Change in Real Home Prices Since 2000

http://harvard-cga.maps.arcgis.com/apps/MapSeries/index.html?appid=0e9603b62db14611834fd3dfd8645316

by wjossey • 9 years ago

69 74 9 years ago

harvard-cga.maps.arcgis.com

wjossey• 9 years 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?

lotsofpulp3• 9 years 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• 9 years 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.)

JackFr• 9 years 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• 9 years 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• 9 years 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• 9 years 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.

lotsofpulp3• 9 years 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.

mistermann8• 9 years ago

How many new multimillionaires does China produce each year?

api3• 9 years ago

I'd love to see some real data on just how much Chinese and other flight capital being dumped into RE is contributing to these price increases.

rm999• 9 years 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-dis...

This seems to reflect the "graying" of rural America: 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• 9 years ago

I was just thinking how well this correlates with the presidential election map.

ucaetano4• 9 years 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/2164734...

api3• 9 years 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• 9 years ago

Taxes can be a counterpoint to this. So, you want low value unless you're going to sell soon.

coolspot• 9 years ago

Good places are expensive to live because competition is high. Whole world population could not fit into Malibu ocean view mansions.

ucaetano4• 9 years ago

You don't need to live in a Malibu mansion with a view to the ocean, you just need to live within reasonable distance of your routine locations.

And competition is high because supply is constrained by NIMBY zoning regulations. It's an artificial constraint.

rsync2• 9 years 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."

I am not sure that is the case.

Certainly the growing inequality between the falling middle class and the increasingly rare upwardly mobile class could very well be due to the factors you cite.

But the biggest inequality (both globally and locally) is between people who have literally nothing - as in, zero dollars - and people who have (anything more than zero). Even if you live at the poverty level and have no assets you are still infinitely better off than someone with nothing.

That inequality gap is not due to zoning laws or illegal sublets or OMI evictions or whatever.

ucaetano4• 9 years ago

That's exactly the case I talked about, growing inequality, driven by higher returns on capital, is drive actually by higher returns on housing, due to NIMBY laws.

bluthru• 9 years ago

Housing doesn't have to be expensive. It is, mostly, due to political reasons.

And it's made even more expensive because of interest on mortgages--which isn't real money to begin with. That's right, the banks charge you interest on money they created out of thin air.

geogra4• 9 years 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• 9 years 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• 9 years ago

Doesn't Buffalo benefit by being right across from Toronto?

lazerpants• 9 years ago

UPMC is the largest employer in Pittsburgh. There's a ton of healthcare work there that pays pretty well.

Zigurd• 9 years ago

Buffalo, Pittsburgh, Providence, and others have started from a low baseline. Many are still very affordable.

temp-dude-878442• 9 years 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• 9 years ago

Columbus is weird, it's growing rapidly but I think there's a big stock of previously abandoned buildings.

scruple• 9 years 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• 9 years 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• 9 years ago

That's literally how we got internment camps, and how some citizens view brown skinned fellow residents/citizens of our land, just FYI.

analyst742• 9 years 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.

mistermann8• 9 years ago

China will have substantial control of Canada within a few decades with no violence required.

TACIXAT• 9 years 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.

babesh2• 9 years ago

You are a bigot.

CountSessine• 9 years 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.

loeber• 9 years ago

German-Americans were, for a long time, the largest national-ethnic group in the US. After the World Wars, calling oneself a German-American went out of fashion.

There are some interesting articles on the matter:

[1] https://www.nytimes.com/2015/09/23/opinion/whatever-happened...

[2] https://www.economist.com/news/united-states/21642222-americ...

dragonwriter• 9 years ago

There are lots of people of Chinese ancestry in the US, sure, but there is no reason to believe any substantial number of them have any devotion to the present government of the People's Republic of China.

Quite a lot of them are from families that have been American much longer than the PRC has existed.

sctb• 9 years ago

We detached this subthread from https://news.ycombinator.com/item?id=14720162 and marked it off-topic.

abootstrapper• 9 years ago

Right!? And imagine if Ireland went to war with the US! /s

babesh2• 9 years ago

Overlay the Presidential election results.

JBReefer• 9 years 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://...

Jemaclus• 9 years ago

Relevant XKCD: https://xkcd.com/1138/

It's interesting how many things generally correlate with urban/rural population distribution, too...

jorblumesea• 9 years 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.

jordache2• 9 years 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• 9 years ago

I dunno if they've changed it since you looked but scroll is zoom for me (Firefox 52 on Debian).

jordache2• 9 years 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

Change in Real Home Prices Since 2000

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