Where the US Housing Market has Mooned

Key findings - 

• Housing prices have risen in major metropolitan areas.
• However, places which have seen the largest year-on-year increase in transaction volumes are rural areas, and not in and around the country’s major cities. 
• Price increases are not uniformly distributed across the US, prices in some states have stagnated and others soared.

The US housing market has seen a renaissance over the past year, Covid-19 notwithstanding. We will be basing this article off our US Housing Market notebook and the source of our data is the Redfin weekly housing market dataset. Our fundamental question is: 

Is the housing market boom evenly distributed across the United States? 

Transaction Volume

To begin with, let us write a relatively simple query to look at the number of homes sold weekly across the US since the start of 2020.

It is pretty obvious that housing sales in 2021 have so far outstripped that of 2020. Where though? Which counties have seen the highest weekly transaction volumes?

Naturally the counties with the highest transaction volume are the big urban counties corresponding to Chicago, Houston, Los Angeles, and Phoenix. In fact, the county-level trend lines are remarkably similar to that of the national trend.   

What about the counties which saw the biggest jump in transactions in July 2021 expressed as a percentage of that in July 2020? By the way, we are looking at counties with at least 10 transactions in July 2020.

If you do not recognise these counties, that is okay and perfectly normal. These counties are not major metropolitan areas. 

We can actually modify and expand our query. Each county is first ranked by transaction volume in 2020 and 2021. Then, they are ranked in descending order by the number of places it has moved up. We see that the counties which have seen the biggest increments in transaction volumes are largely in the South. They are also not part of major metropolitan areas.

‍

Transaction Price

‍

Apart from transaction volumes, we can also look at the changes in property prices by ranking each county using its median sale price per square foot. From there, we can obtain the national median price, price at the 25th percentile, and price at the 75th percentile..

From the chart above, the rate of sales price increase per square foot is generally the same at different price levels. However, prices in the higher range seem to have increased at a faster rate.

To further showcase this unevenness, we can look at pricing changes in major metropolitan areas.

Although these metropolitan areas started from a high base, the changes when expressed as a percentage are not astronomical either.

We can expand the query to look at price changes for each state. Of course we cannot plot all 50 states here but you can see the entire plot in our notebook. More importantly, the point here is that there are states where housing prices have remained flat and there are others that have risen considerably and consistently like AZ and CA versus AR. There are some counties that have seen phenomenal increases in prices between January 2020 and July 2021 and they are not even in the major metropolitan areas. We can write a query to illustrate this point.

In other words

Americans are buying homes. But more are buying in the suburbs and countryside than in the city.