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We’ve listened to the pundits, suffered through the debates, scrutinized the polls, and squinted at that ever-changing electoral map. Everyone, it seems, is desperately trying to get a true read on what’s going to happen, in one of the most bitterly contentious presidential elections our nation has ever seen.
There is no shortage of critical issues hanging in the balance: the pandemic, the economy, national health insurance, climate change, race relations, oh my! It seems at times that the United States has never been more sharply divided.
But where do the deeply etched red-state/blue-state splits really come from? And how much can the huge housing differences across the nation tell us about how we got here—and where we’re going? We turned to the data to find out.
We analyzed eight major housing indicators, to see how greatly they diverged between red, blue, and swing states.
To come up with our findings, realtor.com® analyzed internal data to come up with metrics for home and rental price, price appreciation, home size, and inventory. We took the age of homes and the homeownership rate from U.S. Census Bureau data. The second-home information came from Optimal Blue, a real estate data firm specializing in lending information.
We can’t pinpoint the exact cause of the rancor that’s developed between many Republicans and Democrats. But we can look at the substantial housing differences that may be contributing to the divide. They include everything from blue-state denizens paying a whole lot more for their homes and rentals, to those in red states having larger homes to live in.
“Life can be really different, depending on where you live,” says realtor.com’s chief economist, Danielle Hale. “That’s reflected in different real estate norms, and it has a role in how you view your life and your priorities and values.”
She adds, “Owning a home literally gives people a stake in the ground, and that seems to translate into [more of] an incentive to vote.”
The analysis identified 20 red states, 17 blue states plus Washington, DC, and 13 swing states. We used Politico’s designations to break out swing states. They included Arizona, Florida, Georgia, Iowa, Michigan, Minnesota, Nevada, New Hampshire, North Carolina, Ohio, Pennsylvania, Texas, and Wisconsin.
So as President Trump and former Vice President Joe Biden enter the homestretch, what are the some of the biggest housing differences between red, blue, and swing states that might help push them to the finish line?
Red: $249,650*
Blue: $424,500
Swing: $310,698
Home prices are top of mind for just about everyone. A strong housing market has traditionally been a sign of a strong economy. This year, everything is topsy-turvy, though, with home prices shooting up to new heights in most of the country, despite a recession.
In this pandemic-induced downturn, prices are soaring instead of falling, thanks to record-low mortgage rates and to Americans wanting larger spaces of their own where they can quarantine.
The median home list price hit an all-time high of $350,000 nationally in September, according to realtor.com.
Home prices are typically highest in blue states, where residents often make more money, which allows them to afford their expensive places. Some of the nation’s biggest and priciest cities are in these liberal-leaning states, which boast thriving job markets, highly skilled workers, and more cosmopolitan populations.
That’s why a teeny-tiny home in San Francisco or Manhattan is going to cost a whole lot more, and attract more interested buyers, than a much more spacious abode in a rural community with a struggling economy. There are simply fewer good jobs to attract new residents to rural areas.
2. Where have prices risen the most since the last presidential election?
Red: 30.9%**
Blue: 26.5%
Swing: 35%
Tony Frenzel
Home appreciation, a nightmare for first-time buyers and a godsend for sellers, is strongest in the current swing states, which tend to be going through a demographic shift.
Many of these purple places have become the new ‘It’ areas to be. They have growing job markets, creating all kinds of new opportunities; lots of culinary, cultural, and recreational amenities; and lower prices than the big cities on the coasts.
As these states lure folks away from liberal locations, the new residents are changing the political coloration of many of these formerly more conservative areas. And all that new demand for a limited amount of homes for sale is driving prices up, up, up.
The red states of North Dakota, West Virginia, and Alaska reaped the next smallest gains in property values, with appreciation of just 1.3%, 6.3%, and 8.8% respectively.
3. Where has the number of homes for sale fallen the most since the 2016 election?
Red: -54%**
Blue: -49%
Swing: -59%
Tony Frenzel
The historic lack of homes on the market has become one of the biggest challenges for buyers. Even those with steady jobs, hefty down payments, and the ability to secure a mortgage with record-low rates are struggling to find a home of their own.
The number of properties for sale is down the most in swing states, for the same reasons why home appreciation is the highest there: They’re becoming increasingly desirable places to live, so they’re attracting new residents. Builders can’t keep up with the demand. So it’s tougher to find a home, and prices are rising.
Inventory was down the most both in the swing state of New Hampshire and in the red state of Idaho—by 71% in both instances. In Idaho’s case, it’s likely due to all of the Californians and tech workers moving in. The state has a burgeoning tech sector, lower home prices, and a more reasonable cost of living than the Golden State.
The number of homes for sale rose in just two spots: Washington, DC, at 29%, and Hawaii, at 9%. It’s an election year, so it makes sense that many folks in DC are planning to sell and move back home.
4. Where are homes the biggest—and the smallest?
Red: 1,989 square feet
Blue: 1,839 square feet
Swing: 1,868 square feet
Tony Frenzel
It’s not exactly a surprise that homes are biggest in red states, which tend to be located in the South and Midwest, where land and construction labor is usually cheaper, and there are fewer building and zoning regulations. It’s easier to go big.
Homes in the red state of Utah had the most median square footage, at 2,546 square feet. Meanwhile, homes in Washington, DC, had the least, at 1,136 square feet.
There simply isn’t much vacant land available in many of the big, blue cities to put up new housing. Think the heart of Manhattan versus the plains of Nebraska. So buyers make do with smaller condos, townhomes, and duplexes.
5. Where are the oldest and newest homes?
Red: 41 years
Blue: 46.5 years
Swing: 44 years
It seems that just about everyone these days is seeking a HGTV-ready home with granite countertops, a soaking tub, and droolworthy hardwood floors. (That could be because they’ve been stuck at home, binge-watching the channel, since the pandemic began shutting the country down in the spring.) But many buyers simply can’t afford, or can’t find, new construction.
The youngest homes are in the red states, which are often alive with the sound of busy building crews.
On the flip side, the oldest homes tend to be in Democratic strongholds, like Boston, where the nation was founded.
“Homes are going to be older in urban areas,” says R Street’s Bydlak. “East Coast cities are the core base of the Democratic Party, and those are some of the oldest parts of the country.”
The newest homes were in the swing state of Nevada, at an average of just 27 years old. New York had the oldest homes, at an average age of 60—practically senior citizens.
6. Do Democratic or Republican states have higher homeownership rates?
Red: 60%
Blue: 57%
Swing: 59%
Tony Frenzel
Homeownership rates were just a tad bit higher in red states, which also offer less expensive home prices. Makes sense, right?
And homeowners tend to be a little more conservative than renters, says John Weicher, director of the Center for Housing and Financial Markets at the Hudson Institute, a conservative-leaning think-tank in Washington, DC.
“If you own your own home, you’ve got [more of] a stake in society,” says Weicher, who served as an assistant secretary of housing for the U.S. Department of Housing and Urban Development in the first term of President George W. Bush. Homeowners, he notes, are more likely to want to protect their net worth and vote on issues that can affect their finances, such as taxes.
The swing states Iowa and Minnesota had the highest homeownership rates, at 65%. That means about two-thirds of folks in those states own the roofs over their heads.
The blue stronghold of Washington, DC, had the lowest homeownership rate, just 38%. That’s probably because the makeup of the city shifts, depending on which party is in power. So politicians, their staffs, government appointees, lobbyists, and a whole host of other workers are continually cycling in and out.
New York had the second-lowest rate of homeownership, of 47%, followed by Hawaii and California, at 50% and 52% respectively.
7. Median monthly rental prices for one-bedroom apartments
Red: $877
Blue: $1,564
Swing: $1,150
The priciest places for buyers also tend to be the most expensive for renters. The big, blue cities, where the good-paying jobs, top-rated restaurants, and all the best museums, theaters, and sporting facilities can be found (many of them are still shuttered by the pandemic), are typically the priciest of them all.
That could explain why red-state renters got the best deals—particularly those in Oklahoma. Rents for one-bedroom apartments were lowest in Oklahoma, at $710 a month, followed closely by West Virginia at $715 and Arkansas at $717.
Meanwhile, the most expensive states for home buyers were also the priciest for renters—and they were overwhelmingly blue. New York renters shelled out the most, at a median $2,599—nearly four times what folks paid in Oklahoma. The second-highest rents were in Massachusetts, at $2,228, and the third-highest were in California, at $2,225.
8. Highest percentage of second homes
Red: 5%
Blue: 8%
Swing: 4%
Blue states may have low homeownership rates—but they also have the highest percentage of vacation homes. (Bet you didn’t see that one coming!) The idea of weathering the pandemic in a beach house or a cabin in the mountains sounds awfully sweet, right about now.
The blue bastions of Virginia, Washington, DC, and Massachusetts (hello, Cape Cod!) had the highest percentage of vacation homes, at 23%, 21%, and 15% respectively. And it’s not uncommon for those working in politics and government to buy second homes in DC, and then return to their home states at the end of the latest session.
Folks owned the fewest vacation homes in the swing state of Ohio and the red states of Indiana and Kansas. Second homes made up only 1% of homes in these states.
* Median home list prices as of September 2020, using realtor.com data
** Median home list prices from September 2016 compared to September 2020, using realtor.com data
The post How Red State/Blue State Differences in Housing Might Tip the Election appeared first on Real Estate News & Insights | realtor.com®.
source https://www.realtor.com/news/trends/red-versus-blue-housing-differences-could-help-shape-2020-election/
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