Ohio Big C's Affordability Comparison (Columbus, Whitehall: to rent, house prices, job market)

[HueysBack]

Clearly Ohio - in general - is very affordable relative to the rest of the nation (which is why we moved here). I was working on a related project and thought I'd share these charts.

This is a relational comparison between House Prices and Per Capita Income at the MSA level. Values are scaled to 100 and leveled out 06/2009 (end of recession).

Blue Line = All-Transactions House Price Index for MSA
Red Line = Per Capita Personal Income in MSA

Now, this data doesn't tell the whole story (obviously) when it comes to affordability. However, it does compare the growth patterns between house prices and income. You can see that in all three (CLE, CBUS & CIN) income growth outpaced the housing markets early rebound. In CLE & CIN income continues to grow in tandem with house prices. That, to me, shows continued affordability. In CBUS, however, growth in housing prices are beginning to outpace income. To me, that shows it becoming less affordable.

Source data came from: https://fred.stlouisfed.org

CLE - CBUS - CIN
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I'll also include a few other cities for a broader comparison

PIT - DAL - SEA
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[jbcmh81]

In Columbus' case, it just isn't building enough housing to keep up with the demand. In the city, things like outdated zoning codes, NIMBYism, financing problems and small-time developers are consistently keeping construction much lower than it should be, and many of the projects getting built are undersized. The only positive to this has been that neighborhoods/inner suburbs that had been in long-term decline or stagnation, like Linden, Franklinton, Whitehall, and the Near South Side, have been making strong comebacks as people look for housing. There are now almost no Columbus-area neighborhoods that are seeing declines now. In the meantime, though, housing prices are rising rapidly.
Even out in the suburbs, construction is way off from where it was in the mid-2000s.


The charts also show something else- the South and West really aren't affordable anymore, but continue to see strong population growth. Perhaps there is a limit that starts to reverse that phenomenon, but it suggests that Columbus will not necessarily see population growth fall even if it ultimately becomes less affordable. As long as people see value in these places, they will continue to move there.

[ferraris]

June 2009 as a baseline is an interesting choice. I like this from a stats nerd perspective, but I think if someone just wants to find out about "affordability", then the ratio of home prices to income would be more useful.

Obviously taxes and other things come into play, but base home price is probably the biggest single factor in regards to livability.

[mshultz]

Yes, Ohio is very affordable compared to the rest of the nation. The affordability studies do not look at all of the various costs:

No automobile personal property taxes
No automobile inspections
No E-Check for most of the state
No estate tax or inheritance tax
Vanguard has an Ohio Municipal Bond fund that is free from federal, state, city, and school district income taxes for Ohio residents

These extra costs really start to add up. The states that do not have income taxes are making it up with other taxes.

[HueysBack]

Originally Posted by mshultz

Yes, Ohio is very affordable compared to the rest of the nation. The affordability studies do not look at all of the various costs:

No automobile personal property taxes
No automobile inspections
No E-Check for most of the state
No estate tax or inheritance tax
Vanguard has an Ohio Municipal Bond fund that is free from federal, state, city, and school district income taxes for Ohio residents

These extra costs really start to add up. The states that do not have income taxes are making it up with other taxes.

All good points!

Originally Posted by ferraris

June 2009 as a baseline is an interesting choice. I like this from a stats nerd perspective, but I think if someone just wants to find out about "affordability", then the ratio of home prices to income would be more useful.

Obviously taxes and other things come into play, but base home price is probably the biggest single factor in regards to livability.

You're correct. I've graphed those stats as well but I really wanted to see the direction cities were trending in the context of income growth to housing price growth. In the larger context of a metro population, base home price really does tell the story. Especially, for the working and middle class. But if income growth is outpacing housing price growth that is a good signal of overall rising affluence. I think Pittsburgh is showing healthy gains in both departments. Eventually, we'd want to see housing prices plateau while income continues to climb. I've attached more charts below... look at Denver and Austin in particular. Looks very troublesome. Interestingly, San Francisco (which I didn't include) is commonly considered the MOST unaffordable city. However, it's graph looks more like Pittsburgh's than Denver or Dallas's, showing that incomes are rising at a relative pace to housing.

Again, to your point though, this doesn't mean it's "affordable". Especially, for the generational citizenry. Getting priced out is a very real thing (that I know far too much about ).

Originally Posted by jbcmh81

There are now almost no Columbus-area neighborhoods that are seeing declines now. In the meantime, though, housing prices are rising rapidly.
Even out in the suburbs, construction is way off from where it was in the mid-2000s.

It will be interesting to see how CBUS reacts. Hoping they continue towards urbanization instead of sprawl.

Originally Posted by jbcmh81

The charts also show something else- the South and West really aren't affordable anymore, but continue to see strong population growth. Perhaps there is a limit that starts to reverse that phenomenon, but it suggests that Columbus will not necessarily see population growth fall even if it ultimately becomes less affordable. As long as people see value in these places, they will continue to move there.

Yeah.. like I said above, "affordability" is relative to income growth and housing expectations. For the person seeking to raise a family in their childhood neighborhood, in one of these high growth areas, it's a very sad situation. My mother bought our house for just above 100k. Today, if I wanted to buy into that neighborhood, the median price is 650k. Forget affordability, that just isn't right.

Yet for the person seeking to rent in a newly gentrified area - and who has enough skillsets to be competitive in the job market - affordability isn't really a problem in most markets. So yes, CBUS will likely continue to grow and also gentrify. The question becomes where do poor, working and middle class folks go when their urban neighborhoods get gentrified and yet the suburbs are full of expensive SFH's? In the Bay Area, many are being forced out to Stockton and other dumpy areas with atrocious commutes.

Check out some more cities. Denver is OUT-OF-CONTROL!

ATL - CHARLOTTE - RALEIGH
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DEN - AUSTIN - POR
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EDIT: Sorry, Portland's graph is wrong. Housing is the red line and Income is the blue.

[woxyroxme]

It’s not the 3 C’s that have the affordable housing, with these prices you can own for much less than you could ever rent where I live.

You want to buy a house but you deliver pizza for a living? Click below.

https://www.foxbusiness.com/features...port-finds.amp