The NY Fed has a curious research piece out, looking at areas of Upstate New York that were “insulated” from housing price volatility.

They note that many parts of the country have not experienced dramatic declines in housing prices, and upstate metropolitan areas of Buffalo, Rochester, and Syracuse even enjoyed price increases during the recession.

The NY Fed suggests the reason why is fairly simple: “The region’s relatively low incidence of nonprime mortgages.”


Metro Area Home Price Appreciation, 2000-08

click for larger chart


Geographic Distribution of Boom/Bust Metropolitan Areas

Sources: Federal Housing Finance Agency, All Transactions index; Moody’s


The one caveat I would add is that the coastal populations are far larger, and have a greater density (i.e, on less land),  than the non coastal Western areas and Southeast. See this cartogram for a graph of what this looks like.

Hat tip Real Time Economics


Bypassing the Bust: The Stability of Upstate New York’s Housing Markets during the Recession
Jaison R. Abel and Richard Deitz
FEDERAL RESERVE BANK OF NEW YORK Second District, March 2010
Volume 16, Number 3

Category: Credit, Cycles, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

29 Responses to “Did US Housing Have a Boom/Bust Cycle?”

  1. The_Speculator says:

    here is the real reason: NO ONE IN THEIR RIGHT MIND WANTS TO LIVE UP THERE.

  2. VennData says:

    Big RE boom in and around the area of the West Hollywood location of the Hollywood Voyeur Club…

    …where seated GOP operatives demonstrated the inclusiveness of the party’s so-called ‘Big Tent’ by displaying the napkins in their laps during the sapphic B&D show.

  3. Lariat1 says:

    Except for the “locals” and the hedge fund and big, big money people who have turned all the old dairy farms into their “gentlemen farms”, with horse stables that could house multiple families in luxury.

  4. Marcus Aurelius says:

    Until (shadow) supply and demand are rectified (as opposed the the fantasy we have been force-fed), and until prices have returned to traditional mortgage to (shrinking) income ratios, this chart means doodly-squat.

  5. jpm says:

    Dying to see what this graph looks like in another two years after the non-subprime mortgages blow up.

  6. DustySmith says:

    No surprise here. Rochester and upstate New York have been in a mild recession for years. The decline of Kodak and other major industries have kept things moving very slow for a while. The downtown areas are (mostly) not desirable to live in, and there are plenty of nice suburbs with high quality old houses. High supply + low demand = you don’t need a subprime mortgage to buy a 2BR+ $100,000 house.

    Let me guess, Detroit didn’t have a boom/bust either?


    BR: Detroit is in the lower left quadrant — Bust/No Boom

  7. seana0325 says:

    Hey Barry & anyone who’d like to comment:

    Do you think if the top is in the not too distant future, that we will see housing and financials top out 1st like we did in ’07, or is it anyone’s guess this time around?

  8. maspablo says:

    I’m a Mohawk Valley native , (Amsterdam) . I wouldnt say that the bust has passed upstate buy , more like nothing has moved , and people are very slow to drop prices to move product . Home and land sales are still a fraction of a few years ago. I would agree that there are few non-prime mortgages , though prices did double from 01-06 in the county where I’m from.

  9. jdollinger says:

    I disagree with the explanation of a less volatile trend in housing prices that “The reason why is fairly simple: “The region’s relatively low incidence of nonprime mortgages.”

    As a former “local” I think the lack of parabolic appreciation is attributable to flat to declining population growth in the upstate area due to stagnant economic conditions. Since prices had not risen to levels that were fundamentally inconsistent with rent/purchase economics they did not need to fall nearly as much to equialize potential buyers and sellers.

  10. mgflaw says:

    Having lived in Syracuse for the last 4 years (thankful to have escaped), and having seen approximately $250,000 of my hard earned money disappear in real estate there (Syracuse real estate is where money goes to die), I must say that the statistics do not reflect an important reality on the ground. That is that probably 95% of the houses in central New York are between $85,000 and $250,000. Yes, the market is liquid and homes sell. The prices never really rise very much and they didn’t drop during the past couple of years. If your family makes $50,000 a year, you can certainly have a solid roof over your head.

    However, and this is a big however, at the “high-end” of the market ($350k-500k) there is very little movement. If you want to sell your home you must expect to have it on the market for a long time and to take a bath on the resale price.

    Now at the “very high end” ($500k+) you can literally have your home on the market for 2-3 years and never have a reasonable offer on it. The market is basically dead.

    If you have a home that cost you $750+ to build or buy in the last several years, break out the gasoline and light a match.

  11. franklin411 says:

    Big tent! Ha! =)

  12. scm0330 says:

    upstate NY is an economic basket case that needs to be seen to be believed. we’re a slightly upscale province of the appalachian belt. 40 years of liberal politics, beginning with Nelson Rockefeller (R), have led to a bloated public workforce, unaffordable state budgets, some of the highest taxes and most stifling regulations in the US, and an economy that has inexorably driven out private enterprise if it wasn’t smothered in the crib first.

    the state goverment in in the thrall of public sector unions. many of the smaller upstate cities and communities are mere wards of the state, and of the public teat — utterly dependent on public- or quasi-public sector jobs to sustain what passes for a local economy. the lack of a housing bubble traces to these facts, and to upstate’s shrinking (emptying-out) population, far more so than what loans got made by the banks. lending standards tend toward the conservative, however. (and when i hear F411 orgasmically prattle on with his social democratic utopian ideals, he only needs to travel to upstate to see a real-world laboratory that’s been hard at work destroying wealth and the human spirit for decades)

  13. tagyoureit says:

    While observing the galactic plane in metro area home price appreciation, a gamma ray burst fried my eyeballs.

  14. [...] swaths of the US avoided the housing boom (and bust).  (Big Picture, Real Time [...]

  15. Ny Stock Guy says:

    Having been raised in upstate NY, I have to agree with what has been said by everyone else. The economy there has been in a recession since about 1965. It has been a steady flow of bad news, decade after decade.

    If you can find a dependable, decent job, don’t mind the constant overcast sky, and like lots of snow, it’s a great place to live.

  16. Marcus Aurelius says:


    Manhattan alone has about 61,000 millionaire households after 40 years of liberal politics and a shitload of unions.

    Please explain how this could possibly happen.

  17. ashpelham2 says:

    I understand why the upstate part of New York has changed for the worse over the years. It’s gotta be a tough place to live, with the weather and economic conditions that have persisted. About every day, I meet someone who grew up there, and moved to the South at some point. It makes you wonder at what point that migration might stop or, egads!, reverse and population start growing again.

    Same story with Alabama, for the most part. In Huntsville, one the main working metros in this state, there is plenty of incoming population, but its all defense and tech related. If defense spending gets chopped heavily in lieu of higher taxes in the future, look out Huntsville. It has all the makings of a bubble right now. Fortune magazine just named Huntsville as #1 in the us to find a job. I’ve talked to people from up there, and most tell me that, sure, you can find a job if you’re ex-military or in aerospace, but anything else…..recession city.

    Birmingham has been stagnant as a metro area for a long time, but the city proper has been shrinking steadily for many, many years. Our populations in this country are as migratory as our forefathers who came to North America. We have to keep moving. Mortgages are so 2000′s. In the 010′s, everyone rents.

  18. scm0330 says:

    @ marcus

    a good measure of those manhattan households trace their wealth to wall street and the financial sector, which has extracted rents from the broader economy since the day before forever. then there’s the ecosystem of divorce attorneys, cosmetic surgeons, etc. that indirectly feed off those Wall Street rentiers. as we both know, many wealthy world citizens keep a home in NYC, too.

    with respect to an economic backwater i was speaking specifically to upstate. similar to Manhattan, there are many highly affluent households and zip codes in NJ, CA, and IL (for starters) also, but liberal politics and excessive unionism, especially in the public sector, have ruined the finances of those states as well, and all taxpayers will pay — the costs will simply be more readily borne by all those “millionaires.”

  19. tenaciousd says:

    I live in Asheville, NC, which gets a green dot. Anyone who doesn’t think there has been a boom or bust here is a lying statistician. I have friend who’s been an appraiser for decades and he says 90% of his work is REO appraisals. For most of his career it was less than 10%. He says he sees no sign of it letting up. What’s more, this market depends highly on migrants from the coasts to come here and pay outrageous prices for property. If they boom or bust, we boom or bust.

  20. [...] – Recent research from NY Fed shows upstate NY’s housing markets were insulated from the boom/bust cycle; Buffalo, Rochester and Syracuse have actually enjoyed price increases throughout the recession. “The reason why is fairly simple: ‘The region’s relatively low incidence on nonprime mortgages,’” Barry Ritholtz writes. [...]

  21. Marcus Aurelius says:


    But where did the millionaires come from in the first place, what with all of the liberalism and wealth-sucking of the unions? Wouldn’t it be impossible? Wouldn’t that wealth have been sucked away from the individual and into the pockets of the “liberal” welfare state and organized labor, before it had a chance to be accumulated by an individual?

    Seems to me, the system is working just fine, other than the huge deficits that enable the millionaires at the expense of the common person — regardless of political philosophy or union membership.

    Seems like you need a scapegoat.

  22. Mannwich says:

    I would aim a little (actually, a lot) higher than the Unions if I’m going to scapegoat. They are but a pimple on the country’s ass compared to the real problems in this country. Go after those and you get my respect. Mish has lost a lot of mine with his uber-obsession on this topic-FWIW.

  23. foxorrabbit says:

    Great article. I think the missing link is population change. Upstate New York and the Detroit-area have been among the lowest counties in terms of population change. So that would be a significant factor in preventing a boom (unless they knocked down houses as people moved away).

  24. foxorrabbit says:

    @ Marcus Aurelius: the entire capital flow of the country passes through NYC. It’s not hard for the opportunists to stand at the waters edge filling their buckets as the money gushes by. Not even liberal policies could stop that (unless you want to go back to marginal income tax rates of 70%+ and can guarantee no corruption).

    No such river exists in upstate NY.

  25. scm0330 says:


    i think you’re much smarter than the arguments you’re making. but you need to know quite a bit more about the economic history of upstate (and its relation to downstate). as recently as the 50s, upstate was an economic leader. it was silicon valley before there was a silicon valley. ibm was founded in endicott. kodak and xerox were anchor tenants in rochester, and were the original msft and csco, stock-wise. the defense electronics corridor radiating east-west and north-south from syracuse was nationally prominent. buffalo was a huge manufacturing town. the mills there ran 3 shifts. ge had a major presence in upstate cities. once, ny really was the empire state.

    upstate gruadually lost its competitiveness to the non-union south, and later to low-cost foreign competition. the ultimate seeds of upstate’s demise were sown by the rockefeller administration of the late 60s, though, which put all of ny on a trajectory of greatly expanded statism – taxation, regulation, and spending. i won’t rehash much of my earlier comments about the current state apparatus as being in the iron grip of the public sector unions. but they are rent-seekers in the classic economic sense, stealing (yes, stealing) outsized economic benefits from the broad masses for their concentrated few. the details of pension and other retiree benefits would shock a hardscrabble private sector type. you simply have no idea, unless you live here, the stranglehold the state government, and their funding allies among csea, afscme, seiu, the teachers unions, etc. have over real private sector growth.

    as a direct outcome of this structure, depending on the metric, new yorkers pay the second- or third-highest local tax burden in the nation. we have the highest per-student expenditures in the nation, but not close to the best students. (maybe we need to spend more, huh?) downstate benefits uniquely from the network effects of the financial industry, as i mentioned, also visible also other industries such as media. away from nyc, though, upstate has few peers nationally in the large-scale swath of economic destruction visited to it over the last generation-plus. detroit comes to mind. that’s about it, frankly.

    the recipe is a distressingly familiar one – excessive government strangling the private sector. if you think the system is working pretty well i can only assume you “got yers” and everything else is a pleasant intellectual abstraction clouded by political bias.

  26. lonelibertarian says:

    Seattle is not having a bust? They must not live here.

  27. Julia Chestnut says:

    Texas on this map is just bizarre. We had a large run up in real estate prices during the early half of the decade. There has been no bust, true, but I think that is due to the continued employment in Texas rather than the lack of sub-prime mortgages. I think that the prime mortgages and jumbo prime are where the real risk is, and that the impact of subprime on the market (and on the tank in the economy) is hugely overstated. First, they bought cheap houses so the overall size of the loan was smaller. Second, there weren’t that many loans. The latter part of the cycle saw a huge amount of fraud — fraud is and always has been a problem, and probably all of those loans blew up. But ordinary subprime? I would say that the problem with most of those loans was that those people lost their jobs in the first wave. No job, no mortgage payment.

    When I look at this map, I see places where employment has been decimated having real estate trouble. I see places where employment has been steady or growing doing fine. Blaming it on the poor is just kind of mean. Also, within each of these markets there is likely to be huge disparity: I would wager that below the top threshold for FHA, things can sell. Above the threshold? I’d like to see that.

  28. nucemgd says:

    scm0330 is on point.

    I’ve lived in the Utica/Rome, Binghamton and Buffalo areas for a combined total of 30 years. I now live and work in metro NY.

    The upstate areas have been in a recession since the 70s. IBM, Endicott Johnson, Kodak, Xerox…the list goes on. These areas have also been subject to a tremendous decline in population.

    My dad paid $60k for his house in Endwell (nice suburb of Binghamton) in 1979 he could probably sell it now for a $100-$120k and you can still buy a house for $60-100k now. I know people who heloc’d the crap out of these inexpensive places to buy toys (cars, tvs, etc…). The scale is smaller but the same kind of damage.

    IMO the only difference between metro ny and detroit is the financial sector. This area is rife with liberalism, corruption, entitlement, victimization, laziness, incompetence…it is truly disgusting. If all the money from the financial industry didn’t flow through and enrich this area it would be even more of a toilet than it already is.