The housing market is not the US Senate

Owners Equity in Household Real Estate, %GDP, 1952-2008

Now, that chart looks punk: owners equity in household real estate as percentage of GDP has, as of 08Q4, dropped to levels not seen since 1976. Despite those data, and tons like them from the FHFA and S&P/Case-Shiller, there is a line of argument going around that the housing shock is regionally limited. A fine example was published recently in the FAJ, updated by an exchange of letters, ending:

Updated data in Table 1 support our thesis that the impact of falling housing prices has not been uniform across the United States. Housing markets in California, Nevada, Florida, and Arizona have suffered big declines, but markets in 30 of the 50 states have fallen at less than a −2 percent annual rate in real terms. In many areas, housing prices have remained flat to rising throughout the most recent bear market.

Eli Beracha and Mark Hirschey, “When Will Housing Recover?”: Authors’ Response [subscription]
Financial Analysts Journal, May/June 2009, Vol. 65, No. 3: 14-15.

While the title of this post may hint at my view here, I reproduce the table below. Critique later: I have a date with a toddler and a sunny playground.

Enjoy.

Table 1. The Bear Market in U.S. Housing, Q4:2006–Q4:2008 State Real Price Change Annual Rate (%) State Real Price Change Annual Rate (%) California –30.14 –16.42 Nebraska –2.19 –1.10 Nevada –29.84 –16.24 Pennsylvania –2.17 –1.09 Florida –27.06 –14.59 Idaho –1.95 –0.98 Arizona –21.23 –11.25 Vermont –1.80 –0.90 Michigan –14.64 –7.61 West Virginia –1.70 –0.85 Rhode Island –14.65 –7.61 Alaska –1.43 –0.72 Maryland –11.13 –5.73 New Mexico –1.27 –0.64 Massachusetts –10.51 –5.40 Kansas –1.10 –0.55 New Hampshire –9.76 –5.01 Iowa –0.88 –0.44 New Jersey –9.60 –4.92 Arkansas –0.84 –0.42 Minnesota –9.14 –4.68 Kentucky 0.22 0.11 District of Columbia –8.48 –4.34 Mississippi 0.24 0.12 Virginia –7.99 –4.08 Louisiana 0.31 0.15 Connecticut –7.89 –4.03 South Carolina 0.30 0.15 United States –7.71 –3.93 Tennessee 1.03 0.51 Hawaii –7.31 –3.73 Utah 1.39 0.69 New York –7.24 –3.69 Alabama 1.61 0.80 Delaware –6.81 –3.46 North Carolina 2.04 1.01 Ohio –6.06 –3.08 Oklahoma 2.16 1.07 Illinois –5.38 –2.73 Montana 2.65 1.32 Oregon –4.99 –2.53 Texas 3.49 1.73 Georgia –4.15 –2.09 South Dakota 3.55 1.76 Maine –3.91 –1.97 Wyoming 5.19 2.56 Wisconsin –3.30 –1.66 North Dakota 6.57 3.23 Indiana –2.94 –1.48 Low –30.14 –17.22 Washington –2.78 –1.40 High 6.57 3.75 Missouri –2.66 –1.34 Median –2.72 –1.55 Colorado –2.62 –1.32 Average –5.09 –2.91