My last post took a hometown look at the variation in the distribution of troubled housing. In this post, we'll zoom outward for a national view.
Based upon
population data of top 100 U.S. cities, I selected three pairs of very similar-sized cities:
* Atlanta (population 519,145) and Albuquerque (population 518,271)
* Miami (population 409,719) and Omaha (population 424,482)
* Las Vegas (population 558,880) and Louisville (population 557,789)
I then went to the
Realtor.com site and looked up the total number of units for sale in each city, in each of three categories:
* Single family homes
* Condominiums
* Multi-family homes
The
data are charted above. Note that the total number of units for sale in
Atlanta, Miami, and Las Vegas are large multiples of the number for
sale in Albuquerque, Omaha, and Louisville. As we saw in the prior
post, the formerly hottest real estate markets are the ones with the
greatest inventories. Those, to be sure, are also the markets that have
seen the largest price drops. Observe, however, that--even after these
drops--they continue to sport monster inventories. It is difficult to
imagine that the housing crisis is near an end in these areas.
Also
note the differences of the distributions among the various units.
Condominiums comprise well over half the total inventory in Miami and
about a third of the inventory in Atlanta. In Albuquerque, Omaha, and
Louisville, condos are a significantly smaller share of the inventory.
It appears that condominium speculation is a good part of the housing
bubble, but not the whole thing. Las Vegas, for instance, simply has a
glut of single family homes--more than 3x the number for sale as in
Louisville.
Once again, it's the lumpiness of the data--the
extreme variation--that characterizes this housing crisis. It's not
that the general housing market is in decline. Rather, some areas are
soft and others are wildly overbuilt, to the point where it is
difficult to see how they will be sold. Are more than 37,000 households
likely to move into Miami--a city of a little over 400,000 people--in
the foreseeable future, particularly when they'd be buying into a
falling market and finding it difficult to get financing? There are
many, from builders to banks, that are hoping the answer is yes. For my
part, I'll cast my lot with Omaha.
