Comments on: Housing quiz http://blogs.reuters.com/felix-salmon/2010/04/30/housing-quiz/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: BenE http://blogs.reuters.com/felix-salmon/2010/04/30/housing-quiz/comment-page-1/#comment-14269 Fri, 30 Apr 2010 20:04:27 +0000 http://blogs.reuters.com/felix-salmon/?p=3629#comment-14269 We do need to figure out a way to normalize for quality on rentals vs. owner occupied homes, but these ratios are a great start at affordability analysis. This chart is a little funny to me though — especially fitting a linear trend to it. In what case would we expect home prices to not be correlated to a ratio that also contains home prices?

I’ve done a little work on affordability myself. Using the FHFA home price index and the census median income and rent figures I’ve calculated price-to-income and price to rent ratios for a bunch of metros here:

http://www.deptofnumbers.com/affordabili ty/

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By: finandistboy http://blogs.reuters.com/felix-salmon/2010/04/30/housing-quiz/comment-page-1/#comment-14265 Fri, 30 Apr 2010 17:22:45 +0000 http://blogs.reuters.com/felix-salmon/?p=3629#comment-14265 Boston and Portland

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By: drewbie http://blogs.reuters.com/felix-salmon/2010/04/30/housing-quiz/comment-page-1/#comment-14261 Fri, 30 Apr 2010 15:46:18 +0000 http://blogs.reuters.com/felix-salmon/?p=3629#comment-14261 Boston and Honolulu

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By: DanHess http://blogs.reuters.com/felix-salmon/2010/04/30/housing-quiz/comment-page-1/#comment-14258 Fri, 30 Apr 2010 14:49:42 +0000 http://blogs.reuters.com/felix-salmon/?p=3629#comment-14258 Nice chart! Real data! This is been one of your best blogging weeks ever! You are right about the apples-to-oranges comparison; rental housing stock is dramatically different from owner-occupied housing stock.

This also in part explains my earlier disagreement with you, Felix, regarding bubbliness of the housing market. You look out the window and see New York while I look at the DC area, which is one of the least expensive ‘vibrant urban centers.’

In our new age of American statism, the capital is the place to be, much like Moscow or Brussels or Beijing are top places to be in those countries.

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By: framed http://blogs.reuters.com/felix-salmon/2010/04/30/housing-quiz/comment-page-1/#comment-14255 Fri, 30 Apr 2010 14:04:34 +0000 http://blogs.reuters.com/felix-salmon/?p=3629#comment-14255 I would be careful with regard to any number coming out of David Leonhardt’s interactive device. First, he doesn’t seem to understand that $1 today is not the same as $1 seven years from now. As future cash flows are not discounted and much of the benefit from ownership often comes from house price appreciation years in the future, this will significantly overstate the benefit of ownership. Second, he discusses the opportunity costs, but I can’t see where they fit into his calculations.

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By: creed223 http://blogs.reuters.com/felix-salmon/2010/04/30/housing-quiz/comment-page-1/#comment-14251 Fri, 30 Apr 2010 13:07:14 +0000 http://blogs.reuters.com/felix-salmon/?p=3629#comment-14251 Boston and Charleston, SC

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By: MitchW http://blogs.reuters.com/felix-salmon/2010/04/30/housing-quiz/comment-page-1/#comment-14250 Fri, 30 Apr 2010 13:03:48 +0000 http://blogs.reuters.com/felix-salmon/?p=3629#comment-14250 MattF, DC is almost assuredly a more expensive city in which to rent than is Baltimore. With similar house prices, that makes DC look “cheaper.”

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By: MitchW http://blogs.reuters.com/felix-salmon/2010/04/30/housing-quiz/comment-page-1/#comment-14249 Fri, 30 Apr 2010 13:02:34 +0000 http://blogs.reuters.com/felix-salmon/?p=3629#comment-14249 Bostona and San Jose were my initial feelings, but I’ll switch San Jose to Portland.

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By: MattF http://blogs.reuters.com/felix-salmon/2010/04/30/housing-quiz/comment-page-1/#comment-14248 Fri, 30 Apr 2010 12:57:35 +0000 http://blogs.reuters.com/felix-salmon/?p=3629#comment-14248 Rather surprising that the graph shows Washington DC is more ‘reasonable’ than Baltimore. Something odd there.

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By: ACS http://blogs.reuters.com/felix-salmon/2010/04/30/housing-quiz/comment-page-1/#comment-14247 Fri, 30 Apr 2010 12:49:52 +0000 http://blogs.reuters.com/felix-salmon/?p=3629#comment-14247 Honolulu & San Jose. Outside chance one is Boston, but Boston is probably the other point down a bit lower with Seattle & San Diego.

One other thing, your comment about ghettoizing neighborhoods just doesn’t hold water. So, New York and LA are more likely to have renter ghettos and owner neighborhoods than Atlanta or Tampa? Have you BEEN to Atlanta or Tampa? If anything, it’s the other way around… New York has tons of high-end renters. It’s one of the few markets in the country, because it is just so expensive, where you have people with very high incomes who actually still choose to rent.

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