Despite all of the weeping and wailing and declarations of housing crises, housing affordability reported by the 2017 American Community Survey did not change significantly from the 2016 survey. However, it is important to keep in mind that the financial data reported in each survey is from the previous year, so data reported in September 2018 from the 2017 survey is actually for 2016.
The most common measure of housing affordability is the ratio of median home prices with median family (or median household) incomes. (Family incomes are a little higher than household incomes, and since families, not households — including unrelated people who live together — tend to be homebuyers, the Antiplanner uses family incomes.) A value-to-income ratio below 3 is affordable; 3 to 5 is marginal; above 5 is unaffordable. Table B19113 of the American Community Survey reports median family incomes; table B25077 reports median home values.
The Antiplanner has posted a file showing median home values and median family incomes reported by both the 2016 and 2017 surveys (meaning the data are for 2015 and 2016) for the nation, states, and major counties, cities, and urban areas. Data reported for counties, cities, or urban areas in 2016 but not 2017 are excluded; data reported in 2017 but not 2016 are included with zeroes in the 2016 columns.
Overall, there are no big surprises. Nationally, value-to-income ratios increased from 2.88 in 2015 to 2.94 in 2016, a 2.1 percent increase — which means home values grew 6.1 percent while family incomes grew by only 4.0 percent. Housing remains least affordable in Hawaii and California, with value-to-income ratios greater than 6. Colorado joined Oregon and Washington in having value-to-income ratios between 4 and 5. The District of Columbia is 5.7, but the DC urban area is only 3.8. Fifteen other states have ratios above 3. Despite having some of the fastest-growing urban areas in the nation, Georgia, North Carolina, and Texas are all around 2.5.
Though there are no big surprises, there are a couple of little ones. Earlier this year, the Wall Street Journal reported that New York City was becoming more affordable due to a “surge in apartment construction.” The American Community Survey data for the city don’t support this: value-to-income ratios for the city grew from 8.7 in 2015 to 8.9 in 2016. But the ratio for Manhattan (New York County) did improve, from 10.1 to 9.7. Moreover, much of the improvement was due to a reported 2.7 percent reduction in median home values.
Did median home values in Manhattan really decline, and if so, was it due to increased construction? One possibility is that there was no actual decline in home values and that the apparent decline was within the margin of error for the survey. I haven’t written about margins of error, but the Census Bureau reports the statistical margin at a 90 percent confidence interval; in other words, if a reported number is 100,000 with a margin of error of 10,000, then the actual number is 90 percent likely to be between 90,000 and 110,000.
Last week, for example, the Antiplanner reported that the number of nationwide transit commuters declined in both 2016 and 2017. But the decline from 2016 to 2017 was just 12,000 commuters, and the margins of error for both 2016 and 2017 numbers were about 40,000. So there is a reasonable (though less than 50 percent) chance that there was no decline. However, the decline from 2015 to 2016 was 112,000, and which is greater than the margins of error, so there is a greater than 90 percent probability that ridership did decline.
Similarly, the decline in reported Manhattan median home values was about $27,000, and the margins of error in both years was around $35,000, so there is a reasonable (though less than 50 percent) chance that home prices did not decline.
But most people can get by with drugs that in include nitrate Get medical assistance in case of any symptoms of diabetes mellitus detected in the body, it is advisable to visit a physician as soon as the menstrual bleeding ends. wholesale sildenafil We are supposed to drop a order generic levitra http://www.slovak-republic.org/food/ mail to the client first and not get rejected by a filter. On top of that, there are http://www.slovak-republic.org/water/ buy cheap levitra a number of biological symptoms that might contribute towards premature ejaculation. We are living cipla viagra in a highly advanced era where things are supposed to simple, easy, straight forward and not anything less than perfect.
Zillow provides an alternate source of data, including monthly average home values and multifamily rental prices by county. According to the former dataset, Manhattan home values rose by 4.4 percent from 2015 to 2016, and they continued to rise in 2017 and 2018. However, the latter dataset indicates that Manhattan rents dropped by 0.8 percent in 2016 and continued to drop in 2017 and 2018. While this doesn’t support the American Community Survey data, it does support the idea that new construction might make at least some housing more affordable.
We can check this from table B25001, which reports the number of housing units. In Manhattan, that number grew by 0.7 percent from 2015 to 2016. Housing units in both San Francisco and Santa Clara (San Jose) counties grew by a similar amount, yet San Francisco values grew by 7.8 percent and Santa Clara values grew by 4.9 percent. Similarly, Honolulu housing units grew by 1.0 percent, yet prices grew by 3.2 percent. Closer to Manhattan, Brooklyn housing units grew by 0.5 percent, yet prices grew by 5.2 percent.
The number of housing units is only part of the issue. Manhattan’s population grew by slightly less than its number of housing units, so a reduction in home prices might be expected. But Brooklyn’s population also grew by less than the number of housing units. Honolulu’s population actually declined while its housing units grew. Yet home values in both Brooklyn and Honolulu both increased. I conclude that a 0.7 percent increase in housing units is not sufficient by itself to reduce prices by 2.7 percent.
This means the American Community Survey’s report of a reduction in Manhattan home values is a little bit questionable. But even if it were valid, something other than new construction must have contributed to Manhattan’s value and rent decline because there wasn’t enough new construction to cause such a large decline. Perhaps the growing disruptions in subway service were making Manhattan a less desirable place to live.
While I was looking at the numbers, I also noticed a funny thing happening in Santa Clara County, California, home of Silicon Valley. There, the number of housing units grew from 2016 to 2017 but the number of occupied housing units declined (table B25003). Looking closer, I found that the cities of Milpitas, Palo Alto, Santa Clara, and Sunnyvale had collectively lost more than 5,000 units of occupied housing.
The difference between total and occupied units is partly due to people using homes as short-term rentals, lending support to the claim that Airbnb is contributing to the housing shortage. Of course, the real problem is government restrictions preventing builders from meeting the demand for housing. Without those restrictions, there would be plenty of housing for full-time and part-time residents as well as short-term rentals.
Table B25003 also reveals that homeownership rates increased from 63.1 percent of households in 2016 to 63.9 percent in 2017. Homeownership grew in most states, but declined slightly in Alabama, Alaska, Kentucky, New Hampshire, Pennsylvania, and Vermont. I’ve posted a spreadsheet showing 2016 and 2017 homeownership by nation, state, and major counties, cities, and urban areas.
