8 ms·

Change in Real Home Prices Since 2000

69 points by wjossey 9y ago

wjossey 9y ago
The differences between the middle of the country and the east & west coast, since 2000, is startling. I'd love to see this sort of graphic normalized against wage inflation as well. Is what we're seeing just fairly flat wage stagnation in the midwest, but wage inflation on the coasts (leading to a rise in housing prices)? If we start to see salary multiples of 3x, 4x, or 5x, if you just live on a coastline, what will that end up doing to interstate trade and commerce? Will the middle of the country begin to lose some of their buying power, purely because their inflation rates are lower?
- lotsofpulp 9y ago
  I bet it's a combination of things. West coast cities are more desirable for younger people, there's better weather, a more socially liberal climate, more employers and other young people to interact with, and the networking opportunities. Plus overseas investors looking to put their cash in safe haven, but I would ascribe most of it to it just being a more desirable place to live.
  - zzbzq 9y ago
    According to all the generation-war articles, young people don't have any money, so in that view the places desirable to young people would be declining in value. I have a feeling the truth might be simple. Normal home values are mostly stagnant or down (due to the 2000s bubble), no further explanation needed. Regions that are exceptionally down are just actually in decline economically. Regions that have risen slightly are economically rising. Regions that are exceptionally up are a combination of economic success and intentional real estate manipulation for financial motives (for example, property owners purposefully obstructing the development of new homes, which is a common accusation in bay area threads on this very site.)
    - lotsofpulp 9y ago
      Not necessarily. Young people might not have enough money (or income security) to afford a down payment and mortgage, but they do have enough money to split rent for an apartment/condominium/house with 1 or more other people. And the folks migrating to the desirable cities are probably more resourceful than the ones who are not, but their extra earnings are captured by landlords, who can then use the higher rents to justify higher property prices. Edit: I wonder if it's possible the quantify the role income security, or lack thereof, plays in home prices.
- JackFr 9y ago
  A more relevant metric is net new household formation. The rust belt and southern metro areas you see the decline since 2000 are fighting a losing demographic battle.
notadoc 9y ago
In many west coast locations, house prices are far beyond the prior housing bubble peaks, I often come across places that are 75% to 100% more than they were during the mid-2000s bubble. Pick any popular western location, city, or neighborhood, and you'll find prices 300% and 500% higher than they were in 2000 and often double or more what they were in the first housing boom. And no, incomes have not increased that much. Many of these areas have price-to-income ratios into the absurd of 10x-15x. Outside of San Francisco, does anyone really think that is sustainable?
- treehau5 9y ago
  In the former case, the inflation was due to sketchy MBS's. In the latter case, price inflation in major city center's suburbs are causing the cost of building materials to go sky (lumber I believe is up 16% in the past 6 months), thus making a house that was once 100$ a square foot to build now 135$ a square foot.
- Kenji 9y ago
  That's what happens when your government dumps money into banks, which dump it into mortgages, to increase spending in a struggling market. It's like drinking alcohol to ease the suffering caused by a mental health problem. You just make everything worse.
  - lotsofpulp 9y ago
    Not a problem for those who already have assets and can ride the wave. Well, I guess not a problem as long as they have the cash flow to keep it going, or at least 1 non-leveraged home.
    - mrec 9y ago
      Mark Blyth is fond of observing that "The Hamptons are not a defensible position". Here in the UK we're finally seeing signs that the political worm is starting to turn. Partly a realization, growing for a while, that permanently excluding everyone who doesn't already own a home from any kind of financial security is maaaybe not the most far-sighted electoral strategy. Partly the shock of the recent General Election where the young actually voted for once. (I don't think they voted for anything helpful, in this context, but the mere act of voting means that their problems are suddenly being taken seriously in a way they weren't before.)
rm999 9y ago
Fill in the gaps with blue, and you have something very similar to the population density map of the USA: https://mwlibertyfest.files.wordpress.com/2009/06/us-pop-dist.gif https://mwlibertyfest.files.wordpress.com/2009/06/us-pop-dis... This seems to reflect the "graying" of rural America: https://www.theatlantic.com/business/archive/2016/06/the-graying-of-rural-america/485159 https://www.theatlantic.com/business/archive/2016/06/the-gra.... Younger generations are moving to denser areas, driving property values up. This isn't a bad thing per se (denser populations are more environmentally friendly), but is probably driving some of the division in the USA today.
- yessql 9y ago
  I was just thinking how well this correlates with the presidential election map.
ucaetano 9y ago
Oh, looking at this it is worth remembering that NIMBYism and real estate prices are one of the biggest drivers of inequality in the world. Housing doesn't have to be expensive. It is, mostly, due to political reasons. https://www.economist.com/news/finance-and-economics/21647349-rising-house-prices-may-be-chiefly-responsible-rising-inequality-through https://www.economist.com/news/finance-and-economics/2164734...
- api 9y ago
  "Real estate cannot simultaneously be affordable and a good investment." As soon as someone becomes a homeowner, it becomes in his/her best interests to make sure others cannot become homeowners at anything but a higher price. It's one of the most extreme perverse incentives in modern economies.
  - Retric 9y ago
    Taxes can be a counterpoint to this. So, you want low value unless you're going to sell soon.
    - davidw 9y ago
      Unless you live somewhere like California (Prop 13) or Oregon (Measures 5 & 50) where taxes don't track home price increases.
    - raldi 9y ago
      To provide a little more detail on davidw's comment: In several US states, your property tax is locked in when you buy a house. So you could have two identical houses next door to each other, one last sold in 1975, the other 2015, and their property taxes would likely differ by a factor of at least 30x.
      - mikeyouse 9y ago
        To Raldi's point.. Two random houses near Pacific Heights: https://i.imgur.com/kltiDm4.png?1 https://i.imgur.com/kltiDm4.png?1 But at least people with $10 million houses are spared the indignity of paying for local services.
geogra4 9y ago
Man, buffalo and pittsburgh must be doing something special compared to the rest of the rust belt? I wonder what's going on there.
- aphextron 9y ago
  Pittsburgh has a thriving tech and financial sector, driven by CMU and PNC respectively. Buffalo has never quite been part of the "rust belt", they're more east coast. They have lot of stable government employment because of New York state.
  - protomyth 9y ago
    Doesn't Buffalo benefit by being right across from Toronto?
    - temp-dude-87844 9y ago
      Surprisingly, no. Though the Buffalo areas' ports of entry draw about as much cross-border traffic as Detroit (but not including Port Huron-Sarnia also in Michigan), Toronto's proximity to Buffalo is not often felt. A few trade and investment groups have been working in the last 15 years to attract Canadian companies to Buffalo with good success, but largely Canada's influence grows towards Michigan and approaching Chicago, and it's the US' influence that grows along the Niagara border into Canada's Greater Toronto area.
  - lazerpants 9y ago
    UPMC is the largest employer in Pittsburgh. There's a ton of healthcare work there that pays pretty well.
- Zigurd 9y ago
  Buffalo, Pittsburgh, Providence, and others have started from a low baseline. Many are still very affordable.
temp-dude-87844 9y ago
There are a few that surprise me here -- declines for Indianapolis, Columbus -- these first two are really odd, but also Columbia, Augusta, and almost all of Alabama. I know none of these places have the draw of the coasts, but are solid metros that have seen some growth since the recession. Is it just that they're being outcompeted by larger regional neighbors, like Atlanta, Charlotte, and Charleston? Why is all of Indiana and Ohio so blue when the two state capitals and their suburbs have been recovering much better than that region's other cities?
- patmcguire 9y ago
  Columbus is weird, it's growing rapidly but I think there's a big stock of previously abandoned buildings.
- scruple 9y ago
  > Why is all of Indiana and Ohio so blue when the two state capitals and their suburbs have been recovering much better than that region's other cities? I'd love to have an answer to this question, too. I grew up in rural central Ohio. There is still some industry hanging on, but just barely. All that I can hazard to speculate now is that it will be very interesting to see what happens to those areas when the coming trucking-industry revolution hits.
charred_toast 9y ago
This is going to sound paranoid, obviously, but I was thinking if China ever wanted to start a war with North America, it has quite a sizable population in the US and Canada that could potentially contribute to that aim.
- hkmurakami 9y ago
  That's literally how we got internment camps, and how some citizens view brown skinned fellow residents/citizens of our land, just FYI.
- analyst74 9y ago
  On the other hand, a sizable of the elite class in China would really not want to start a war between two countries they are heavily invested in.
- mistermann 9y ago
  China will have substantial control of Canada within a few decades with no violence required.
- TACIXAT 9y ago
  Most people living in the US or Canada view it as their home. I don't think many would act as sleeper agents for a country that they left behind.
- babesh 9y ago
  You are a bigot.
- CountSessine 9y ago
  Much of middle-America (and Canada) was settled by huge numbers of German immigrants. At the start of WW1, there were similar concerns about German sympathies. It just doesn't work that way. These people have made their homes here and count themselves as Canadians and Americans. They might have sympathies for the old country (much as many of us in North America do), but the stronger these sympathies are, the less likely we'll go to war in the first place.
babesh 9y ago
Overlay the Presidential election results.
- JBReefer 9y ago
  Totally agree. Also, compare with this map of heroin deaths per capita [0]. They're shockingly close. https://img.washingtonpost.com/wp-apps/imrs.php?src=https://img.washingtonpost.com/blogs/wonkblog/files/2016/12/opiate_maps-021.png&w=1484 https://img.washingtonpost.com/wp-apps/imrs.php?src=https://...
- Jemaclus 9y ago
  Relevant XKCD: https://xkcd.com/1138/ https://xkcd.com/1138/ It's interesting how many things generally correlate with urban/rural population distribution, too...
deleted 9y ago
[deleted]
jorblumesea 9y ago
Everyone here is talking about bubble, overpricing, inflations etc. But the long term demographic shift is coastal growth at the expense of the rest of the country. The West coast especially has a booming economy and is growing at a very rapid pace. I think most of the price increase is just a supply/demand issue. Lots of people moving to coastal areas and American cities are terrible are high density housing and planning.
jordache 9y ago
Why does arcGIS have the non conforming UI where scroll of the mouse wheel moves the map vertically instead of being the zoom?
- bumblebeard 9y ago
  I dunno if they've changed it since you looked but scroll is zoom for me (Firefox 52 on Debian).
  - jordache 9y ago
    today on latest chrome on OS X... scroll pans the map up and down. Shift+scroll pans the map left and right. the most convoluted web app in the world

69 points by wjossey 9y ago

The differences between the middle of the country and the east & west coast, since 2000, is startling. I'd love to see this sort of graphic normalized against wage inflation as well. Is what we're seeing just fairly flat wage stagnation in the midwest, but wage inflation on the coasts (leading to a rise in housing prices)? If we start to see salary multiples of 3x, 4x, or 5x, if you just live on a coastline, what will that end up doing to interstate trade and commerce? Will the middle of the country begin to lose some of their buying power, purely because their inflation rates are lower?

lotsofpulp 9y ago
I bet it's a combination of things. West coast cities are more desirable for younger people, there's better weather, a more socially liberal climate, more employers and other young people to interact with, and the networking opportunities. Plus overseas investors looking to put their cash in safe haven, but I would ascribe most of it to it just being a more desirable place to live.
- zzbzq 9y ago
  According to all the generation-war articles, young people don't have any money, so in that view the places desirable to young people would be declining in value. I have a feeling the truth might be simple. Normal home values are mostly stagnant or down (due to the 2000s bubble), no further explanation needed. Regions that are exceptionally down are just actually in decline economically. Regions that have risen slightly are economically rising. Regions that are exceptionally up are a combination of economic success and intentional real estate manipulation for financial motives (for example, property owners purposefully obstructing the development of new homes, which is a common accusation in bay area threads on this very site.)
  - lotsofpulp 9y ago
    Not necessarily. Young people might not have enough money (or income security) to afford a down payment and mortgage, but they do have enough money to split rent for an apartment/condominium/house with 1 or more other people. And the folks migrating to the desirable cities are probably more resourceful than the ones who are not, but their extra earnings are captured by landlords, who can then use the higher rents to justify higher property prices. Edit: I wonder if it's possible the quantify the role income security, or lack thereof, plays in home prices.
JackFr 9y ago
A more relevant metric is net new household formation. The rust belt and southern metro areas you see the decline since 2000 are fighting a losing demographic battle.

notadoc 9y ago

In many west coast locations, house prices are far beyond the prior housing bubble peaks, I often come across places that are 75% to 100% more than they were during the mid-2000s bubble. Pick any popular western location, city, or neighborhood, and you'll find prices 300% and 500% higher than they were in 2000 and often double or more what they were in the first housing boom. And no, incomes have not increased that much. Many of these areas have price-to-income ratios into the absurd of 10x-15x. Outside of San Francisco, does anyone really think that is sustainable?

treehau5 9y ago
In the former case, the inflation was due to sketchy MBS's. In the latter case, price inflation in major city center's suburbs are causing the cost of building materials to go sky (lumber I believe is up 16% in the past 6 months), thus making a house that was once 100$ a square foot to build now 135$ a square foot.
Kenji 9y ago
That's what happens when your government dumps money into banks, which dump it into mortgages, to increase spending in a struggling market. It's like drinking alcohol to ease the suffering caused by a mental health problem. You just make everything worse.
- lotsofpulp 9y ago
  Not a problem for those who already have assets and can ride the wave. Well, I guess not a problem as long as they have the cash flow to keep it going, or at least 1 non-leveraged home.
  - mrec 9y ago
    Mark Blyth is fond of observing that "The Hamptons are not a defensible position". Here in the UK we're finally seeing signs that the political worm is starting to turn. Partly a realization, growing for a while, that permanently excluding everyone who doesn't already own a home from any kind of financial security is maaaybe not the most far-sighted electoral strategy. Partly the shock of the recent General Election where the young actually voted for once. (I don't think they voted for anything helpful, in this context, but the mere act of voting means that their problems are suddenly being taken seriously in a way they weren't before.)

rm999 9y ago

Fill in the gaps with blue, and you have something very similar to the population density map of the USA: https://mwlibertyfest.files.wordpress.com/2009/06/us-pop-dist.gif https://mwlibertyfest.files.wordpress.com/2009/06/us-pop-dis... This seems to reflect the "graying" of rural America: https://www.theatlantic.com/business/archive/2016/06/the-graying-of-rural-america/485159 https://www.theatlantic.com/business/archive/2016/06/the-gra.... Younger generations are moving to denser areas, driving property values up. This isn't a bad thing per se (denser populations are more environmentally friendly), but is probably driving some of the division in the USA today.

yessql 9y ago
I was just thinking how well this correlates with the presidential election map.

ucaetano 9y ago

Oh, looking at this it is worth remembering that NIMBYism and real estate prices are one of the biggest drivers of inequality in the world. Housing doesn't have to be expensive. It is, mostly, due to political reasons. https://www.economist.com/news/finance-and-economics/21647349-rising-house-prices-may-be-chiefly-responsible-rising-inequality-through https://www.economist.com/news/finance-and-economics/2164734...

api 9y ago
"Real estate cannot simultaneously be affordable and a good investment." As soon as someone becomes a homeowner, it becomes in his/her best interests to make sure others cannot become homeowners at anything but a higher price. It's one of the most extreme perverse incentives in modern economies.
- Retric 9y ago
  Taxes can be a counterpoint to this. So, you want low value unless you're going to sell soon.
  - davidw 9y ago
    Unless you live somewhere like California (Prop 13) or Oregon (Measures 5 & 50) where taxes don't track home price increases.
  - raldi 9y ago
    To provide a little more detail on davidw's comment: In several US states, your property tax is locked in when you buy a house. So you could have two identical houses next door to each other, one last sold in 1975, the other 2015, and their property taxes would likely differ by a factor of at least 30x.
    - mikeyouse 9y ago
      To Raldi's point.. Two random houses near Pacific Heights: https://i.imgur.com/kltiDm4.png?1 https://i.imgur.com/kltiDm4.png?1 But at least people with $10 million houses are spared the indignity of paying for local services.

geogra4 9y ago

Man, buffalo and pittsburgh must be doing something special compared to the rest of the rust belt? I wonder what's going on there.

aphextron 9y ago
Pittsburgh has a thriving tech and financial sector, driven by CMU and PNC respectively. Buffalo has never quite been part of the "rust belt", they're more east coast. They have lot of stable government employment because of New York state.
- protomyth 9y ago
  Doesn't Buffalo benefit by being right across from Toronto?
  - temp-dude-87844 9y ago
    Surprisingly, no. Though the Buffalo areas' ports of entry draw about as much cross-border traffic as Detroit (but not including Port Huron-Sarnia also in Michigan), Toronto's proximity to Buffalo is not often felt. A few trade and investment groups have been working in the last 15 years to attract Canadian companies to Buffalo with good success, but largely Canada's influence grows towards Michigan and approaching Chicago, and it's the US' influence that grows along the Niagara border into Canada's Greater Toronto area.
- lazerpants 9y ago
  UPMC is the largest employer in Pittsburgh. There's a ton of healthcare work there that pays pretty well.
Zigurd 9y ago
Buffalo, Pittsburgh, Providence, and others have started from a low baseline. Many are still very affordable.

temp-dude-87844 9y ago

There are a few that surprise me here -- declines for Indianapolis, Columbus -- these first two are really odd, but also Columbia, Augusta, and almost all of Alabama. I know none of these places have the draw of the coasts, but are solid metros that have seen some growth since the recession. Is it just that they're being outcompeted by larger regional neighbors, like Atlanta, Charlotte, and Charleston? Why is all of Indiana and Ohio so blue when the two state capitals and their suburbs have been recovering much better than that region's other cities?

patmcguire 9y ago
Columbus is weird, it's growing rapidly but I think there's a big stock of previously abandoned buildings.
scruple 9y ago
> Why is all of Indiana and Ohio so blue when the two state capitals and their suburbs have been recovering much better than that region's other cities? I'd love to have an answer to this question, too. I grew up in rural central Ohio. There is still some industry hanging on, but just barely. All that I can hazard to speculate now is that it will be very interesting to see what happens to those areas when the coming trucking-industry revolution hits.

charred_toast 9y ago

This is going to sound paranoid, obviously, but I was thinking if China ever wanted to start a war with North America, it has quite a sizable population in the US and Canada that could potentially contribute to that aim.

hkmurakami 9y ago
That's literally how we got internment camps, and how some citizens view brown skinned fellow residents/citizens of our land, just FYI.
analyst74 9y ago
On the other hand, a sizable of the elite class in China would really not want to start a war between two countries they are heavily invested in.
mistermann 9y ago
China will have substantial control of Canada within a few decades with no violence required.
TACIXAT 9y ago
Most people living in the US or Canada view it as their home. I don't think many would act as sleeper agents for a country that they left behind.
babesh 9y ago
You are a bigot.
CountSessine 9y ago
Much of middle-America (and Canada) was settled by huge numbers of German immigrants. At the start of WW1, there were similar concerns about German sympathies. It just doesn't work that way. These people have made their homes here and count themselves as Canadians and Americans. They might have sympathies for the old country (much as many of us in North America do), but the stronger these sympathies are, the less likely we'll go to war in the first place.

babesh 9y ago

Overlay the Presidential election results.

JBReefer 9y ago
Totally agree. Also, compare with this map of heroin deaths per capita [0]. They're shockingly close. https://img.washingtonpost.com/wp-apps/imrs.php?src=https://img.washingtonpost.com/blogs/wonkblog/files/2016/12/opiate_maps-021.png&w=1484 https://img.washingtonpost.com/wp-apps/imrs.php?src=https://...
Jemaclus 9y ago
Relevant XKCD: https://xkcd.com/1138/ https://xkcd.com/1138/ It's interesting how many things generally correlate with urban/rural population distribution, too...

deleted 9y ago

[deleted]

jorblumesea 9y ago

Everyone here is talking about bubble, overpricing, inflations etc. But the long term demographic shift is coastal growth at the expense of the rest of the country. The West coast especially has a booming economy and is growing at a very rapid pace. I think most of the price increase is just a supply/demand issue. Lots of people moving to coastal areas and American cities are terrible are high density housing and planning.

jordache 9y ago

Why does arcGIS have the non conforming UI where scroll of the mouse wheel moves the map vertically instead of being the zoom?

bumblebeard 9y ago
I dunno if they've changed it since you looked but scroll is zoom for me (Firefox 52 on Debian).
- jordache 9y ago
  today on latest chrome on OS X... scroll pans the map up and down. Shift+scroll pans the map left and right. the most convoluted web app in the world