Via an Oregon media outlet, here’s an interesting chart of different US metro areas showing the correlation between “median asking price” and “% growth in housing units.” It comes from an op-ed by an Oregon economist named Timothy Duy.
In typical supply-and-demand fashion, Duy argues that places that build more housing have lower prices. He’s talking about Portland, but here’s his main point:
The genesis of today’s problems lie in the aftermath of the housing bubble. We believe the region experienced a near-term price bubble in the mid-2000s but not an extended period of overbuilding. Relative to population growth, new construction a decade ago was not substantially higher than during the previous 20 years. The Great Recession slowed household formation, easing demand and increasing affordability. However, the bust has been disproportionate to the boom. Back in 2011 we became worried about the possibility of underbuilding relative to population growth. Such a scenario has become painfully obvious in recent years in the form of low vacancies, rising rents and higher prices.
[…] To be sure, there are cities that have jointly lower growth in housing supply and prices. This is generally the result of lower economic or population growth. Of the 20 cities adding fewer units annually than Portland and prices less than $150 a square foot, only one, Chicago, has added substantially more jobs than Portland since 1990. But recent trends are no longer in Chicago’s favor; since 2000, Chicago has added 25,000 fewer jobs than Portland.
I wonder where the Twin Cities would fit on this chart?