• Cyburbia is a friendly big tent, where we share our experiences and thoughts about urban planning practice, planning adjacent topics, and whatever else comes to mind. No ads, no spam, no echo chambers. Create your FREE Cyburbia ID, and join us today! You can also register through your Reddit, Facebook, Google, Twitter, or Microsoft account.

The Housing Price Paradox

BKM

Cyburbian
Messages
6,464
Points
29
I don't have a link, but my hometown (Fort Wayne, Indiana) was featured in an interesting New York Times front page article about the diversion in housing prices in this country (the US). The Coasts have seen a vast increase in housing prices over the past twenty years, with much of the heartland outside the biggest cities seeing relatively little increase (Rochester, NY and the area around Houston showed NEGATIVE price change between 1983-2003.)

An interesting little article. Its amazing the house you can get for $200,000 in my hometown.

Is this yet another example of the "midwestern superiority" you all are talking about? :)
 

mendelman

Unfrozen Caveman Planner
Staff member
Moderator
Messages
12,743
Points
42
Midwest is superior (lake)

I have seen this when I look at the price of housing out here.

Outside the Chi-metro area, housing prices are much better, but salaries are also lower. Being in Chicago, I am amazed that houses in the worst neighborhoods are still way to high.

I envy my brother. He owns a 3 bedroom bungalow in the town we grew up in. He bought it when he was my age, and now he has five years of equity, and he has a two minute bike ride to work.
 

BKM

Cyburbian
Messages
6,464
Points
29
Yeah, I think Indiana was about 47th in the nation for planners' salaries.

I came to California because I got an immediate $15,000 per year raise and much better benefits. Rents were not THAT much cheaper in Knoxville, Tennessee, and I bought my townhouse seven years ago before the REAL nasty inflation (its doubled now-and in an outer suburb where attached housing is considered undesirable).

As the article makes clear, the insanity on the coasts just cannot contniue. There will be a correction.
 

Duke Of Dystopia

Cyburbian
Messages
2,713
Points
24
BKM said:
Is this yet another example of the "midwestern superiority" you all are talking about? :)
Its not a superiority complex, its practicality and pragmatism run amok. Many of us in the midwest share the last remaining vestiges of our large German and Scandanavian heritage this way.

I live and work in the CHI burbs. I love CHI itself and all of the goings on, but the schools suck, housing in a decent neighborhood for a decent price is nonexistent. I find that I can live 8 minutes from work and not worry about the education issue too much, and I can commute to the places I like to hang out at night. Perfect match.

More issues with living arise. Everything in CHI is 20% than in WI. Housing rates are double. I ask if that 30 minute proximity to theateres you might use 1 time a month, a stadium you visit 2 times a year is really worth that. Your average common sense midwesterner knows it is not, unless you or in the top 2 quintiles of the income scale, single/divorced no kids, or an empty nester.

If you make 40k outside the MSA of CHI, you need to earn the equivelent of 52K in the MSA. To find a similar rate of living. Outside the MSA, a house for 150k to 200k is a great value. Inside it is not even the starting figure for a decen condo.
 

H

Cyburbian
Messages
2,850
Points
24
Since this thread is sort of Ft Wayne and Chicago, either of you all ever go to Lake Wawasee IN? My aunt has a lake home there and all the license plates are either Indiana #2 (Ft W) or Illinois (CHI).

I love it there. You know there is a hotel there that Capone used to hang out at when he wanted to escape the city life, they have a great steak.
 

Duke Of Dystopia

Cyburbian
Messages
2,713
Points
24
Huston said:
I love it there. You know there is a hotel there that Capone used to hang out at when he wanted to escape the city life, they have a great steak.
Nope, sounds interesting though.

Am I right about the practicality & pragmatism or is that just my take on things. I have a friend who is a professor in Urban studies that is both repelled and oddly attracted to Green Bay. When I mention my theory to him, he agrees that it seems to be the case.

Traveling the world kind of cures that for those of us midwesterners that manage to break the odd gravity of fly over country :) We start dreaming of the incredible potential we live next too and how to fix it (read the tag line:) )

Feedback would be welcome.
 

H

Cyburbian
Messages
2,850
Points
24
Duke Of Dystopia said:
Am I right about the practicality & pragmatism or is that just my take on things. I have a friend who is a professor in Urban studies that is both repelled and oddly attracted to Green Bay. When I mention my theory to him, he agrees that it seems to be the case.

Traveling the world kind of cures that for those of us midwesterners that manage to break the odd gravity of fly over country :) We start dreaming of the incredible potential we live next too and how to fix it (read the tag line:) )

Feedback would be welcome.
I have never lived in the Midwest (been there many times), and have both visited and had interaction with the Germany and Scandinavia & they seem very practical & pragmatic as a culture. Many of these traits seem to be carried on in the Midwest from my observation as a visitor.

Very clean, very strict.

One thing noticed is how farmers in Indiana paint their fences and barns; farmers in the south do not. Farmers in Ind. mow the grass by the road; farmers in the south do not.

Just an observation.

Edit: Another cultural example is how a German barmaid will practically beat you over the head if you don’t use a coaster. I think this sums up the attitude on things. ;)
 
Last edited:

Cardinal

Cyburbian
Messages
10,080
Points
34
Huston, Your comments on farmers in the midwest reminded me of something my relatives in Canada commented on years ago. They are also farmers, and were surprised at the way midwest farmers would not paint their buildings and left equipment outside to face the elements. I think Canada has a culture to be even more tidy than in the midwest. The midwest, in turn, is tidier than the south. I wonder how much of that comes from the Germanic heritage (seventy percent of Wisconsin residents claim at least part Germen ancestry) and how much is now the culture of the region.
 

jordanb

Cyburbian
Messages
3,232
Points
25
Re: Re: The Housing Price Paradox

Duke Of Dystopia said:
Its not a superiority complex, its practicality and pragmatism run amok. Many of us in the midwest share the last remaining vestiges of our large German and Scandanavian heritage this way.

I live and work in the CHI burbs. I love CHI itself and all of the goings on, but the schools suck, housing in a decent neighborhood for a decent price is nonexistent. I find that I can live 8 minutes from work and not worry about the education issue too much, and I can commute to the places I like to hang out at night. Perfect match.
One of the things you have to remember is that if you live in the city, (depending on your situation) you can usually get rid of your car, which will save a minimum $3000/yr. Many people, I'm sure, end up paying less for housing in the city than they'd be paying for housing+car in the suburbs.

Also, I view it as paying for quality rather than quantity. I'd have a much larger place in the 'burbs for the same money, but it'd be in a tract house in a completly homogenous subdivision. Here, I'm in an 87 year old brick building near the L and the lake, awesome parks, a walkable neighborhood, and all of the standard urban conveniences.

By the way, school is what you make of it. Test scores aren't always a reflection on the quality of instruction so much as it is on the motavation of the students. Plus if your kids are at all motivated, they'd get into a magnate schoo, and the chicago magnate schools are some of the best public schools in the state.
 

Duke Of Dystopia

Cyburbian
Messages
2,713
Points
24
Re: Re: Re: The Housing Price Paradox

jordanb said:
One of the things you have to remember is that if you live in the city, (depending on your situation) you can usually get rid of your car, which will save a minimum $3000/yr. Many people, I'm sure, end up paying less for housing in the city than they'd be paying for housing+car in the suburbs.

Also, I view it as paying for quality rather than quantity. I'd have a much larger place in the 'burbs for the same money, but it'd be in a tract house in a completly homogenous subdivision. Here, I'm in an 87 year old brick building near the L and the lake, awesome parks, a walkable neighborhood, and all of the standard urban conveniences.
I agree with the amenities part, I wish I had those out here in the burbs. I personaly like the sounds of the city. It is way to quite out here and people watching is a great hoby :)

I don't agree that I would save 3k a year by not having a vehicle. Not having a vehicle is fine if you have no out of city attachments, responsibilities, or job obligations. If you have any of those, a car is a requirement.

Also, what what you would save on a car you would loose to sending your kids to a private school. There is no way in the world I would send my kids to public school in CHI.

I am interested to know where you can find a comparable priced flat, size and price to the burbs. I tried when I first moved to CHI to find such an area but the requirements for my brewing hoby could not be met by anything I was able to find at the time. The reverse commute time and expense to work and back did not pay for itself either.
 

donk

Cyburbian
Messages
6,970
Points
30
I think Canada has a culture to be even more tidy than in the midwest
In southern ontario, this may be true, but definitely not where I live and not in northern ontario.

Here are some examples/observations

1) In southern ontario I worked on a farm as a kid. this farm had nearly every piece of equipment they ever purchased. it was all lined up neatly, mowed between and painted with oil once a year (not a fun job). if you needed a slide cam from a 1948 massey haris bailer they had it and new where it was. Where I live now new machinery is left to rot in the field or woods when it is not working.

2) I think it also has to do with local history. In Ontario much of the land was granted to people in manner that created repsect for the land and its inherent value. nice clean orderly lots. here higgly piggly from the river in any direction.

3) What people use the land for impacts how they treat their properties. Farmers know that the field is going to be needed next year or the year after so better look after it, woods men cut the tree and leave. this could be extended to share croppers vs owners. (southerners vs mid westerners)


Here is an image of the mess in my area remember this is all occurring on a single piece of property 2 acres max in size. the mobile homes are connected with garden hoses for water.
 

donk

Cyburbian
Messages
6,970
Points
30
Road kill. (Raccoon tail I think)

Not my car, one of the other inspectors. That was how scary this place was, we did not even get out of the car.

The gas tank in the truck in front of us, was that trucks gas tank.

I have lots more of these plus the millionaire's junk yard.
 

Duke Of Dystopia

Cyburbian
Messages
2,713
Points
24
Big City's

An interesting note to the subject is that truly huge citys should be handled differently (CHI, NY, LA come to mind). Columbus OH ,Madison WI, and Milwaukee WI has very affordable housing compared to Chicago. I am guessing the same is true for Indianapolis and Cleaveland. You still run into education system problems in them though :(
 

Duke Of Dystopia

Cyburbian
Messages
2,713
Points
24
Nice pics :)

Farmers who own thier land do seem to keep thier stuff in better condition.

You also find a lot of the ramshackle buildings like this in the northern wooded parts of wisconsin. I believe some of this is linked to a lack of money in these economies.

Money is harder to come buy in some places of northern wisconsin than it is in Cabrini Green. The difference being that people in the hinterlands have a much lower cost of living and the barter system helps a lot.

On the flip side, is there really a necessary requiremnt in a rural area to have a more rigid urban standard?
 

jordanb

Cyburbian
Messages
3,232
Points
25
Re: Re: Re: Re: The Housing Price Paradox

Duke Of Dystopia said:
I agree with the amenities part, I wish I had those out here in the burbs. I personaly like the sounds of the city. It is way to quite out here and people watching is a great hoby :)

I don't agree that I would save 3k a year by not having a vehicle. Not having a vehicle is fine if you have no out of city attachments, responsibilities, or job obligations. If you have any of those, a car is a requirement.
It depends on your situation, of course. Most of those things can still be handled without a car. I take Amtrak home to Springfield instead of driving. It's a hell of a lot more comefortable. I know a guy who had a sister in a north western suburb that he'd visit every couple of weeks. He'd ride the L to O'Hare and get a cab from there. The $35 every few weeks was still a hell of a lot cheaper than a car.

Also, Chicago now has a car sharing program, so if you just need a car every once in a while you can sign up for it and pay as you go. It'd get expensive if you used it every day but it works if you only need a car a few times a week.

Many people with jobs in the suburbs can use the Metra to reverse commute. It'd depends on where the office is out there and what sort of connections there are.

I have noticed that most planners here are appearently required to provide their own car for job related driving. I have no idea why you put up with that. Milage compensation rarely if ever pays the true cost of the vehicle. Most municipalites maintain car fleets so their bigshots can drive around on the public dime. There's no good reason for them not to let an employee who actually needs one to do their job use them.

Also, what what you would save on a car you would loose to sending your kids to a private school. There is no way in the world I would send my kids to public school in CHI.
Magnate schools are public schools that students qualify based on performance to go to. They're some of the best schools in the state in terms of test scores, and they don't appear to be lord-of-the-flies dystopias with bizarre rituals that make national news when they are discovered like suburban schools. ;)
 

tsc

Cyburbian
Messages
1,905
Points
23
I somehow managed to get a home in Westchester County 3 years ago...one of the most expensive areas in the NY Metro Area... before houses became totally unattainable on a planners salary with the median price of a home well over $500,000 in this county. Now,,, despite the expense,, homes in our area have been the only good investment, with values increasing over 20% per year. Our house has doubled in value since we purchased it....

Our salaries are much higher than the rest of the state... and probably some of the highest in the country.... what this all means to me,, is that I live in a nest egg.. and my inflated salary is giving me a much better pension. I took a jump of over $20,000 about 5 years ago from a planner job in a depressing upstate/central NY city.

I may live 30 miles north of the NYC border.. but I live on a small lake, 1 mile from the Hudson River, on a 1/2 acre, amoungst forested rolling hills and curvy stonewalled edged roads. I can be at Grand Central Station in less than an hour... I can be at the shore (Jersey for beach) in about an hour too... or head to the Catskill Mountains too.... so.. it ain't that bad around here...and although I haven't been there... I don't think you'll see me moving to Fort Wayne......
 

donk

Cyburbian
Messages
6,970
Points
30
On the flip side, is there really a necessary requiremnt in a rural area to have a more rigid urban standard?
In my area there are almost NO standards once you are outside of an incorporated area. All you need is 1 acre of land and 54 metres of road frontage and go to it.

I think there is a happy medium of regulation of land use and letting people do what they want where they want. The problem comes when the people with no or little common sense (read white trash) are in the majority and see land as a consummable product. Dig a hole and leave it there the land is worth nothi' anyways, cut all teh trees they are what have value, ersoision into the river the tide and current will take care of that, need some sand that dune is doing nothing but blocking our view of the bay.

This sounds far more harsh and negative then it is, you'd have to live here to understand.

I have more images if you want to see what people think is acceptable.
 

mendelman

Unfrozen Caveman Planner
Staff member
Moderator
Messages
12,743
Points
42
The question of Chi school system is really the only sticking point for me, determining whether I will be able to stay in Chicago when we have kids.
 

Wulf9

Member
Messages
923
Points
22
Another thing to consider in housing values. The interest rate drops in the past two year should value out at a 30% increase in house cost. (The same payments can afford a house equal to 130% the price of a 2000 house price). If your housing market has not gone up 30%, your housing has lost value.

The midwest generally has low demand, so prices stay low. The coasts have very high demand, so prices stay high. In Sonoma County (CA) price increases have grown just a little bit more than growth in personal income plus the capitalized value of interest reductions.

Which is a convoluted way of saying that those rapid price rises have been just about equal to "market" forces.
 

de-bug

Member
Messages
15
Points
1
Maybe if you were at a point to cash out on huge housing gains and a pension inflated by inflated salaries, the coasts would be the place to have been.

But if you're just starting out, and that means you've got a lower end salary, probably work for a company that doesn't offer a pension, and can't count on anything in the future from social security....I'd rather be here in the midwest where the housing is cheaper. I just designed and built my own home (not your normal box, either) in downtown, and the monthly payment is only 8.5% of our monthly gross income.

And as for the argument that you can't make as much cash when you sell, well, you just have to know where to buy/build. Out in the burbs there's endless supply, but not so in the central city. Shoot, I just finished building in April, and the spec house next door to me is pending sale for $150,000 more than my cost to build. I think I'll make a tidy profit when the time comes....plus, we'll have been able stuff our retirement accounts full and then some.

I do wonder when people paying those astronomical housing prices will decide it's just not worth it. I've worked in places like Mexico and Spain, and studied in others such as Kenya and Paraguay, and swore I'd never 'come back home' to Indiana. But to my great surprise, it's not that bad.

There's access to a 22 mile bike trail system across the street from me. I walk to the mall downtown for shopping on my lunch break and neighborhood cafes for breakfast on the weekend. Spent last evening listening to a great local band outside of our acclaimed repertory theatre. Not bad at all.
 

Cardinal

Cyburbian
Messages
10,080
Points
34
de-bug makes a good point. When I considered moving to California I figured that it would take 40-45% of my income to afford a decent house, and that would be far smaller, with much less land than I can afford in Wisconsin. Housing right now is about 10% of my salary. I can live more comfortably, enjoy more non-housing extravagances , and save more for retirement. I would rather have liquid assets than have my savings nestegg tied up in the equity of a house I would not want to sell until well after I am retired.
 

Wulf9

Member
Messages
923
Points
22
Just hope that California retirees don't discover what a nice place the midwest truly is. Otherwise, you will find a lemming-like infusion of Californians with their jeans stuffed with housing profit cash. Then your housing investment will skyrocket and your children will move to some other low-cost area when they buy their first house.

Of course, you have snow, which will be a great disincentive to Californians. Have you ever watched Californians drive in snow? They don't realize that braking traction is the same on a four wheel drive Hummer as it is on a two wheel drive Civic.
 

donk

Cyburbian
Messages
6,970
Points
30
I will hop on the small house payment, larger disposable income band wagon. I could have bought a lot more house, but chose a smaller less expensive house with character instead. The only problem is that it is going to take me longer to sell (when I bought it it had been on the market for 2 years)

I currently owe less on my house then most people make as a single mortgage payment. Only 9 more payments and I own my house out right.
 

Mud Princess

Cyburbian
Messages
4,896
Points
27
Wulf9 said:
Just hope that California retirees don't discover what a nice place the midwest truly is. Otherwise, you will find a lemming-like infusion of Californians with their jeans stuffed with housing profit cash. Then your housing investment will skyrocket and your children will move to some other low-cost area when they buy their first house.
Californians have already taken over in Washington State, at least in the Seattle area. We thought about relocating there at one point but the high housing costs were a huge deterrent.

On the east coast, it's New Yorkers driving up the cost of housing. I read an article the other day that gave the median housing price at $570,000 in Westchester County and around $350,000 in Rockland County. As people in those areas can no longer afford to buy a house, they start moving to outlying counties... Orange County was the fastest growing county in the state from 1990 to 2000. Now it's hard to find a house under $200k there.
 

tsc

Cyburbian
Messages
1,905
Points
23
Mud Princess said:
Californians have already taken over in Washington State, at least in the Seattle area. We thought about relocating there at one point but the high housing costs were a huge deterrent.

On the east coast, it's New Yorkers driving up the cost of housing. I read an article the other day that gave the median housing price at $570,000 in Westchester County and around $350,000 in Rockland County. As people in those areas can no longer afford to buy a house, they start moving to outlying counties... Orange County was the fastest growing county in the state from 1990 to 2000. Now it's hard to find a house under $200k there.
as we say... affordable housing in Westchester County is found in Dutchess County....(2 counties away) and Dutchess County says affordable housing is found in Orange.... a definate ripple effect!

It is the price we pay to live near NYC... and if you like the city/urban area... it is a great place and our traffic really isnt bad.. I commute 30 miles in about 40-45 minutes...door to door. The geography and culture that surrounds you.. is almost hard to put a dollar value on. I put a high value on the quality of life issues...character of area and such... and I really enjoy the area for what it is.
 

Mud Princess

Cyburbian
Messages
4,896
Points
27
ts corbitt said:
as we say... affordable housing in Westchester County is found in Dutchess County....(2 counties away) and Dutchess County says affordable housing is found in Orange.... a definate ripple effect!

It is the price we pay to live near NYC... and if you like the city/urban area... it is a great place and our traffic really isnt bad.. I commute 30 miles in about 40-45 minutes...door to door. The geography and culture that surrounds you.. is almost hard to put a dollar value on. I put a high value on the quality of life issues...character of area and such... and I really enjoy the area for what it is.
The high cost of housing has had a huge impact on the labor market in Rockland. It's become an economic development issue. Companies can't find workers unless they bus them in from somewhere else.
 

donk

Cyburbian
Messages
6,970
Points
30
Companies can't find workers unless they bus them in from somewhere else.
Where do the people who make minimum wage live in these communities?

What about "pink" collar workers for other businesses?
 

jresta

Cyburbian
Messages
1,474
Points
23
I grew up in the New York Metro area. Just north of Asbury Park , NJ(which by the way is undergoing a DPZ led revitalization project). The last place I lived in that area was Bradley Beach. In 1997 you could a 3 bedroom bungalow in decent shape - 2 blocks from the train, 3 blocks from the beach- for about $150k. Now the cheapest thing going is $300k.

Monmouth County has been completely invaded by Staten Islanders. Couple the invasion with the fact that a lot of people were simply buying houses to use seasonally and it's a serious problem. I wrote extensively in school about what i dubbed the "summer-rental effect" where locals can't afford housing because there's an artificial scarcity created by this summer-time market. So they rent nice Victorians and Queen Anne's in the winter and for the other 4 months a year they live in motels.

Three of the four poorest towns in NJ are beach towns - Wildwood, Seaside Heights, Camden, and Asbury Park round out the top 4 in that order.

So right, I was not only gentrified out of my own town but out of the entire county. There is nothing for sale, not even in the worst shape in the the worst neighborhoods that is going for under $110k.

So i settled in the Philly metro where housing prices are 10 to 15 years behind those in the New York metro but i'm getting the feeling that if i don't buy a house soon i'll be moving to Baltimore in a few years.

P.S. - people who live at the "shore" don't call it the "shore". We call it the beach. Using the term "shore", particularly when you're already there, is a way the locals identify the "bennies". In the early 90's when the influx first started the bumper stickers "Bennies Go Home" and "The Parkway north - use it" were quite popular.
 

jresta

Cyburbian
Messages
1,474
Points
23
As an example
I bought this house with my ex exactly two years ago for $64,500
- she's selling it for almost twice that now. Other people wrinkled their noses about the town but I knew it was on it's way up when we were looking. I just had no idea it would double that quickly.

http://www.realtor.com/Prop/1029450030

It's the one on the right. 5 minute walk to the train (PATCO) and a 12 minute ride to Center City. 1/2 a block from the Main St. with just about everything one could ask for within 2 blocks.
 

Mud Princess

Cyburbian
Messages
4,896
Points
27
donk said:
Where do the people who make minimum wage live in these communities?

What about "pink" collar workers for other businesses?
Good question. I think some live in rentals in the few low/mod income villages in Rockland County that have not been "discovered" yet... others live in New Jersey or New York City and commute.

As jresta points out, New Jersey is getting more expensive too. I had a friend in grad school who did a paper on Asbury Park. It was very rundown then (late 1980s). Perhaps it's only a matter of time before it gets gentrified.

Jresta: Tell us more about the Philly metro housing market.
 

H

Cyburbian
Messages
2,850
Points
24
donk said:
I currently owe less on my house then most people make as a single mortgage payment. Only 9 more payments and I own my house out right.
Good for you. With the current refi bonanza over the last year with 5% rates, and everybody cashing out there 80% appraisal value I don’t know how this will come back to bite us in the butt. The baby boomers’ parents’ gen owned their homes, so when they passed the children received a ‘owned’ home, sold it and split up the money. Today, when boomers pass the children will receive a home purchased (ATL market example) at 100k in the 70s and refinanced at 400k in the 00s. The market will flood with overpriced ranch homes, and few buyers in the price range. The children won’t be able the make the Mtg payment and the foreclosure rate will soar.

This above example is an extreme case, but the phenomenon of boomers cashing out in the last few years is out of control. What implications is this going to have on the market in 10-15 years when the gen starts to retire and move or begin to pass?
 

donk

Cyburbian
Messages
6,970
Points
30
Mine is at the opposite end of the scale, the worst house (smallest and needs lots of TLC) in the worst neighbourhood.

When I was house hunting the real estate agent did not understand why all I wanted to look at was the oldest homes that needed the most work. I told her I did not want the responsibility of having to furnish a house that i only would use 3 rooms in and that I had better things to do with my money than make house payments.

For those interested my house is in my gallery.
 
Top