Median New Home Prices Decouple From Median Household Income

At the local level, the breakdown of public order has affected several large cities following local officials' actions to defund police departments and to reduce criminal prosecutions in the aftermath of the Black Lives Matter anti-police protests and riots at the end of May 2020 and early June 2020. Cities such as Chicago, Minneapolis, Los Angeles, New York, San Francisco, Portland and Seattle, have each experienced significant increases in crimes against people and property as they have become more unsafe, as would be predicted. The resulting decrease of public order in these cities is driving outward migration flows from them, boosting the demand for new homes outside the newly crime-infested jurisdictions.

The consequences of these things together result in the decoupling of median household sale prices from median household income, as the increased demand for new homes is paired with falling incomes.

How long that state of affairs will continue remains to be seen. With most of the responsibility for these conditions lying with elected state and local government officials in high population states, it may well continue until they reopen their economies, lift their stay at home orders, reestablish criminal law enforcement as a priority, or are replaced in office by those who will.

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