Why Home Prices Have Increased So Fast
Zillow economist Jeff Tucker wrote a great story on August 1st that I recently read. His story was titled “Home Values Grew Most in Markets With Strictest Land Use Regulations.” He cites in his story of how job growth leads to home price growth; but the level of land use regulations has an even greater impact on home prices than does job growth.
He said, “On average nationally, every 10 percentage-point increase in jobs from 2010 to 2017 came with a 14 percentage-point increase in home values.” But in highly regulated metro areas home prices saw a 25 percentage-point increase in home values with the same percentage increase in jobs. Thus, highly regulated metro areas saw price increases nearly double the national average!
Jeff cited Denver as an example of this where our home prices have risen 60.8% since 2010 even though jobs only increased 22.6%.
Jeff in his summary states, “Metropolitan areas might be able to accommodate job growth better by making it easier to build homes for incoming workers.” Exactly! I have been saying this for years. Will any local city or county do this?