Search This Blog

Sunday, May 1, 2016

Coming Apart: Home Values

Ted Mellnik, Darla Cameron, Denise Lu, Emily Badger and Kat Downs report at The Washington Post:
The Post analysis, based on data from Black Knight Financial Services spanning 2004 through 2015, shows how the nation’s housing recovery has exacerbated inequality, leaving behind many Americans of moderate means. It also helps explain why the economic recovery feels incomplete, especially in neighborhoods where the value of housing — often the biggest family asset — has recovered little, if at all.
While a typical single-family home has gained less than 14 percent in value since 2004, homes in the most expensive neighborhoods have gained 21 percent. Regional factors such as the Western energy boom explain some differences, but in many cities the housing market’s arc has deepened disparities between the rich and everyone else, such as in Boston, where gentrifying urban neighborhoods have thrived and far-flung suburbs have fallen behind.

Also striking is how minority neighborhoods lag in the recovery. Zip codes where blacks are the largest population group are more than twice as likely as white Zip codes to have homes now worth less than in 2004.
Badger reports on California, comparing San Francisco and Stockton:
The low ridgeline is a physical barrier between unequal fortunes, between record housing riches in the Bay Area and an epidemic of lost wealth in the Central Valley. Home values have doubled in some San Francisco and Silicon Valley Zip codes in little more than a decade. But in the hardest-hit Stockton Zip codes, homes over this same time have lost 20 percent of their value.
But when the bubble burst — and it burst in the Bay Area, too — places such as San Francisco and Palo Alto were much better prepared to weather the downturn. Stockton was left with bad mortgages, few high-skilled jobs and public debt that would eventually push the city into bankruptcy.
The Bay Area still had Apple and Intel and Stanford and tourists and those spectacular views of the ocean. Those communities hadn’t overbuilt because they hadn’t actually built much new housing in decades; instead, they had let places like Stockton absorb the demand.
Stockton has become a long-distrance bedroom community, with consequences for its social capital:
“At some point, Stockton stopped growing in its own right and became part of something else,” says Hannah Harrison, a schoolteacher and Stockton native who moved back here after college at Berkeley when she and her husband realized that their careers would never allow them to afford the Bay Area. Now she and her husband worry about what it means for a city to become a bedroom community to someplace else very far away, to have so many children whose parents return home late every night, so many community members whose lives are fundamentally oriented elsewhere.