, with the description of Mangan's sister, the tone suddenly changes.  She is described as standing in the light, with her dress swinging, and her "rope of hair" tossing side to side.  The light and motion that define Mangan's sister set her apart from the dark, stagnant imagery of Dublin.

As long as the narrator is focused on Mangan's sister, the mood is optimistic.  His friend's sister becomes his idol, his reason for being, his escape from the drudgery of everyday existence.  However, when the narrator reaches Araby and finds out that his quest to purchase Mangan's sister a suitbable gift is futile, the mood becomes once again dark.  Just as the lights of the fair are turned off, so too darkens the narrator's optimism as he feels himself utterly foolish and full of "anguish and anger." With the disillusionment of his quest, the narrator's despair enables him to see Dublin as it is presented to us:  a dead end.