This is the second map that I created with my urban geographer brother Matthew Mulbrandon on the Housing Price Index (HPI). A description of these maps as well as the first set can be found on Design & Geography. This new set is inflation adjusted and covers the entire span of the Federal Housing data set 1991-2010.
Data source: Federal Housing Finance Agency
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Unlike prices in the stock market (which are the same no matter where you you live) your experience of the housing bubble was determined by your location in the years 2000-2010. These maps (which I created with Matthew Mulbrandon) give a quick and easy glance at the change in housing prices focusing on the bubble in the United States. They show the Housing Price Index (not inflation adjusted) by state. As you have probably seen in the news, the housing bubble was largest in the West and the South East, in states such as California, Arizona, and Nevada and Florida. Those states had the largest increase from 2000-2006 (height of the bubble) and the largest decreases from 2006-2010. However, from 2000 to 2010 one can see all states (except Michigan) had more moderate price increases. You can learn more about the housing market at DesignandGeography.com
Data source: Federal Housing Finance Agency
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Our homes have changed over the last 70 years, including homes size, building technology, family size, and a rise in standard of living. As people’s income increased over the 20th century they bought bigger and better homes. This caused the median home value to go up even when taking into account the effect of inflation. For example a full bath cost a lot since you need double plumbing for hot and cold water while a flush toilet needs a home connected to a sewer system or septic tank. In addition, housing costs include both land and the house; where building space in limited (i.e. cities) land will increase in value with population growth.
Median home value calculated by the U.S. Census factors in all of these changes and covers the housing markets in both rural and urban areas. While the historical price index created by Robert Shiller looks at home prices as an investment (like stocks) focusing on the resale prices of a subset of the standard, unchanged houses in large metro areas.
Data Source for Housing Price Index from Robert Shiller’s Irrational Exuberance
Median Home Values: Historical Census of Housing Tables Home Values; ”An Approach for Calculating Reliable State and National House Price Statistics”
Characteristics: Housing Characteristics In The U.S.; Median and Average Square Feet of Floor Area
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A $10,000 house in 1890 would be worth almost the same in real dollars in 2010 but more than $350,000 in nominal dollars in 2010. Which matters to the home seller, real or nominal prices? If a seller is holding a mortgage then the question is: Can I sell for more or less than I owe? Since that loan amount is not adjusted for inflation then the nominal value is more importent both the seller and the mortgage holder. It is when nominal prices fall that banks have trouble with high rates of mortgage defaults. But if you are looking at the long-term value of real estate as an investment (compared to stocks or bonds) then you need to take into account the real growth.
Data Source for Housing Price Index from Robert Shiller’s Irrational Exuberance
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Visualizing Economics was started in 2006 by Catherine Mulbrandon. Here you will find graphics explaining the US economy.
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