Home prices rose everywhere

Are rising prices in Kalamazoo a symptom of “climate refugees” moving to the cool, Rust Belt uplands? That’s a hypothesis put forward by a friend who works in the climate-insurance-housing cost nexus. It’s a provocative hypothesis. How else can one explain why demand for homes in Rochester, Syracuse, Youngstown and other snowy, rusty places has risen so much?

To kick the tires on this idea, I ran the number: six year home value growth rates by metro, from Zillow (full size map here). If climate is the central piece of the story, it should show up as low price growth in sea-level, hurricane-exposed states, and high price growth inland.

The clearest takeaway is that there’s nothing special about Kalamazoo. That metro has experienced nationally-average price growth.

To be sure, the worst-performing housing market in the U.S. is in Louisiana, where actual hurricane destruction hammered the physical housing stock and the insurance market alike. But Miami – which is a sinking ship by many accounts – has had higher price growth (much more construction) than, say, Greater Boston or Philadelphia.

Other regions with low price growth include Colorado, Texas, and Northern California. But even in those areas, the rates are not very far below average. Mostly, the nation was hit by broad inflationary factors. The local deviations from that are small – perhaps even smaller than usual – and swamped by the national story.

None of this proves that climate isn’t a meaningful underlying factor. Perhaps prices in Florida would have doubled without rising fears and insurance rates. Perhaps Youngstown and Syracuse would have had below-average growth without climate refugees. But unless that’s proven, we should stick to stories that can explain why prices rose about the same in Kalamazoo, Deltona, OKC, and Seattle.