towns that offer the most jobs per dollar of house

[jayrandom]

Originally Posted by panchilly

Update from 2 years later.

WOW have you seen the prices in Framingham ? I called in this post as it was clear as day in the data. Also i think we were at peak urban 2 years ago.

Originally Posted by panchilly

This is tricky data to obtain, but probably the best data we have is to use the zillow home value index which normalizes for size/quality of house, etc.

Take a look at some towns in the area for YOY gains in the zillow home value index. Somerville up 8% but Acton is up 17%. Framingham up 16+%. Natick is up 11%

Many towns further out beyond 495 are up even more. It's hard to thoroughly analyze this data without writing a web scraper to pull all of MA down then generate a heatmap, but spot checking the data seems to show a clear shift outward in appreciation.

I think it makes sense as the huge influx of full remote and hybrid remote reduces your average commute times substantially which increases the radius that you would consider for a home purchase. 2 or 3 days a week of WFH could shift your radius by 10 miles or more. I suggest that you read up on marchetti's constant and how urban areas have grown as a reaction to transportation technology. Hybrid & full remote is another step function that will widen the urban area. Further out areas are now "in play" due to remote expectations and to be honest, they got a bit too cheap as the last boom was focused mostly in the urban core, also there are demographic headwinds.

Your prediction was that cities and towns that had large numbers of jobs relative to their housing price would see greater appreciation. You are demonstrating that towns that are further away from the urban core have seen greater appreciation. I don't think this counts as "calling it".

I would also argue against saying anything is "as clear as day in the data". Something cannot be both clear as day and too tricky to actually show. Too many times people say something is obvious when really they mean "My gut tells me this is true but I have no way of proving it". You are positing a causational relationship and can't be bothered to even show correlation. I'm not faulting you for your lack of evidence (this is at best a hobby for all of us), I am simply challenging your assertion that it's obvious what you predicted came to pass.

[MikePRU]

Originally Posted by jayrandom

I didn't see this thread years ago, but do you have data saying Framingham did better relative to the market as a whole. Stock pickers judge themselves against the sector and sports bettors judge themselves against the line.

As an aesthetic note for future reference, you should start trimming your precision. I doubt you have twenty significant figures and including all those digits makes your tables unreadable.

That was my first thought as well . . . real estate is up everywhere. The statement lacks context.

Originally Posted by panchilly

This is tricky data to obtain, but probably the best data we have is to use the zillow home value index which normalizes for size/quality of house, etc.

Take a look at some towns in the area for YOY gains in the zillow home value index. Somerville up 8% but Acton is up 17%. Framingham up 16+%. Natick is up 11%

Using data from Zillow's website assumes it's accurate and anyone in the real estate industry will tell you that's a BOLD assumption.

Originally Posted by panchilly

Many towns further out beyond 495 are up even more. It's hard to thoroughly analyze this data without writing a web scraper to pull all of MA down then generate a heatmap, but spot checking the data seems to show a clear shift outward in appreciation.

I think it makes sense as the huge influx of full remote and hybrid remote reduces your average commute times substantially which increases the radius that you would consider for a home purchase. 2 or 3 days a week of WFH could shift your radius by 10 miles or more. I suggest that you read up on marchetti's constant and how urban areas have grown as a reaction to transportation technology. Hybrid & full remote is another step function that will widen the urban area. Further out areas are now "in play" due to remote expectations and to be honest, they got a bit too cheap as the last boom was focused mostly in the urban core, also there are demographic headwinds.

Again . . . I think this needs some context. The values in Framingham were hit pretty hard in the downturn of 2008 and remained in the dumps for a time period that extended further than some neighboring towns. So, it would make sense that Framingham would have more "runway" in front of it than some of it's neighbors. I would love to see a chart of median value in multiple towns around Framingham over an extended time period (10-20 years) to give the appreciation Framingham is seeing some real context and to truly judge the performance of real estate in that town.

[mdovell]

It's a interesting concept but you also have to factor in the compensation for jobs and the qualifications. Keep in mind some employers still don't disclosed pay as odd as that is. CT just passed a law that if you request it they must tell you. I just networked to try to find pay on a position it seemed ok but then when I did a real request it was much lower (15-20%!).

There are plenty of urban areas that have jobs but most of this is in competitive low wage low skill. Dollar stores, barber shops, hair salons, nail salons, low end service restaurants etc. The logic reminds me of people bragging that in Texas maybe someone that dropped out of high school and had a drug problem can afford and apartment.

[panchilly]

Originally Posted by jayrandom

Your prediction was that cities and towns that had large numbers of jobs relative to their housing price would see greater appreciation. You are demonstrating that towns that are further away from the urban core have seen greater appreciation. I don't think this counts as "calling it".

I would also argue against saying anything is "as clear as day in the data". Something cannot be both clear as day and too tricky to actually show. Too many times people say something is obvious when really they mean "My gut tells me this is true but I have no way of proving it". You are positing a causational relationship and can't be bothered to even show correlation. I'm not faulting you for your lack of evidence (this is at best a hobby for all of us), I am simply challenging your assertion that it's obvious what you predicted came to pass.

What has happened is the definition of "commutable" has shifted to a larger radius due to hybrid & full remote so that is skewing appreciation to the outlying areas. I called the shift toward more suburban areas and even posted about "peak urban" but honestly i didn't think it would be THIS dramatic. I am blown away by how strong of a shift there is.

Have you actually looked at the zillow market index for these towns? It is a clear as day trend toward the outlying areas.

[jayrandom]

Originally Posted by panchilly

What has happened is the definition of "commutable" has shifted to a larger radius due to hybrid & full remote so that is skewing appreciation to the outlying areas. I called the shift toward more suburban areas and even posted about "peak urban" but honestly i didn't think it would be THIS dramatic. I am blown away by how strong of a shift there is.

Have you actually looked at the zillow market index for these towns? It is a clear as day trend toward the outlying areas.

Originally Posted by panchilly

Here are the results of https://github.com/panchilly/ma-jobs-analyzer

sorted in descending order of commutable jobs per dollar of SFH.

The price data was taken from that boston globe article https://github.com/panchilly/ma-jobs...rices_2018.csv

I would expect the top towns in this list to be among the better investments, particularly any of the ones that also have acceptable schools (e.g. 5 or higher)

I think it's clear that there has been a shift outward. What we are disagreeing about is that you "called it" in 2019. Your prediction in bold above was not that there would be a general outward shift due to a global pandemic changing who can and does work from home (a prediction that would likely have required time travel). It was that a certain set of lower-priced towns would appreciate because of high job availability nearby.

[panchilly]

Originally Posted by jayrandom

I think it's clear that there has been a shift outward. What we are disagreeing about is that you "called it" in 2019. Your prediction in bold above was not that there would be a general outward shift due to a global pandemic changing who can and does work from home (a prediction that would likely have required time travel). It was that a certain set of lower-priced towns would appreciate because of high job availability nearby.

I think my prediction was pretty solid. Take a look at the towns in the list, they out performed. Look at the zillow index.

[Shrewsburried]

As suggested by MikePRU, a number of those 'out perform' towns listed where absolutely hammered in the '08 recession; i.e., I think it's a rather large assumption to say they were driven by your selected metrics versus, say, towns like Framingham, Marlborough, Hudson, Lowell, Maynard, etc. being valuation laggards ... as the lower tier towns tend to be.

[mdovell]

You can be right but right for the wrong reasons. I recently had a fiesty debate with some auto salesman who tried to argue that cars are going up in price. Not really. If you mean with inflation of course the average new car today is going to be worth more than a car decades ago but that's because of inflation and the increase of technology. A car from the 80's isn't going to have satellite radio, a 70's one isn't going to have a GPS, a 40's one might not have seatbelts etc. After you buy a car the price drops by about 30% in the first year. Eventually it reaches a plateau.

The other aspect within this is frankly if there is an expansion in transit or road improvements that can significant expand job opportunities.

[MikePRU]

Originally Posted by panchilly

What has happened is the definition of "commutable" has shifted to a larger radius due to hybrid & full remote so that is skewing appreciation to the outlying areas. I called the shift toward more suburban areas and even posted about "peak urban" but honestly i didn't think it would be THIS dramatic. I am blown away by how strong of a shift there is.

Have you actually looked at the zillow market index for these towns? It is a clear as day trend toward the outlying areas.

My guess is like most other trends in real estate that this will become cyclical. One day the suburbs will be popular and another day living in the city will be popular.

Originally Posted by mdovell

You can be right but right for the wrong reasons. I recently had a fiesty debate with some auto salesman who tried to argue that cars are going up in price. Not really. If you mean with inflation of course the average new car today is going to be worth more than a car decades ago but that's because of inflation and the increase of technology. A car from the 80's isn't going to have satellite radio, a 70's one isn't going to have a GPS, a 40's one might not have seatbelts etc. After you buy a car the price drops by about 30% in the first year. Eventually it reaches a plateau.

The other aspect within this is frankly if there is an expansion in transit or road improvements that can significant expand job opportunities.

I'm going to guess that Panchilly did not predict that there would be a global pandemic that pushed city dwellers to value amenities in their home more than the amenities of the neighborhood. This combined with an increased opportunities to work from home are both what is driving the market. My feeling is this wouldn't be happening without both conditions. If there were just an increased opportunity to work from home, I think a lot of my new suburban neighbors would still be living in the city.