Mapping Out US Home Prices

 

“US Housing Affordability Index. Years of median household income needed to buy median house. The US group Demographia says a market with a ratio of higher than five is severely unaffordable.”

Whenever I see a heat map like this, my very first instinct is to compare it with a population density map.  Nine times out of ten there is a near 1-to-1 correlation between the two maps, but in this case there is very little correlation:

My second impulse is always to compare the heat map with the most recent voting map. In this case, while there is a little more correlation (particularly in that “southwest sweep” between Arizona and Colorado), it’s still not anywhere close to a perfect correlation.

After perusing these maps for just a few minutes, I’m left with one big question…

WHAT THE HECK IS GOING ON IN TENNESSEE!??!

Published in Economics
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  1. Columbo Member
    Columbo
    @Columbo

     

     

     

    • #1
  2. Clavius Thatcher
    Clavius
    @Clavius

    Tennessee and Montana.  Why is Montana as expensive as Los Angeles?

    • #2
  3. Columbo Member
    Columbo
    @Columbo

    Clavius (View Comment):

    Tennessee and Montana. Why is Montana as expensive as Los Angeles?

    Freedom in wide open spaces is priceless!

    • #3
  4. Old Bathos Moderator
    Old Bathos
    @OldBathos

    Clavius (View Comment):

    Tennessee and Montana. Why is Montana as expensive as Los Angeles?

    Because the people selling LA homes are moving to Montana thus bidding up property values?

    • #4
  5. Mark Camp Member
    Mark Camp
    @MarkCamp

    I don’t know.  It makes me wonder if anyone on Ricochet has an app that generates these heat maps?

    Then we could, if we have the tabular data at hand, create a map of the correlations that are going on.

    • #5
  6. Misthiocracy has never Member
    Misthiocracy has never
    @Misthiocracy

    This map may help explain things a bit where the West is concerned.  Still doesn’t explain Tennessee tho’.

    • #6
  7. namlliT noD Member
    namlliT noD
    @DonTillman

    Old Bathos (View Comment):

    Clavius (View Comment):

    Tennessee and Montana. Why is Montana as expensive as Los Angeles?

    Because the people selling LA homes are moving to Montana thus bidding up property values?

    (Correct me if I’m wrong, but…)

    This isn’t just a map of home prices.  This is a map, for each county, of the home price WITH RESPECT TO the average income in that county.

    So it’s really a map of what fraction of people’s income they’re willing to spend on their home.  For whatever reasons.

    So in the red areas could be because the homes are expensive, or because the residents make less money, or both.

     

    • #7
  8. Al French Moderator
    Al French
    @AlFrench

    Misthiocracy has never (View Comment):

    This map may help explain things a bit where the West is concerned. Still doesn’t explain Tennessee tho’.

    I don’t think it helps much. Much of the land is unbuildable, undesirable and would support very few people.

    • #8
  9. Al French Moderator
    Al French
    @AlFrench

    In Oregon the main driver is very restrictive land use policies.

    • #9
  10. namlliT noD Member
    namlliT noD
    @DonTillman

    Al French (View Comment):

    Misthiocracy has never (View Comment):

    This map may help explain things a bit where the West is concerned. Still doesn’t explain Tennessee tho’.

    I don’t think it helps much. Much of the land is unbuildable, undesirable and would support very few people.

    Indeed.  Much of red area in the west… has no water.

    • #10
  11. Misthiocracy has never Member
    Misthiocracy has never
    @Misthiocracy

    Mark Camp (View Comment):

    I don’t know. It makes me wonder if anyone on Ricochet has an app that generates these heat maps?

    Then we could, if we have the tabular data at hand, create a map of the correlations that are going on.

    I’ve tried to figure out GIS mapping. It’s way harder than I expected, especially if you’re using free/open source software, of which there is surprisingly very little available. I’ve never really been about to get it to work.

    • #11
  12. Misthiocracy has never Member
    Misthiocracy has never
    @Misthiocracy

    Al French (View Comment):
    I don’t think it helps much. Much of the land is unbuildable, undesirable and would support very few people.

    That’s sort of my point. If there’s less land available on which to build homes, either because the land itself is unsuitable or else because the Federal Government maintains an iron grip on what can be built, that helps to limit supply thereby putting upward pressure on affordability.

    • #12
  13. Misthiocracy has never Member
    Misthiocracy has never
    @Misthiocracy

    namlliT noD (View Comment):
    Indeed.  Much of red area in the west… has no water.

    Again, that would presumably help contribute to affordability in those areas, since the property owner would have to cover more of the cost of infrastructure like water and electricity and whatnot.

    As such, I’m not too flabbergasted by affordability in the west.  It makes sense to me.

    But Tennessee? I really don’t get why Tennessee is such an outlier.

    • #13
  14. Kephalithos Member
    Kephalithos
    @Kephalithos

    Misthiocracy has never (View Comment):

    Mark Camp (View Comment):

    I don’t know. It makes me wonder if anyone on Ricochet has an app that generates these heat maps?

    Then we could, if we have the tabular data at hand, create a map of the correlations that are going on.

    I’ve tried to figure out GIS mapping. It’s way harder than I expected, especially if you’re using free/open source software, of which there is surprisingly very little available. I’ve never really been about to get it to work.

    I might be able to make something with QGIS (like I did for a Ricochet piece a few years ago). But I’d need to know what to make — and which data to use.

    • #14
  15. Phil Turmel Coolidge
    Phil Turmel
    @PhilTurmel

    Misthiocracy has never (View Comment):

    namlliT noD (View Comment):
    Indeed. Much of red area in the west… has no water.

    Again, that would presumably help contribute to affordability in those areas, since the property owner would have to cover more of the cost of infrastructure like water and electricity and whatnot.

    As such, I’m not too flabbergasted by affordability in the west. It makes sense to me.

    But Tennessee? I really don’t get why Tennessee is such an outlier.

    Lots of federal property (Army Corps of Engineers) in close proximity to very desirable features (navigable water, especially, plus protected parklands).

    If Georgia doesn’t abolish its state income tax before I start winding down, I’ll contribute to East Tennessee’s problem.

    • #15
  16. Kephalithos Member
    Kephalithos
    @Kephalithos

    Misthiocracy has never (View Comment):

    namlliT noD (View Comment):
    Indeed. Much of red area in the west… has no water.

    Again, that would presumably help contribute to affordability in those areas, since the property owner would have to cover more of the cost of infrastructure like water and electricity and whatnot.

    As such, I’m not too flabbergasted by affordability in the west. It makes sense to me.

    But Tennessee? I really don’t get why Tennessee is such an outlier.

    Well, if @dontillman is right, it might be because Tennessee has both a high demand for housing and a relatively low median income. When COVID hit, I recall reading a lot of pieces about the Tennessee boom — how people were flocking there, how U-Haul rentals were sold out, etc.

    Even if the flood of out-of-staters drives up home prices, Tennessee still might look cheap to them, since they’re used to paying out-of-state prices. But this screws the natives, of course, who aren’t used to paying California prices for Tennessee houses, and whose wages haven’t caught up. Plus, peruse the state a little on Google Maps, and you’ll see that much of the existing housing stock in these red counties consists of trailers and shoddy little ranches set amid pastureland and forest. If you’re an upper-middle-class person hoping to escape the coastal craziness, I can’t imagine it’s easy to find the sort of place you’re looking for.

    Am I right, or am I missing something?

    • #16
  17. DonG (CAGW is a Scam) Coolidge
    DonG (CAGW is a Scam)
    @DonG

    namlliT noD (View Comment):

    I don’t think it helps much. Much of the land is unbuildable, undesirable and would support very few people.

    Indeed.  Much of red area in the west… has no water.

    Las Vegas is “undesirable” yet millions of people live there.   Water can be moved, if there is political will to do it.  Housing supply is controlled by people who already own homes, so it is usually lacking where there is sufficient wealth to control the local politics.    NIMBY.

    • #17
  18. Kephalithos Member
    Kephalithos
    @Kephalithos

    Another potential problem: Average home price is calculated from August sales only — and only sales Realtor.com happens to know about. For a lot of rural counties, this means the sample size is teeny-tiny. Suppose only six houses sold in Anycounty, Anystate, in August. We have no way of knowing whether those six houses are actually representative of housing in that particular county.

    I’ll work on making a better map later. I have some ideas.

    Edit: Never mind. The way Realtor.com organizes its data stinks. Cleaning it would take more time than it’s worth.

    • #18
  19. namlliT noD Member
    namlliT noD
    @DonTillman

    Another interesting map for comparison; navigable rivers in the continental US:

     

    Added notes:

    I became sort of fascinated by navigable rivers a couple decades after moving from New York / Boston to Silicon Valley.  There are lots of navigable rivers on the east coast, and lots of cities and towns built right on them.  For commerce and development, of course.  And there are almost no navigable rivers on the west coast.  So I miss the rivers.  And lakes.

    The Colorado River and the Rio Grande are not navigable.  And the Missouri River, for example, is navigable only after that last hydroelectric dam in Yankton, South Dakota.

    • #19
  20. Mark Camp Member
    Mark Camp
    @MarkCamp

    Kephalithos (View Comment):

    Misthiocracy has never (View Comment):

    Mark Camp (View Comment):

    I don’t know. It makes me wonder if anyone on Ricochet has an app that generates these heat maps?

    Then we could, if we have the tabular data at hand, create a map of the correlations that are going on.

    I’ve tried to figure out GIS mapping. It’s way harder than I expected, especially if you’re using free/open source software, of which there is surprisingly very little available. I’ve never really been about to get it to work.

    I might be able to make something with QGIS (like I did for a Ricochet piece a few years ago). But I’d need to know what to make — and which data to use.

    I am thinking of using an Excel or csv file with the ratio between pop. density and affordability for each county, if Mhasnever has access to it.  A heat map would make the anomalies in correlations  jump out across the whole nation.

     

    • #20
  21. Gary McVey Contributor
    Gary McVey
    @GaryMcVey

    Maybe the distinguished author of the OP can answer my uneducated question: Canada’s largest west coast city, Vancouver, is fairly similar to US west coast cities. Both countries have big cities in the Great Lakes area, a center of commerce for almost 200 years. But on the Atlantic coast, Halifax is the only large Canadian city, whereas the US has many of its major population centers on the east coast. What’s the reason? Lack of natural harbors–er, harbours? Coastal topography? 19th century politics? 

    • #21
  22. Misthiocracy has never Member
    Misthiocracy has never
    @Misthiocracy

    Kephalithos (View Comment):

    Misthiocracy has never (View Comment):

    namlliT noD (View Comment):
    Indeed. Much of red area in the west… has no water.

    Again, that would presumably help contribute to affordability in those areas, since the property owner would have to cover more of the cost of infrastructure like water and electricity and whatnot.

    As such, I’m not too flabbergasted by affordability in the west. It makes sense to me.

    But Tennessee? I really don’t get why Tennessee is such an outlier.

    Well, if @ dontillman is right, it might be because Tennessee has both a high demand for housing and a relatively low median income. When COVID hit, I recall reading a lot of pieces about the Tennessee boom — how people were flocking there, how U-Haul rentals were sold out, etc.

    Even if the flood of out-of-staters drives up home prices, Tennessee still might look cheap to them, since they’re used to paying out-of-state prices. But this screws the natives, of course, who aren’t used to paying California prices for Tennessee houses, and whose wages haven’t caught up. Plus, peruse the state a little on Google Maps, and you’ll see that much of the existing housing stock in these red counties consists of trailers and shoddy little ranches set amid pastureland and forest. If you’re an upper-middle-class person hoping to escape the coastal craziness, I can’t imagine it’s easy to find the sort of place you’re looking for.

    Am I right, or am I missing something?

    But why should Tennessee be so much worse than its immediate neighbours?

    • #22
  23. Gary McVey Contributor
    Gary McVey
    @GaryMcVey

    Misthiocracy has never (View Comment):

    Kephalithos (View Comment):

    Misthiocracy has never (View Comment):

    namlliT noD (View Comment):
    Indeed. Much of red area in the west… has no water.

    Again, that would presumably help contribute to affordability in those areas, since the property owner would have to cover more of the cost of infrastructure like water and electricity and whatnot.

    As such, I’m not too flabbergasted by affordability in the west. It makes sense to me.

    But Tennessee? I really don’t get why Tennessee is such an outlier.

    Well, if @ dontillman is right, it might be because Tennessee has both a high demand for housing and a relatively low median income. When COVID hit, I recall reading a lot of pieces about the Tennessee boom — how people were flocking there, how U-Haul rentals were sold out, etc.

    Even if the flood of out-of-staters drives up home prices, Tennessee still might look cheap to them, since they’re used to paying out-of-state prices. But this screws the natives, of course, who aren’t used to paying California prices for Tennessee houses, and whose wages haven’t caught up. Plus, peruse the state a little on Google Maps, and you’ll see that much of the existing housing stock in these red counties consists of trailers and shoddy little ranches set amid pastureland and forest. If you’re an upper-middle-class person hoping to escape the coastal craziness, I can’t imagine it’s easy to find the sort of place you’re looking for.

    Am I right, or am I missing something?

    But why should Tennessee be so much worse than its immediate neighbours?

    It’s much more urbanized than its immediate neighbors. Memphis and Nashville are big cities and major transportation hubs. Note that the red zone extends a little southwards because of Atlanta, but other than that the Cotton South is not heavily citified, and neither is Tennessee’s northern neighbor, Kentucky. 

    • #23
  24. Columbo Member
    Columbo
    @Columbo

    Misthiocracy has never (View Comment):

    namlliT noD (View Comment):
    Indeed. Much of red area in the west… has no water.

    Again, that would presumably help contribute to affordability in those areas, since the property owner would have to cover more of the cost of infrastructure like water and electricity and whatnot.

    As such, I’m not too flabbergasted by affordability in the west. It makes sense to me.

    But Tennessee? I really don’t get why Tennessee is such an outlier.

    No state income tax is surely a factor.

    • #24
  25. Misthiocracy has never Member
    Misthiocracy has never
    @Misthiocracy

    Gary McVey (View Comment):

    Maybe the distinguished author of the OP can answer my uneducated question: Canada’s largest west coast city, Vancouver, is fairly similar to US west coast cities. Both countries have big cities in the Great Lakes area, a center of commerce for almost 200 years. But on the Atlantic coast, Halifax is the only large Canadian city, whereas the US has many of its major population centers on the east coast. What’s the reason? Lack of natural harbors–er, harbours? Coastal topography? 19th century politics?

    Why do so few people live in Maine? Terrible weather and lousy farmland.

    Also, too far away from our #1 trading partner (i.e. you guys).  Halifax was a much bigger deal back when all our trade was with Britain, but as relations with the USA progressively improved after the 1812 unpleasantness it meant that  Halifax’s strategic importance evaporated over time.  Today, Canada’s top ports are Vancouver, Montreal, and Prince Rupert (British Columbia). Halifax now comes in fourth. Meanwhile, the vast majority of trade in general is now by truck, rail, and pipeline, passing through Michigan, New York, North Dakota, Montana, and Idaho.

    Also, our first big population boom was around 1776 when we got a whole bunch of refugees from across the border for some reason that I cannot remember at the moment. They weren’t going to hike all the way to Nova Scotia to eke out a bare existence as fishermen when the King was offering them primo farmland for free in Ontario.

    Also, navigable waterways and water-power for factories.  There’s way more in Ontario and Quebec than in Atlantic Canada, with the St Lawrence and the Great Lakes being the most obvious.  The St Lawrence Seaway was completed in 1959, and by 1977 population growth in Halifax had absolutely cratered.

    • #25
  26. Matt Bartle Member
    Matt Bartle
    @MattBartle

    namlliT noD (View Comment):

    Another interesting map for comparison; navigable rivers in the continental US:

     

    Added notes:

    I became sort of fascinated by navigable rivers a couple decades after moving from New York / Boston to Silicon Valley. There are lots of navigable rivers on the east coast, and lots of cities and towns built right on them. For commerce and development, of course. And there are almost no navigable rivers on the west coast. So I miss the rivers. And lakes.

    The Colorado River and the Rio Grande are not navigable. And the Missouri River, for example, is navigable only after that last hydroelectric dam in Yankton, South Dakota.

    Looks like it includes the Erie and Welland Canals, so it’s not just rivers, technically.

    • #26
  27. Stina Member
    Stina
    @CM

    Al French (View Comment):

    Misthiocracy has never (View Comment):

    This map may help explain things a bit where the West is concerned. Still doesn’t explain Tennessee tho’.

    I don’t think it helps much. Much of the land is unbuildable, undesirable and would support very few people.

    But it does explain population density not correlating with housing prices in certain areas … like Montana.

    • #27
  28. Stina Member
    Stina
    @CM

    Mark Camp (View Comment):

    Kephalithos (View Comment):

    Misthiocracy has never (View Comment):

    Mark Camp (View Comment):

    I don’t know. It makes me wonder if anyone on Ricochet has an app that generates these heat maps?

    Then we could, if we have the tabular data at hand, create a map of the correlations that are going on.

    I’ve tried to figure out GIS mapping. It’s way harder than I expected, especially if you’re using free/open source software, of which there is surprisingly very little available. I’ve never really been about to get it to work.

    I might be able to make something with QGIS (like I did for a Ricochet piece a few years ago). But I’d need to know what to make — and which data to use.

    I am thinking of using an Excel or csv file with the ratio between pop. density and affordability for each county, if Mhasnever has access to it. A heat map would make the anomalies in correlations jump out across the whole nation.

     

    Excel has a built in conditional format that resembles a heat map. I use it for my budget envelope warnings.

    • #28
  29. Locke On Member
    Locke On
    @LockeOn

    Misthiocracy has never: WHAT THE HECK IS GOING ON IN TENNESSEE!??!

    Same thing as is going on in my home in SW Idaho: A huge inward migration, mostly from blue state refugees. 

    It’s starting to slow down as the recession and inflation bite, and there’s enough new construction still underway that there will be some downward pressure coming soon.

    • #29
  30. Locke On Member
    Locke On
    @LockeOn

    BTW, you can do quick & dirty map type charts from Google spreadsheets.  See here, for instance:

    https://www.howtogeek.com/744526/how-to-create-a-geographical-map-chart-in-google-sheets/

    I’ve used this a couple of times when doing analytics for non-profits.

    • #30
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