Julius Probst It directed me to this interesting map:
When looking at a graph, I often find it useful to consider more than one factor. In this case, I see evidence of three independent things at work:
1. Congested areas are more expensive.
2. Fast-growing areas are more expensive.
3. Highly regulated areas are more expensive.
Let’s consider these one at a time. California and the northeast corridor (DC to Boston) are both well above average in terms of median home prices. But there are other anomalies, such as the general values above in the large western mountain area. Even sparsely populated states like Nevada and Montana are more expensive, at least compared to midwestern states like Illinois, Michigan and Ohio, which are more populous.
In recent years, the mountain west has experienced significant population growth, while the industrial midwest has experienced a stagnant population. This probably explains why the sparsely populated west is more expensive than the midwest, as well as the other two favorable states, such as Texas/Oklahoma, Tennessee/Kentucky, and Georgia/Alabama, where in each case the fastest growing situation is higher. it is expensive.
However, even in this case, there is something mysterious. Some of America’s fastest population growth is now occurring in the southeast (Florida to the Carolinas), Texas and Tennessee. And yet these regions are still much cheaper than the mountain west, without the dense population. What explains that difference?
I suspect that the barriers to building are tight in many parts of the western mountain. This may reflect in part different attitudes toward zoning, but also the fact that much of the western world is owned by the federal government. Even cities like Las Vegas and Phoenix, which seem to have unlimited land on their borders, have been replaced by government-owned land or Indian reservations.
It is widely known that California law increases the cost of housing, and this drives people to look for places with a lower cost of living. Because the mountain west is growing at such a good clip, one might be tempted to think that these states don’t face the same problems as California. But the fact that places like Colorado, Utah, Montana and Washington are more expensive than Texas or the Carolinas leads me to believe that housing policies in the western states are slowing population growth. Many young Americans are likely to choose Charlotte, Nashville or Jacksonville over places like Denver, Salt Lake City or Seattle not because they like those places, but rather because housing costs make the place they want prohibitively expensive. In a free market where the federal government sells its land, I suspect the mountain west will grow faster than Texas and the southeast.
PS. The mountain west may also have newer housing than the midwest, which may explain part of the difference.