Trulia's Housing Misery Index Hints at What's to Come During -- and After -- the Election

Editor's note: The following article was originally published on Trulia's blog. The opinions in this article are that of the author and do not necessarily reflect the position of AOL Real Estate.

In our last update of Trulia's Housing Misery Index before the election, we look at which states have the highest housing misery. The top two -- Nevada and Florida -- are both swing states. However, both have also seen prices rise sharply in the last year, so their misery is mixed with some relief.

We also look beyond the election to see whether the candidates will prioritize housing issues if elected, based on how miserable their most loyal states are. Presidents may campaign on the issues that matter most in swing states, but, once elected, their policies favor the states that voted for them. Here's what it all means for the election homestretch.

The Most Miserable Housing States

Our Housing Misery Index takes two important indicators of a state's housing market and adds them together. These are:

1. The percentage change in home prices from each state's own peak during last decade's bubble until today, from FHFA. Big price drops lead to more underwater borrowers and less household wealth, which hurt the housing market and hold back economic recovery.

2. The percent of mortgages either severely delinquent or in foreclosure, from CoreLogic. Defaults and foreclosures damage consumer confidence in the housing recovery, and foreclosures hurt not only the people who lose their homes but also their neighbors.

Nevada, Florida, California and Arizona have the highest housing misery in the country, thanks to big price declines and -- especially in Florida -- a very high share of homes in delinquency or foreclosure. In all four of these states, though, prices are rebounding: asking prices are up year over year (Y-o-Y) 4.5 percent in California, 6.9 percent in Florida, 7 percent in Nevada and 18.1 percent in Arizona, according to the September 2012 Trulia Price Monitor.

Misery in the Swing States

The two most miserable housing states -- Nevada and Florida -- are "swing states" in the election, so says RealClearPolitics as of October 15. These are states that could still go either way in next month's Presidential election, and so the issues that matter most in these states are the issues the candidate will -- or at least should! -- focus on. There are now 11 swing states, which are bolded and enlarged in our chart. (Several organizations track "toss-up states," "swing states" or "battleground states" -- they mean the same thing and come up with pretty similar lists.) If and when the candidates decide to campaign on housing issues, they'll do it in Nevada or Florida. Another swing state, Michigan, also ranks high on housing misery. But the other eight swing states have moderate or low housing misery: Ohio and Pennsylvania, for instance, are critical to this election, but housing policies aren't what the candidates should talk about in those lower-misery swing states.

The Map of Misery

The housing crisis took its greatest toll in the Sunbelt. Even today, six years after the housing market started to tank, prices there remain far below their peak, and many homes are delinquent or in foreclosure. But the misery is localized. The West and Florida have it worst; the Midwest and the Northeast still feel the pain, too. But much of the center of the U.S. escaped the misery: Texas, Oklahoma, the Dakotas, and other Plains and Mountain states have among the least misery in the country.

It's Nov. 7, and the Election Is Finally Over. Now What?

Even though candidates focus on swing states during the campaign, election winners often end up rewarding those who got them elected -- and punishing the states that voted against them. (This applies to cities, suburbs and rural areas, too: Democrats favor policies that especially help cities -- which, after all, tend to vote Democratic -- more than Republicans do.) If a re-elected President Obama or a newly elected President Romney rewards the states that voted for him and punishes the states that didn't, what would that mean for housing policy?

Again, we turned to the election predictions at Real Clear Politics, and divided states into three groups: those "solid" or "likely" to vote for Obama, like California and New York; those "solid" or "likely" to vote for Romney, like Texas and Georgia; and those in the middle, which include the 11 swing states plus a few more than are only "leaning" (but not "likely" or "solid") one way or the other.

The differences are stark. Obama's loyal states need housing policy much more than Romney's loyal states do. Let's start with the Housing Misery map. Most of the low-misery states in the center of the country are strong Romney supporters. The "solid" or "likely" Obama states have an average Housing Misery Index of 32, compared with just 12 for the "solid" or "likely" Romney states. Furthermore, Obama's base states saw price gains of just 0.9 percent in the past year, slower than 2.3 percent for Romney's base states. It goes on: Not only do Obama states have more Housing Misery and a weaker recent price recovery, but they also are much less affordable. The median home price per square foot is $168 in the "solid" or "likely" Obama states -- almost twice as much as the median price per square foot of $87 in the Romney states. Obama is strong in the expensive coastal states of California and the Northeast, while Romney's strength is in the lower-cost South and center of the country. Finally, the homeownership rate is lower in the Obama states (60 percent) than in the Romney states (67 percent).

Note: These are state election predictions from RealClearPolitics as of Monday, Oct. 15. Housing data for each group of states is weighted by electoral votes for each state.

That means every type of housing pain -- post-bubble housing misery, a slow price recovery, lack of affordability and barriers to homeownership -- is more severe in Obamaland than in Romney Country. If the next President rewards those who voted for him, he'll focus on the issues that are most pressing in the states that elected him. That would make housing a higher priority for President Obama than for President Romney.

See also:
Romney's and Obama's Housing Policies: Why the Candidates Seem Reluctant to Go There

Lifelong Renters Dodged the Housing Bust but Not Buying a Home Could Cost Them
Election 2012: Will It Affect Your Decision to Buy a Home?

Homes Fit for a President?
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Trulia's Housing Misery Index Hints at What's to Come During -- and After -- the Election

The former governor of Massachusetts owns a smattering of real estate across the country, including homes in Massachusetts, California and New Hampshire. This collection has been pared down; Romney previously owned two other homes — a large estate in Belmont, Mass., that he sold for $3.5 million in 2009 and a ski home in Park City, Utah, that he also dumped in 2009 for a little over $5.25 million.

When Romney is not on the campaign trail, his main home is in San Diego's beachfront community of La Jolla. Romney and his wife, Ann, purchased the $12 million La Jolla home in 2008, telling reporters that he wanted to be somewhere he could “hear the waves.” Apparently a home on the high-priced California coast (median La Jolla home values hit $1,186,200), was the right location.

It may be the ideal location, but it isn’t quite the ideal home, at least not yet. In August 2011, Romney filed an application with the city to bulldoze the single-story beachfront home and replace it with a larger, two-story home. The construction won’t begin until after election season, though.

In June 2010, the Romneys bought a two-bedroom townhouse in suburban Belmont, shown above. According to property listing information, the Romneys paid $895,000 for the 2,100-square-foot home in the new residential development, The Woodlands. This is the first purchase the Romneys have made in the Massachusetts area in two years; previously they claimed their son’s basement apartment as their legal address.

The Romneys own an 11-acre property, pictured above, smack dab on the shores of Lake Winnipesaukee in Wolfeboro. Purchased for $3 million in 1997, the Romneys’ 5,400-square-foot main house and additional guesthouses are home to the extended Romney family each summer.

While Obama did spend part of his childhood in Hawaii before moving to Chicago, he owns just one home -- in the Windy City. He and wife Michelle bought the brick home in 2005 for $1.65 million. Located on Greenwood Avenue, the home was built in 1917 and offers 6,199 square feet of space.

Although Obama hasn’t owned any other properties, an apartment that he rented while attending Columbia University in the mid-’80s is on the rental market in New York.

The two-bed, one-bath Upper West Side apartment has been updated and is available for $2,400 a month.

When it came time for former President George W. Bush to retire from the Oval Office, the 43rd president decided to go back to his home state of Texas, picking up a sprawling 8,000-square-foot home at 10141 Daria Place, which was a downsize from the 55,000-square-foot White House. The Bushes also purchased the property next door but tore it down in 2008. People speculated at the time that the demolition was to expand the former first family’s yard.

Unlike many other presidents, Bill Clinton didn’t own a home during his residency at the White House. Born and raised in Arkansas, the former president and his wife, Secretary of State Hillary Clinton, chose to stay on the East Coast and purchased a home in Chappaqua, N.Y. at the end of his second term in office. By several accounts, the Clintons are quite popular in the small Westchester County town. Built in 1889, the Clintons’ home is situated on a cul-de-sac lot and has 5,232 square feet of living space, five beds and four baths.

Before Ronald Reagan lived at the White House, he lived among the star-studded hills of Pacific Palisades and Bel Air. His former Pacific Palisades property was home base for Reagan and his wife, Nancy, until Reagan was elected president in 1981. After two terms as the 40th president of the U.S., “The Gipper” and his wife returned to Los Angeles, picking up a prime slice of real estate in the posh Bel Air neighborhood. The property remains Nancy Reagan’s home today.

Not one, but two of former President Gerald Ford’s homes are currently for sale — one listed in California and one in Colorado. Ford’s Vail home, pictured above, is a testament to his love of skiing and the outdoors. Listed for $9.85 million, the ski-in/ski-out home has been on and off the market starting in 2008, with a hefty price tag of $14.9 million. Gerald Ford’s other home is listed on the Rancho Mirage real estate market for significantly less. The $1.699 million listing is a midcentury ranch-style desert home located on the Thunderbird Country golf course and contains some presidential memorabilia, including a large portrait of Betty Ford hanging in the living room.

One of America’s most famous families holds one of America’s most storied properties. The Kennedy Compound consists of 6 acres of waterfront property on Nantucket Sound in Hyannis Port, Mass., a small village in the town of Barnstable. John F. Kennedy’s father, Joseph P. Kennedy, rented a summer cottage in Hyannis Port in 1926 and purchased the cottage two years later. The home, which Joseph Kennedy enlarged and remodeled, became a summer getaway for his family, who enjoyed sailing on the sound. In 1956, after his marriage to Jacqueline Bouvier, JFK bought a smaller home nearby, and his brother Robert later purchased an adjacent home. Following the recent death of another sibling, Massachusetts Sen. Ted Kennedy, the compound was donated to the Edward M. Kennedy Institute.

While we don’t have the first president’s childhood home -- the one where he purportedly chopped down a cherry tree -- we do have a home where George Washington reportedly slept. It is believed that the general hung up his wig at this 1739 homestead, named the “Fowler House.” The number of nights that Washington slept here is up for debate, but if you believe the historic marker on the home, he often stayed here on his way from West Point to Connecticut. The New York home is 5,800 square feet and has five bedrooms and two baths and was recently listed on the Brewster real estate market for $500,000.


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