Housing 2017-08-29T20:17:53+00:00

Housing

The housing market is an important economic indicator. It is often one of the first sectors to rise or fall when economic conditions improve or decline. Home construction is an important source of middle-class jobs in the North San Joaquin Valley. In addition, a limited supply of housing can lead to high housing costs (i.e. rents and home sale prices) which can reduce the attractiveness of the region for new business investment and create affordable housing challenges. Limited affordable housing can result in long commutes, limited free time, and increased traffic congestion. Finally, high housing costs can make meeting other financial needs a challenge for households.

Data for this indicator was obtained from the Census Bureau’s Building Permits Survey. It is important to note that this indicator is showing data on the number of units built, not the number of structures built.

This graph shows the number of single and multi-family residential building permits issued in the NSJV each year between 2000 and 2015. The number of building permits peaked in 2003, slightly after the peak in migration inflows in 2001, most likely caused by the dot com bubble. Although the decrease in the number of new building permits issued began prior to the Great Recession, the Great Recession had an effect on new residential construction. Beginning in 2008 less than 2,000 units (including apartment units) annually until 2015 when slightly more than 3,000 units were built. This still remains below the 8,000 annual units necessary to keep up with population growth.

Data for this indicator was obtained from the Census Bureau’s Building Permits Survey. It is important to note that this indicator is showing data on the number of units built, not the number of structures built.

This graph shows the percent of building permits issued by type. The overwhelming majority of residential units constructed in the NSJV are single-family homes. Between 2010 and 2015 over 85% of units constructed were single-family homes, although this number dropped in 75% in 2015. Conversely, over half of units constructed in California during the same time period were multi-family units. The ample space and cheap real estate in the NSJV are contributing factors to the style of home constructed here. It is much more difficult to construct large single-family housing developments in the more urban San Francisco, and Los Angeles areas.

Data for this indicator was obtained from the Census Bureau’s American Community Survey, 1-year estimates.

This graph shows the percent of all housing units that are owner occupied compared to renter occupied for the United States, California and the NSJV. A higher percent of housing units are owner occupied in the United States than in California and the NSJV. This is due to the drastically lower cost of owning a home in other parts of the United States. While the percent of housing units that are owner occupied is decreasing in all geographies examined, the sharpest decline is seen in the NSJV and occurred at the beginning of the Great Recession. A possible explanation for this is that the NSJV was harder hit by the recession than other parts of California and the United States which forced people to sell their homes and move into cheater, rental housing.

Data for this indicator was obtained from Zillow.com. Zillow data shows the median sale price for homes monthly, so this data was averaged for each year.

This graph shows the annual median home sale price for the United States, California, and the NSJV component counties. The data was taken from monthly median home price estimates which were averaged to obtain the annual price estimate. Home prices are much more volatile in California and the NSJV than in the United States as a whole, although they follow the same price trends. In the late 1990s home prices in the United States and the NSJV were comparable. However, following the dot com bubble prices in California and the NSJV shot up while prices in the United States increased at a much steadier rate. Beginning in 2007 home prices in California remained significantly higher than the United States and the NSJV. Prices have been increasing in all geographies since 2012.

Average first-time home buyer affordability index

2014 2015 2016 (Q1-Q2)
Merced 76.4% 73.9% 71.6%
San Joaquin 48.1% 50.7% 46.6%
Stanislaus 67.8% 63.7% 67.1%
NSJV 53.5% 52.1% 51.7%

Data for this indicator was obtained from the California Association of Realtors (CAR). CAR provides the percent of first time homebuyers that can afford to purchase an entry-level home as defined by CAR. This data is presented quarterly so the quarters were averaged to arrive at the annual average.

This table shows the percent of households in California and the NSJV component counties that can afford to buy a median priced entry level home. A higher percent of households in the NSJV can afford to purchase their first homes than in California. This makes sense as median home prices in other parts of California are so much higher than they are in the NSJV. The most affordable homes for first time home buyers are located in Merced County. Homes are also very affordable in Stanislaus County, while a smaller percent of households in San Joaquin County can afford to purchase their first home. The percent of households able to afford a first home has decreased in all geographies since 2014, reflecting increasing home prices.

View Data

Zillow Research

This graph shows the percent of mortgages in the United States, California and the NSJV counties that are underwater. That is, more is owed on the mortgage than the house is currently worth. Underwater mortgages peaked throughout the United States during the Great Recession when plummeting housing prices meant those that the amount owed on mortgages for recently purchased homes quickly became larger than the value of the house. The percent of mortgages that were underwater in 2011 through 2013 in the NSJV was significantly higher than in California and the United States as a whole. However, in 2014, 2015, and 2016 this percent has decrease steadily to hover just below 15%, in line with California and the United States due to increasing housing values.

Data for this indicator was obtained from the Census Bureau’s American Community Survey, 1-year estimates.

This graph shows the percent of households in the United States, California, and the NSJV that spend more than 30% of their income on housing. The 30% standard is somewhat arbitrary, but evolved from the United States National Housing Act of 1937 which created a program designed to help low income families. The original threshold was 20% of income spent on rent, but that increased to 40% in 1981. Unsurprisingly the percent of households spending 30% or more of income on housing costs peaked in the NSJV during the Great Recession in 2008, although the peak occurred in 2010 for the United States as a whole. Since then the percent of households spending 30% or more of income on housing has decrease steadily as incomes have begun to increase once more.

This graph shows the percent of 18-34 year olds that live with at least one parent for the United States, California, and the NSJV. Just as there are a number of reasons why a grandparent might live with their children and grandchildren, there are a number of reasons why an 18-34 year old would live with their parents. However, the largest reason would be for financial reasons. The rates of 18-34 year olds living with their parents are fairly consistent between the United States, California, and the NSJV. Despite this, the rates in California and the United States have been steadily decreasing since 1980, while the rates in the NSJV have been increasing with a huge jump occurring between 2000 and 2013. A possible explanation for this is a high unemployment and underemployment rate about that age group in the NSJV.

This graph looks at multigenerational households, defined as family households with three or more generations. Multigenerational households may be more likely to reside in areas where new immigrants live with their relatives, in areas where housing shortages or high costs force families to double up their living arrangements, or in areas that have relatively high percentages of children with single parents who live with their children in their parents’ homes. Other cultural and economic factors may also play a role. Compared to the state and nation, the NSJV has a larger percentage of multigenerational households.