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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

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.

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.