This page has been archived and commenting is disabled.

Charting The Exponential Distribution Of Home Prices In The US By Market Area

Tyler Durden's picture





 

On one end, you have the destruction left over from the extinction of US auto manufacturing. On the other end, you have PIMCO. And inbetween the two, there are 294 home markets, which make up the exponential curve of US real estate prices. It is not surprising that the non-normal distribution in home prices follows quite closely the Talebian extremistan distributions expected (even though the last word is an oxymoron in this context) out of modern day markets. We wonder which end of the curve the President has got his eyes focused most on these days for "excess efficiency" retention purposes.

According to the latest Coldwell Banker home listing report (link), the richest people in America reside in the following cities, which boast the following average home prices:

1.Newport Beach - $1,826,348
2.Palo Alto - $1,479,227
3.Rye - $1,325,500
4.San Francisco - $1,325,103
5.La Jolla - $1,210,300
6.Greenwich - $1,195,614
7.Wellesley - $1,080,458
8.Pasadena - $1,043,683
9.Honolulu - $1,026,821
10. Santa Barbara - $1,024,661

Alas for every market boasting an average home price over $1MM (ten of them), there are citis on the other end of the spectrum. And using the completely arbitrary cut off metric of $250,000, there are 145 markets whose homes cost less than that particular magic number, lef by the following:

1.Detroit - $68,007
2.Grayling - $84,625
3.Sioux City - $85,967
4.Cleveland - $87,240
5.Muncie - $100,314
6.Norfolk - $107,814
7.Kansas City - $112,449
8.Canton - $114,325
9.Port Huron - $116,267
10. Topeka - $116,343

At least Detroit is at the top of something. As is the broke state of California - with 6 of the 10 most expensive markets residing in the Golden State. We dread to think what will happen once the state's broke administrators realize how much wealth could be extracted from local housing if only they could collect a liiiittle bit of the net worth of each home (assuming said home is not already underwater on the debt it is pledged to).

 

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 09/22/2010 - 21:09 | Link to Comment Buck Johnson
Buck Johnson's picture

You are correct and the blog is also.  The shadow inventory is slowly coming onto the market and eventually it will just fall on the market and we will see housed fall drastically in price.

Thu, 09/23/2010 - 11:31 | Link to Comment oklaboy
oklaboy's picture

great link, and thanks. I read DrHB alot, his stuff is right on. Coming to allllll the special neighborhoods near you!! 

Wed, 09/22/2010 - 18:47 | Link to Comment mynhair
mynhair's picture

Wow.  Thought Santa Barbara would score higher.  Nice access to the Channel Islands.  Well, same with Newport.

Excise taxes, bitchez!

 

Wed, 09/22/2010 - 21:09 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Is it a coincidence that Newport Beach is at the top and Bill Gross recently moved to Newport Beach? Maybe it was him that pushed them over the top?

BTW, I'm officially calling him "Sneak Peak" Bill Gross from now on since he's all but admitted to getting a sneak peak of FED data and opinions. 

Wed, 09/22/2010 - 22:40 | Link to Comment Misstrial
Misstrial's picture

Bill Gross has lived in Newport Beach for some time; only recently he and his wife purchased a  home larger than the previous.

Don't forget that Donald Bren lives in Newport Beach (spec Newport Coast) along with some of the Irvines.

~Misstrial

Wed, 09/22/2010 - 22:49 | Link to Comment Misstrial
Misstrial's picture

mynhair:

Not junked by me; nonetheless, the big money is in neighboring Montecito (93108/9).

Newport is not close to the Channel Islands. Maybe you're thinking of Catalina Island.

~Misstrial

Wed, 09/22/2010 - 19:09 | Link to Comment max2205
max2205's picture

Can you post a chart that I can see. It's blurry

Wed, 09/22/2010 - 19:18 | Link to Comment Lux Fiat
Lux Fiat's picture

Try opening the chart in a new tab or window to see a larger version than in the post.

Wed, 09/22/2010 - 19:19 | Link to Comment faustian bargain
faustian bargain's picture

or, click on the link to see the full list of 296 markets.

Wed, 09/22/2010 - 19:51 | Link to Comment max2205
max2205's picture

Thx but I'll try it on my pc. Freaking iPhone

Thu, 09/23/2010 - 09:39 | Link to Comment Lux Fiat
Lux Fiat's picture

Yes, I am waiting for a phone that can do a holographic heads up display onto thin air.  Surfing ZH and other sites on the cell phone while out and about leaves something to be desired.

Wed, 09/22/2010 - 19:40 | Link to Comment ziggy59
ziggy59's picture

its BS...no hamptons made the cut?

 

please, with the most expensive real estate deals in the cuntry?  

keeping below the radar?

 

 

Wed, 09/22/2010 - 20:20 | Link to Comment Mercury
Mercury's picture

You know, I've always wondered: Given that a place like Southampton A) doesn't have that big of a year-round population and B) has plenty hefty property taxes on all that fancy real estste - what the hell do they do with all that money?  I mean, after you build electric-everything public schools and give Range Rovers to the cops there still has to be enough money left over for a medium sized space program...

They probably gave it to Bernie Madoff.

Wed, 09/22/2010 - 19:49 | Link to Comment Carl Marks
Carl Marks's picture

Wait until the reds seize the wealth and redistribute it to the 90% of people in the U.S. who are unfit for a modern society.

Wed, 09/22/2010 - 22:24 | Link to Comment Seer
Seer's picture

You've been deemed unfit for a modern society.  Sorry, but you'll have to go.  It's for the good of humanity- to rid ourselves of self-righteous people, don't ya know?

Thu, 09/23/2010 - 11:02 | Link to Comment Reductio ad Absurdum
Reductio ad Absurdum's picture

No, Seer, brainwashed people like you need to go. You're killing off the human race with your "I'm OK you're OK" bullshit.

Wed, 09/22/2010 - 19:54 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Money can be a blinding thing.

Wed, 09/22/2010 - 20:15 | Link to Comment Mercury
Mercury's picture

The Exponential Distribution Of Home Prices?   I'm not so sure this is a particularly new phenomenon.  Although the spread is probably wider than ever.  Once cross country travel and ethnic/cultural segregation are no longer big issues, it's all about money...and rich people want to be near other rich people. On the other end of the scale - people who have the wherewithal to get the hell out of places like Detroit usually do.

So, yeah...location, location, location.

This, in a nutshell is why pushing home ownership on as many Americans as physically possible didn't have the desired wealth-building effects.

Thu, 09/23/2010 - 11:07 | Link to Comment Reductio ad Absurdum
Reductio ad Absurdum's picture

The chart is NOT a distribution; it's merely a listing of different home prices from different regions of the country. To be a distribution it would have to be a histogram where the total number of houses for sale in each price range was accounted for.

Wed, 09/22/2010 - 20:01 | Link to Comment deadparrot
deadparrot's picture

I shudder to think of the ramifications of abolishing Prop 13. I'd still love to see it happen.

Wed, 09/22/2010 - 20:40 | Link to Comment Mercury
Mercury's picture

To punish people who have bought real estate with their money or because municipal governments aren't quite big enough yet?

Thu, 09/23/2010 - 11:13 | Link to Comment Reductio ad Absurdum
Reductio ad Absurdum's picture

Seriously, what kind of an idiot is against Prop 13.? The whole point of Prop. 13 was to reduce the size of government by reducing the amount of money it gets -- starving the beast. Yet Californians wanted it both ways: big government and small taxes. They need to go back to the original goal of Prop. 13 and reduce the size of their government. Repealing Prop. 13 just leads down the primrose path towards government control of people's lives. Haven't you read "1984" or "Brave New World"? Or did the government ban those books from school?

Wed, 09/22/2010 - 20:40 | Link to Comment Pillgrimm
Pillgrimm's picture

Homes sold in California pick up the sale price as the new tax basis. New buyers don't get a break. Prop 13 would protect a property that was inherited, but that's not what we are talking about. Lets face it, even if there was a windfall with a Prop 13 repeal, the revenue would be squandered and never used to pay off old debt. It would be used to lever new debt.

Wed, 09/22/2010 - 20:04 | Link to Comment aheady
aheady's picture

Is that Norfolk, Virginia? Ack.

Wed, 09/22/2010 - 20:29 | Link to Comment trav7777
trav7777's picture

property taxes are a relatively untapped source of gov't "income."

Seems inevitable that they will begin taxing anything they know about.  Is it their problem if you're underwater?

Wed, 09/22/2010 - 20:40 | Link to Comment Atomizer
Atomizer's picture

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

--  Ronald Reagan

Wed, 09/22/2010 - 22:28 | Link to Comment Seer
Seer's picture

Reagan and Co should have known, they were the next booster phase of this insanity...

And that dick-head Gingrich.  I mean, that guy was hauling in more pig feed than any other district except the viper den of DC.

Thu, 09/23/2010 - 11:16 | Link to Comment Reductio ad Absurdum
Reductio ad Absurdum's picture

Seer, you are at the wrong website.

Wed, 09/22/2010 - 20:48 | Link to Comment docj
docj's picture

Frankly, I wouldn't care if they taxed Wellesley (MA, I assume) into extinction.

Wed, 09/22/2010 - 21:00 | Link to Comment Implicit simplicit
Implicit simplicit's picture

Must be from Needham;>}

Wed, 09/22/2010 - 21:08 | Link to Comment Implicit simplicit
Implicit simplicit's picture

Max, you need the new maxi-pad.

 

Ended under wrong reply person. dam it!

Wed, 09/22/2010 - 21:17 | Link to Comment Not For Reuse
Not For Reuse's picture

shit, it's blood in the str33tz dude,,,i'll buy detroit...as long as it's with someone else capital

Wed, 09/22/2010 - 21:48 | Link to Comment buzzsaw99
buzzsaw99's picture

seems a piti

Wed, 09/22/2010 - 21:52 | Link to Comment Miles Kendig
Miles Kendig's picture

Location  Location  Location

Wed, 09/22/2010 - 21:56 | Link to Comment fearsomepirate
fearsomepirate's picture

The extinction of US auto manufacturing?  The Toyota plant 15 minutes from here says hi.  China and Japan make more than us, but we still made over 5 million cars last year.

Wed, 09/22/2010 - 22:09 | Link to Comment MikeyKid
MikeyKid's picture

We should sell CA on the open market, throw in the boats as a bonus.

 

Wed, 09/22/2010 - 22:32 | Link to Comment Seer
Seer's picture

Hm... I wonder what affect that this would have on non-Californian's food prices?

Wed, 09/22/2010 - 23:21 | Link to Comment rosiescenario
rosiescenario's picture

...yes...most folks are clueless about CA ag business and how much the entire country depends upon it. In fact most of the population within CA is also clueless about the ag business here. For example, without CA you better get used to a non-tomato based ketchup or spaghetti sauce.

Maybe we should just slap an export tax on all the food leaving our state and headed East....we could balance our budget pronto.

Thu, 09/23/2010 - 08:35 | Link to Comment pan-the-ist
pan-the-ist's picture

They'd find a way to make better tomatos --out of corn.  They only reason they haven't done that yet is to keep more Kalifornians employed.  You don't feed the country, now go back to sleep.

Thu, 09/23/2010 - 10:04 | Link to Comment Ludic Fallacy
Ludic Fallacy's picture

Maybe we should just slap an export tax on all the food leaving our state and headed East....we could balance our budget pronto.

 

Thankfully that'll never happen.  That's precisely what the inter-state commerce clause in the Constitution was intended for. 

Thu, 09/23/2010 - 00:08 | Link to Comment williambanzai7
williambanzai7's picture

You left Rye out but kept Staten Island on the curve.

Good call

SUBPRIME DOWNHILL

http://williambanzai7.blogspot.com/2010/09/subprime-downhill.html

DATA FACTOID

http://williambanzai7.blogspot.com/2010/09/todays-data-factoid.html

Wed, 09/22/2010 - 23:17 | Link to Comment blindman
blindman's picture

@ mercury
"This, in a nutshell is why pushing home ownership on as many Americans as physically possible didn't have the desired wealth-building effects."

.

it worked as intended, not as advertised. create debt out of nothing, have

it supply the economy as other economies are being seeded with the financial

instruments constructed from that debt, and create fortunes doing it.

the wealth was created it just wasn't in the name of the debtor. but

it is highly unstable and politically dependent, hence the bailouts required

and the humiliation of it all.

etc. you could write a book..! or ten thousand.

Wed, 09/22/2010 - 23:26 | Link to Comment rosiescenario
rosiescenario's picture

Just sort of eye balling that chart...it looks like a typical 80:20 scenario...20% ofthe cities account for 80% of the total value....

 

The really big hit is also coming now in reduced property taxes (especially on commercial property) and this is going to result in large shortfalls for local government's budgets...at least here in CA...maybe no the Hamptons or Nantucket.

Thu, 09/23/2010 - 08:24 | Link to Comment Grand Supercycle
Grand Supercycle's picture

Short signals detected yesterday have now increased.

http://stockmarket618.wordpress.com

Thu, 09/23/2010 - 10:00 | Link to Comment Ludic Fallacy
Ludic Fallacy's picture

Doesn't anyone else find this chart disingenous?  If it was plotted with #markets on the y-axis, and average home prices on the x-axis, it would be a normal distribution with a positive skewness.  I dunno, this chart seems slightly dishonest when comparing to Taleb's extremistan - seems pretty Gausian to me...

Sat, 09/25/2010 - 23:03 | Link to Comment CL1
CL1's picture

In the evening ceremony chanel bags,chanel handbags sale as the first high-level chanel designer handbags custom Chinese star chanel bags prices uk XuQing alone in Paris – 2010 Shanghai chanel bags online uk,chanel bags uk online shopping early series dress coach outlet as ceremony. coach outlet store is Karl Lagrange coach outlet online the anfield fantasy coach outlet 2010 is 30-40 in Shanghai outlet 2010 coach handbags,coach handbags oulet China’s amorous feelings chanel 2.55 handbags,chanel handbags black different dress.

Do NOT follow this link or you will be banned from the site!