Affordability in the Epicenter of Canada's Housing Bubble
Connect with us

Real Estate

Mapping Affordability in the Epicenter of Canada’s Housing Bubble

Published

on

Mapping Affordability in the Epicenter of Canada's Housing Bubble

Mapping Affordability in the Epicenter of Canada’s Housing Bubble

At the epicenter of Canada’s housing bubble, which is now rated as the most overvalued in the world, is the west coast city of Vancouver. It’s there that low interest rates and foreign buying have fueled the average detached home price to a record of C$1.47 million, a 20% increase from the previous year.

While there are many measures of unaffordability, the government and federal agencies frequently use one such measure called the Shelter-cost to Income Ratio. It essentially compares the annual cost of an individual’s housing with the amount of income they have coming in each year. Federal agencies in Canada consider households that spend 30% or more of total before-tax household income on shelter expenses to have a “housing affordability” problem.

In Vancouver, however, the city has become so unaffordable that 25,000 households pay more for their shelter costs than their entire declared income. This works out to 9.5% of the households in the city – far higher than Greater Toronto (5.9%) or Montreal (5%).

We recently stumbled across a data mapping project by Jens von Bergmann, via the Hongcouver blog. Von Bergmann, who runs a data firm in Vancouver, has compiled a series of interactive maps that overlay census data onto the city. In Canada, the mandatory census happens every five years and creates a wealth of granular information.

Here’s the percent of people in each city block that pay more for housing than they take home in income:

Percentage paying more for housing in Vancouver, the center of Canada's Housing Bubble

In an example neighborhood pocket (dissemination area 59150581) located between Arbutus and Macdonald streets, 44.8% of households pay more for shelter than they bring in for income. The average value for each “shelter”? A cool C$1.98 million. Yet, the median individual income in the area is only C$19,993.

Things get stranger yet in Vancouver’s high-end Coal Harbour neighborhood, where somehow 62% of households claim to have lower income than shelter costs. In a pocket of Yaletown, 50% of people make less than the cost of their housing.

While the precision of the data is excellent, the only problem with it is that the last census in Canada took place in 2011. Four years ago, housing prices were a fraction of what they are today. Compare today’s price of a detached home (C$1.47 million) to the price in August 2011: C$888,243.

Have median wages jumped this much? Not likely – the problem is only getting worse.

Here’s how the value of land has changed by block from 2006 to 2014 according to some of von Bergmann’s other data based on City of Vancouver assessment records:

Vancouver change in land value

Despite the country entering a technical recession, consumers having record-high debt, and commodity markets getting routed, Vancouver’s market is still flying high today.

Housing sales in August 2015 were up 28% compared to the ten-year average, and the median price in Vancouver’s west side is entering “crazy” territory at C$2.87 million. While it is true that shelter in the epicenter of Canada’s housing bubble may seem quite expensive, at least the homes don’t look like crack shacks. Or do they?

Subscribe to Visual Capitalist
Click for Comments

Real Estate

The Median Lot Size in Every U.S. State in 2022

Lot sizes in the U.S. are shrinking compared to a few decades ago. Here’s a look at the median lot size in every U.S. state.

Published

on

Comparing median lot sizes in every U.S. state

The Median Lot Size in Every U.S. State in 2022

The “American Dream” is often associated with imagery of spacious estates adorned with white picket fences, wrap-around porches, and sprawling green lawns that seem to go on forever.

But in reality, modern American life has become much more compact. Over the last few decades, the typical lot size in the U.S. has decreased significantly—from 18,760 square feet in 1978 to 13,896 in 2020.

While lot sizes are getting smaller overall, there are still large discrepancies in lot sizes from state to state. This graphic by Angi uses data from the 2022 U.S. Lot Size Index to show the median lot size in every U.S. State, using data from 312,456 Zillow listings as of May 2022.

Largest and Smallest Median Lot Sizes by State

When it comes to the states with the largest plots of land, New England dominates the ranking, with Vermont, New Hampshire, and Maine at the top of the list.

RankStateMedian lot size (sq.ft.)
1Vermont78,408
2New Hampshire49,223
3Maine45,738
4Montana43,560
5Alaska42,423
6Mississippi31,799
7Connecticut30,928
8Arkansas24,829
9Tennessee24,394
10Georgia22,215

New England was one of the first regions settled by the Europeans in Colonial America. This long history, along with a large rural population, could explain why the area has strict zoning policies that limit density and require large minimum lot sizes for new builds.

On the opposite end of the spectrum, Nevada ranks as the state with the smallest median lot size:

RankStateMedian lot size (sq.ft.)
1Nevada7,405
2California8,327
3Arizona8,726
4Illinois9,025
5Texas9,540
6Colorado10,019
7Florida10,019
8North Dakota10,019
9New Jersey10,019
10Ohio10,019

One possible explanation is that Nevada’s population boom—and subsequent development—is relatively recent. Newer homes listed in the dataset tend to have smaller lot sizes, and in Nevada, 34.6% of homes included in the research were built in 2000 or later.

Comparing Lot Size to Land Price

Generally speaking, the states with the biggest lots also tend to have the cheapest land when broken down per square foot. For instance, in Vermont, properties sold for a median $5.95 per square foot.

comparing average lot sizes in the U.S. to price

View the full-size infographic

On the flip side, in Nevada, land sold for a median $82.80 per square foot—that’s the third most expensive of any state.

Of course, other factors are at play here when it comes to the cost of land. Like anything else that’s for sale, the price of a lot is governed largely by the laws of supply and demand.

For example, housing supply is scarce in Hawaii, where only 4.9% of the land is zoned for residential development, and the median home size is much smaller than in other parts of the country. Not surprisingly, the median plot of land in Hawaii costs $110.86 per square foot, the most expensive on the list.

The Future of Housing in America

Lot sizes remain relatively large in some states for now, but as the U.S. population continues to become more urbanized, living conditions in America could get even tighter.

Will America hold onto its spacious way of living, or could life in the U.S. start to resemble more densely populated regions in the future?

Continue Reading

Real Estate

The Median Home Size in Every U.S. State in 2022

Over the last century, the median home size in the U.S. has skyrocketed. Here’s a look at which states have the biggest and smallest homes.

Published

on

median home size in every U.S. state

The Median Home Size in Every U.S. State in 2022

Over the last century, home sizes in the U.S. have skyrocketed. In 1949, the typical single-family home was just 909 square feet—by 2021, it had shot up to 2,480 square feet.

While U.S. homes are getting larger on the whole, they still vary drastically depending on the location. What areas in the U.S. have the largest homes, and which ones have the smallest?

This graphic by American Home Shield uses data from the 2022 American Home Size Index to show the median home size in every U.S. state.

The 2022 American Home Size Index

The index uses data from 474,157 listings of both houses and condos for sale on Zillow as of May 2022. After the data was compiled, it was organized by state and city, and the median home size was then calculated for each area.

According to the findings, there was a strong correlation with the size of a home and the age of the area’s housing stock. For instance, Utah is the U.S. state with the largest median home size at 2,800 square feet. And since the state’s median home was built in 1989, it has the third-youngest home stock of any state across the country.

This trend is apparent on a city-level as well. Here’s a look at home sizes across America’s top 50 most populated cities (with available data):

Average home size in 50 U.S. cities

As the graphic shows, up-and-coming tech hubs like Raleigh and Colorado Springs have some of the largest homes.

Colorado Springs in particular has seen a significant influx in employment over the last few years, which has attracted high-income tech workers to the area driven up demand for spacious single-family dwellings.

The Price of Real Estate Compared to Home Size

The data also showed an inverse relationship between an area’s median price of real estate and the median home size. For instance, Hawaii has the smallest median home size of any state, as well as the most expensive at $743.86 per square foot.

comparing home prices in every U.S. state

This trend is apparent in the state of New York as well, which had the second smallest median home size. Home costs in the state were a median $421.49 per square foot, the third-most expensive of any state.

Lot Size vs. Home Size

Interestingly, while home sizes in the U.S. have gotten larger over time, lot sizes have shrunk over the years.

In 1978, the median lot size for a U.S. property was 18,760 square feet, but by 2020, this figure had dropped to a record low of 13,896 square feet.

With lot sizes shrinking, will there come a point where home size growth across the country starts to plateau, or even shrink?

Continue Reading
Decarbonization Channel by Visual Capitalist

Subscribe

Popular