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HousingFall19.pptxHousing
Housing
Cost of Housing & Affordability
Bureau of Labor Statistics (BLS) Shelter Index
Consumer Price Index (CPI) subcategory of shelter costs.
Conducted monthly
National Association of Realtors (NAR)
Provides data on existing pending home sales, actual sales, price data to the county level, and housing affordability indexes.
Conducted monthly
The Housing Bubble
Shiller Index revealed high price volatility
240% ↑ from 1997-2006 and 120% ↓ from 2006-2009
Federal Housing Finance Administration was much less volatile
Explanation: Shiller was a more comprehensive measurement and included sub-prime financed units.
Housing data is often too broad in scope
Most data is at the metropolitan area or larger.
Limited neighborhood, city, and county analysis.
California and San Diego Association of Realtors provide more geographically specific prices.
Predicting the housing bubble was challenging
Housing prices change due to fundamental and speculative factors
Fundamentals (less volatile): income, rental value, inflation, vacancies, demographics, etc.
Speculative (highly volatile): buy low and sell high for a quick profit.
Some researchers confused fundamental and speculative forces and failed to accurately predict the bubble.
Housing
Both metrics only represent price data collected from sold homes, inadequately reflecting the value of homes that are not sold: particularly important for distressed sales.
FHFA does provide data on appraisals for refinancing but this may overestimate values since the only homes that are likely refinanced are the ones that have sustained their value.
Rates increased to an all time high of 69% in 2004 and racial gaps had shrunk significantly.
Formula: (owner-occupied households) ÷ (owner & renter occupied households)
Rates can increase due to:
Renters becoming owners
Renters consolidate (move back home, take in roommates, etc.).
Important: When the numerator and denominator are simultaneously changing, quick conclusions should not be made.
Housing
Quality of Housing
Compiles data on housing size and quality, neighborhood characteristics, home financing, and recently moved households.
Conducted biennially in odd-numbered years.
Changes in housing prices may reflect quality changes.
Shiller and FHFA control for many price influential variables by looking at the same home over time (lot size, square footage, neighborhood, schools, etc.) making adjustments upon each new sale.
Downward skew in prices during housing bust resulted, in part, from increased short-sales and foreclosures.
Units failed to represent the typical home (Sample Bias)
Geographical Units
Important for detailed geographic issues and data consistency across time.
“City”, “County”, “Rural Area” are often subjective and arbitrary.
Census defines
“Urban” as any incorporated place with more that 50,000 residents and “Built Up” characteristics.
Census Blocks (11.5 million in U.S)
Census Tracts (65,000 in U.S.)
Metropolitan Statistical Area:
Determined by the Office of Management and Budget (OMB) based on economically and socially linked geographies.
389 in the U.S as of 2018.
Housing
Best Places to Live
Different studies use different variables (climate, crime, housing, culture, education, income, wealth, public transportation, etc.)
Different studies may weigh variables differently.
Hedonic Pricing: analyzes price differences to impute a value for a qualitative variable.
How much more would the same house sell for in San Diego vs. El Centro.
Challenge is to determine which factors are causing the price differences (climate, crime, school system, etc..)
Housing
Homeless
Estimates suggest anywhere from 500,000 to 3 million homeless in the U.S.
Lower estimates: point-in-time head counts.
Records people in shelters, transitional housing, and on the street.
HUD reports 553,742 (0.17% of population) homeless people on one night in Jan. 2017
Fails to consider length of homelessness.
Overestimates chronic homelessness since some individuals are only temporarily homeless.
Underestimates the number of people that have been homeless at some time in their life.
Larger estimates: one year estimates.
HUD reports 1.56 million people spent at least one night in a shelter from 2009-2010
Underestimate; does not include those on the streets.
Highest estimates: extrapolation
Point-in-time estimates ÷ population in poverty
National Law Center on Homelessness and Poverty and the Urban Institute generate a range of 2.5-3.5 million based on their January 2015 report.
Fails to consider that the proportion of those in poverty that are homeless may change over time.
Housing
Segregation
Typically measured by census track demographic data, obscuring neighborhood segregation.
The proportion of a group that would need to move in order to achieve perfect integration.
1970 to 2010 index suggests decreased dissimilarity (less segregation).
May be due to movements of Asians and Hispanics rather that Blacks.
Housing
