Red States Pummel Blue States in Housing Recovery

According to data from RealtyTrac, more housing markets (52% to be exact) are now better off than they were two years ago. 11% exactly are worse off, and the other 37% have stayed right where they are.

There are five factors to account for when deemed “better off”. Further more, a county must meet three of these five to be considered better off. All five factors have a major influence on the state of a houses health. Let’s go through the list shall we?

  1. Significant fewer foreclosures.
  2. Higher median home prices.
  3. A percentage of homeowners who are deeply underwater on their mortgages that is lower than the national average.
  4. Drastically lower unemployment.
  5. Counties where home prices didn’t rise rapidly that many average people could not afford to buy in those areas anymore.


We must also consider the role of politics. The status of your state’s housing market may depend on if you live in a “red state”, or “blue state”. When we look at the market from two years ago, we can see that 53% (10/19 analyzed) of the Blue states were better off, while fully 78% (18/23 analyzed) of the Red states housing markets were better off.

Out of the 1,547 total counties studied by RealtyTrac (accounting for 77% of the total U.S. population) from August 2012 – August 2014, Colorado, Florida, Virginia, Ohio, and Nevada were thrown out because they are swing states. Also, Delaware, Hawaii, and South Dakota were omitted because there wasn’t enough statistical data.

While RealtyTrac is unsure of the exact reasons for the Red states being better off, they believe it has to do with how each state handled the foreclosure crisis. He says, “This fits with the storyline of many of the blue states taking a more pro-active/aggressive stance toward foreclosure prevention, while many of the red states have taken a more laissez-faire approach,” Because blue states wanted to protect the homeowners, they made legislation more proactive court rulings to slow down the foreclosure process.

The Red states were hit hard by the foreclosures early on, but now most of the foreclosure issues have cleared, allowing home prices to rebound quicker. Many of the Blue states are still seeing an increase in foreclosures. While all these foreclosures are still happening, they are weighing down the home prices in the surround neighborhoods.

This is all theory and could be due to something completely different. With the Red states being so rural, they were not hit as hard by the housing bubble as the urban and suburban housing markets, which are usually heavy blue states.

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