Wednesday, June 01, 2005

The Housing Market and Blue State v Red State

The Office of Federal Housing Enterprise Oversight (OFHEO) this morning released a report about how US home prices continue to rise across the country. The report provided some statistics about which states saw the biggest increases and which states saw the smallest increases. Whenever I see lists of states, my pissed-off, looking-for-a-silver-lining liberal mind immediately cross-references the blue state/red state matrix.

The report states that,

"The biggest price increases in the HPI during the past year occurred in Nevada, with a 4-
quarter increase of 31.2 percent. With the latest annual data, California overtook

Hawaii to become the state with the second fastest growing house price appreciation."

[red state], [blue state], [blue state]

and then,

"The smallest increases occurred in Colorado, Ohio, Oklahoma, Indiana and Texas."

[red state], [red state], [red state], [red state], [red state]

And if you look at the full 50 state list, at the bottom you have Iowa and Michigan in 43 and 44 but then you have to go to #28, Minnesota before you find a blue state. At the top of the list you have DC (#4), MD (#6), and then RI, NJ, VT, DE, ME, NY, CT, OR, and WA in places 9-17. NH breaks the streak at #18, but then you've got PA and MA at #19 and #20.

In the top 26, 17/26 are blue states and in the bottom 25, 21/25 are red states.

I used this map for reference.

I heard a quote a month or two ago that "real estate" is the new "sex", and that no one talks about sex at aprties anymore - only real estate. It also seems that you can't watch 30 minutes of consecutive news on TV (local, network, or cable) and not hear something about the "housing bubble".

See? No one wants to live in a red state. Even the number one state on the list, which granted is a red state, is nothing but a big desert that happens to have a place called Sin City in it. And we all know that red staters HATE sex and greed.

random reader: "But wait Bob. YOU live in a red state!"

me: "Ugh. Don't remind me. But I live in a very blue county: Arlington County: 2/3 for Kerry. And last year the assesment on my condo went up 27%, which would put me ahead of CA and over the past 5 years, it has gone up 217% which crushes everyone."

[No bloggers were injured in the production of this first-ever original analysis.]
It's true! Went to two parties over the holiday weekend and a golf outing - fundraiser last Wednesday. Talked about real estate at all three.

Two points:
1. Median incomes are higher in blue states, which has an effect on housing prices. People want to live in certain metro areas (like Washington) because the high-paying, high-status jobs are there. Lots of people moving from red to blue are like me, not especially high earners, can't figure out how to buy in a neighborhood they like in a blue area.
2. New Hampshire ended up being a blue state in 2004, so you really have an unbroken streak through # 20.

I think Michigan is so cheap because of Detroit. Houses there are worth less than they were in 1950, because the population is fleeing. There are about 12,000 abandoned houses in Detroit, waiting to be torn down. You can seriously buy one for a few thousand dollars, which depresses the statewide totals.
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