Sunday, August 09, 2009
One of the problems with the maps I've been generating is that when one looks at income one has to take into account cost of living. Unfortunately I'm only finding state-level maps, not county-level ones. I'm sure there're out there, but the US Census has a lot of data files handy if you are persistent and know where to look, so I'm going to poke around and do my own calculations. The Census has home values for 2005-2007, the peak bubble years, as well as median household income for the early 2000s. Naturally one expects the housing value and income to track each other. That is, areas with higher median incomes should probably have higher median home values. But, some areas will have lower incomes vis-a-vis the value of the housing stock, and others higher. Below is a scatterplot which shows median home value vs. median household income (log-transformed). The outlier is New York county, Manhattan.
Since Manhattan is such an outlier I dropped it out of the data set, and did what I did previously, I calculated the deviation from the trendline of each point, above and below. Those counties above the trendline exhibited greater housing values in relation to median income, while those below were the inverse. The map below is shaded blue for those above the trendline, and red for those below. Shading is proportional to deviation from the trendline.
Things that jump out at me:
1) 2-4 years ago the Washington D.C. area seemed to have relatively affordable housing stock in relation to median income.
2) The West coast did not. Urban areas such as New York or Boston exhibited a decoupling between income and home values, but much of their hinterland remained relatively affordable. The same does not apply to the West.
3) The "resort counties" in the Intermontane West are not a surprise.
4) Interestingly, unlike the Northeast the South seems to be characterized by large metropolitan areas such as Atlana, Houston and Dallas remaining affordable, while the hinterlands are not nearly as underpriced as one might expect. I think the issue here is simply very low income in the rural South, so that any upward pressure on home values is not matched by increased wages.
Bottom 10 below trendline
Loudoun, Virginia -$136661.4
Fort Bend, Texas -$116864.8
Goochland, Virginia -$116020.9
Prince William, Virginia -$115841.1
Stafford, Virginia -$109999.9
Calvert, Maryland -$109217.2
Campbell, Wyoming -$109136.2
Powhatan, Virginia -$106159.3
Howard, Maryland -$105386.7
King George, Virginia -$100267.0
Top 10 above trendline
Summit, Colorado $128227.5
Blaine, Idaho $129168.4
Santa Barbara, California $134643.1
Eagle, Colorado $171239.4
Teton, Wyoming $181064.5
Santa Clara, California $190223.8
Santa Cruz, California $195552.2
San Francisco, California $206232.6
San Mateo, California $218667.7
Marin, California $255949.7
If I put New York county back into the data, it is $822057.7 above the trendline.