ARI SHAPIRO, HOST:
We often hear people talk about two Americas. Now there is data showing that the same could be said of the housing market. In big cities and coastal areas, real estate prices go boom and bust. At the moment, they are higher than they've ever been. In less-populated inland areas, home prices didn't lose as much value in the crash, and since then, they have been creeping up slowly, if at all. This also has some connection to voting patterns.
Laura Kusisto has been piecing together the data for The Wall Street Journal and joins us now. Hi there.
LAURA KUSISTO: Oh, hi. Thanks so much for having me.
SHAPIRO: Give us a snapshot of how dramatic these differences are.
KUSISTO: Yeah, so I think probably the most dramatic statistic is that if you bought a home in one of these pricier ZIP codes, one where the median value is 500,000 to a million dollars, in let's say 2000, your home would be worth 103 percent more than what you paid for it.
KUSISTO: On the flip side, if you bought one were the median home price was 100,000 to 150,000, it's worth just 24 percent more than you would have paid in 2000.
SHAPIRO: Why is that? Why is the difference so dramatic?
KUSISTO: So I think it has a lot to do with the kinds of discussions that we had surrounding the election. People are moving to these pricier coastal areas in search of jobs and economic opportunity, and yet those are also places that aren't building a ton of new homes. Places like San Francisco and New York City have very restrictive building regulations that make it really hard to build new supply. And so that's pushing prices up.
And then I think you also have the fact that it's gotten a lot harder for lower- and middle-income people to get a mortgage for some good reason, right? Too many people got mortgages in 2006 and 2007, but the consequence is that a lot of those sort of more affordably priced homes aren't seeing the same kind of big rise in demand that some of the more expensive ones are.
SHAPIRO: And how closely does this map onto politics? I mean how conservative are the places where home prices are relatively stable but not that valuable, and how liberal are the places where home prices are rocketing all over the place?
KUSISTO: I think that was one of the things that most surprised me when I was reporting this story. I had kind of thought based on the kind of frustration and outrage that we were hearing from some of these Trump counties, that you would see these counties really suffering. You would see their home prices dropping.
And what was actually sort of interesting is that they're just kind of flat. It's not very exciting. It's sort of been a long, slow sort of drag along at about the same levels. And so in a way, they actually fared better during the last 10 years. They didn't have this big run-up and this big run-down.
But you can also kind of understand why people who are living in those places like northeastern Pennsylvania that I looked at, who are watching homes in nearby New York and Philadelphia gain value and they're not, and you can kind of see how that would create the sense that others are gaining while they're getting left behind.
SHAPIRO: Is this divide in the housing market a problem that needs to be solved, or is it just an interesting thing that's happening in American real estate?
KUSISTO: Probably a little bit of both, but I do think it's a problem. And I think one of the reasons it's a problem is that if the divide continues to widen between these areas of opportunities with more expensive homes and these areas that don't have as many jobs but have more affordable homes, then it makes it harder for people to move to places of opportunity.
It will be more likely that people will get stuck in these areas where their homes aren't worth very much and they're not going up in value and they can't sell them and move to a better job opportunity. And then on the flip side, you have young people living in places like New York and San Francisco that find that they can't find something they can afford and be able to settle down. And so they're faced with this pressure to potentially leave.
So I think really the next housing crisis is going to be one about affordability and the lack of affordable homes near jobs. It's not going to look quite like the housing crisis that we saw in 2006 and 2007.
SHAPIRO: The connection between home prices and salaries does feel like a Catch-22, that the high-paying jobs are only available in these places where housing is so expensive that you can't really get into the market to live someplace you can get one of those high-paying jobs.
KUSISTO: Yeah. And other data that I've looked at for other stories is certainly getting worse over time. I wrote a story earlier this year about growing numbers of land use regulations and how those are making it more and more difficult for people to move to higher-opportunity areas. Anyone who has a job in one of these big coastal cities and is stuck renting for years and years knows that dilemma.
SHAPIRO: That's Laura Kusisto, who covers housing for The Wall Street Journal. Thanks for joining us.
KUSISTO: Yeah, thank you so much. It was great to chat with you.
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