Is China’s Property Bubble Bursting? What recent data tells us…

What is the latest data on the China’s property market? Given the importance of housing to Chinese banks and population, almost 80 percent of people in China owned their own house, a collapse would have direct effects on all income levels in society and the world economy [1,2]. The first map below shows property price in October 2012 which includes all commercial land uses but is dominated by housing.

ChinaMap_Oct2012Prices-2

The east cost of China and large population centres of Chongqing and Sichuan have the most expensive property which should not be a surprise to people familiar with China. The quality of the data will be explained below [note 1] but there is a downward bias in this data as more resent land parcels sold tend to be further from central cities because that is where the undeveloped land is located [1]. These new parcels will be cheaper than central city parcels, on average, creating the downward bias in the data. So the price per meter reported may be much lower than real life. This data is more useful for the purposes of comparisons between provinces than international measures or determining real prices.

The second map below shows the change in price per square meter by month starting December 2011 to October 2012. It shows most provinces with increases in price. This would indicate prices are holding steady. So at first look the answer is no collapse in price.

ChinaMap_10monthPriceChange-2

In provinces that have the same boundaries their major city (Beijing, Tianjin, and Shanghai) we see two modest declines, and one increase. These cities have had some of the largest increase in housing price per year, over 20 percent from 2003-2011 using a more accurate measurement [1]. One could reasonably expect the collapse in price to start with cities that have experienced the largest increase. This has not been the case.

A more convincing case can be made by looking at what happened between December 2011 and October 2012. Shanghai dropped from ¥14,503 to ¥11,237 the next month but by May 2012 had gone up to ¥12,499 and was down less than 200 yuan by October. Beijing dropped from ¥16,845 to ¥13,000 the next month but by march had increase to ¥14,731 and by October reached ¥18,041 for a net gain. Tianjin started at ¥8,965 dropped slightly to ¥8,239 the next month and stayed flat at ¥8,351 in October 2012 [3]. So all three cities experienced a sharp drop at the end of 2011 but rebounded to some degree. This is the opposite of a bursting bubble. The downward bias of this data will have a much smaller effect at this time scale so the trend in the data should be reliable. This does not mean there is not a bubble or there will not be a decline but that thus far the real estate market has not behaved like western counterparts in 2008.

[Note 1] China unlike the US does not report price by land area but by zoned property area on each parcel. New homes responsible for 87 percent of sales and 64 percent of floor space. Land prices are going to be dominated by new homes particularity in fast growing cities. Repeat sales is generally considered the best measure of price change but that simply is not a practical measure in this environment. Also under reporting for tax purposes is common. Hedonic measures were used in a paper by Dang et al. showed a significant downward bias in the parcel price measure over time[1].

Note [2] The government owns almost all non-developed rural land so the supply aspect of supply-demand is not market based but the price the land is sold for has strong market forces [1,2,4]. They have not had a private land market until recently 1998 [4]. They sell use of the land for 70 years to private developers who then build and sell to citizens or companies. Home purchases of new housing also has strong market forces at work. As stated above there is an 80 percent home ownership rate in China. In recent years to stop speculation the Chinese government has limited the buying of multiple properties for investment or speculation and also increased down payments.

[1] Deng, Y, Gyourko, J, Wu, J. Land And House Price Measurement in China, NBER Working Paper Series 18403. Accessed for a fee http://www.nber.org/papers/w18403

[2] Stein, G., Is China’s Housing Market Heading Toward a US Style Crash? Tennessee College of Law, Legal Studies Research Paper Series.  Accessed http://ssrn.com/abstract=2131402

[3] Economist Intelligence Unit 2012. Accessed via the Asia reading room in the Library of Congress.

[4] http://www.mapi.net/understanding-chinas-residential-property-prices

Posted in Housing Price, Interesting Maps, original maps | Leave a comment

Giant Sucking Sound and Makers/Takers? A look at counties…

With the inauguration over and budget battles just in the distance, it’s time to take a quick look back at the 2012 presidential election. Comments by Mitt Romeny and Paul Ryan during and after the campaign played into the belief of some that the struggle was between producers of wealth and the people who live off of producers and the campaign was over a small middle ground. This election also had a profound big city vs. small city/rural split with Obama winning 69 percent in big cities while Romney won 56 percent in small cities and rural areas [1] (see this map for a visual). This split and mode of thinking feeds into the the notion of rural America (makers) subsidizing big cities filled with poor residents (takers) in the political mind of many voters. But is this even remotely the case? Are rich counties voting republican and getting outvoted by poor areas and presumably getting money sucked away producing a geographic injustice? You can find some analysis at the state level here.

The map below examines counties that have an average household income  of more than $75,000 [note 1] and shows which candidate won theses counties [note 2]. The first map shows the typical thematic map of counties with a few labels. You can see Pres. Obama won Cook County (Chicago) so not too surprising. Many of the strong “Maker Counties”, for lack of a better term, are located on the coasts, upper-midwest, and Texas. By area it looks like an even split between Romney and Obama.

US_Election_WealthiestCounties

The bottom map is re-sized based on county population, this gives a different picture both literally and figuratively.  Counties with large areas are urban suburban, and like the top map, only counties with high median household income are filled in. You can readily observe the rich and very democratic California coast particularly San Francisco metro area with no red suburban counties and and an almost completely democratic Boston metro.  In the South, central cities tend not to make the cut on income except for Atlanta and Austin. The suburbs in southern cities tend toward republican and look like they are warped around empty cores. The northeast has strong blue central cities or inner suburbs and some red suburbs (note city of  Baltimore, Boston, and Philadelphia, as well as Brooklyn  did not make the income cut). Any notion that rural areas and small cities are subsidizing large poor urban areas and politically realities are going to make solidify these trends are empirically disproved by these maps.

This is not to say Obama won the richer residences in all these wealthy “blue” counties. In darkest blue counties where Obama won a very large majority  it is very likely he won a majority of high-income household voters. According to exit polls show he lost voter with more than $100,000 in income nationally Romney got 54 percent of those voters and 53 percent of voter making less than $50,000.  But this result altered by state significantly Obama won these voters in NY, CA, NJ, CT, and MA out of 19 states data was available [1]. But in the wealthy counties he got enough votes to win for richer voters along with the help of minority voters and lower income voters.

Source [1] http://elections.nytimes.com/2012/results/president/exit-polls

Note 1: 75,000 is about 70 percentile for household income. The national average household income is $??.

Note 2: Data from Census ACS 2006-2010 so not quite up to date with election data but as close as was available at the county level a for 5 year sample.

link http://campaignstops.blogs.nytimes.com/2012/11/12/red-versus-blue-in-a-new-light/

Posted in election, original maps, voting | Tagged , , | 1 Comment

Map showing relative size of Africa

This is a cool map fitting counties into Africa to show its size. Often we visualize the world based on what we hear or how often we hear things. I recall arguing with a Canadian about if the new Russia (a few years after the breakup of the USSR) was bigger than his Country. People in the United States often think there states are bigger then they really are (at least in the east cost) while the small size of relatively powerful European countries often surprises us. For me India with over 1 billion people just seems much smaller then I think.

true-size-of-africa

Note: The mapper did not sort correctly when listing countries by size putting China 3 and USA 4 in the world rankings. The data on the web page correctly has the USA having a larger area so I am guessing it is an excel sort on the wrong variable.

Posted in Interesting Maps, Strange and Unusual maps | Leave a comment

Nice video of transit in several cities.

This is a link to some youtube videos using transit data to show transit networks in several cities around the world. This video shows NY but you can see many other cities if you look at their page.

Posted in Transportation Network, Transportation Statistics | Tagged , , , | Leave a comment

Voter turnout history by Race and Age

Much has been made about voter turnout the past couple election cycles. In 2004, white evangelicals were seen as catapulting Pres. Bush to a second term while in 2008 young people were viewed as the movers in nominating and electing Pres. Obama to his first term in office. While I do not have official turn out numbers for 2012, just exit polls reported by the media, the US Census provides some very nice graphics on voter turnout from 1968 to 2008. There are several graphs but this post concentrates on age and race (black/white) differences over time.

It shows several interesting facts that might be surprising. First, people just vote much less than in the past. In 1968 and 1972 voter turnout was larger then today. Second, older people vote more than younger people both in 2008 and in past elections.  Third, the difference in voter participation among young blacks and whites very small and from 1984 to the present and except for 1988; young blacks voted at the same or higher rates then young whites (note 2012 was probably similar to 2008 but I do not have hard data to show this). The graph below shows that older blacks, 45 and over, continue to have lower participation rates than older white people through 2008 but that has reduced significantly from 1968 (remember both groups still vote a higher rates than younger people). Given the trends there is reason to think this reduction will continue in the future.

Midterm elections are a different story, African American participation consistently drops below white participation by a few ‘more’ percentage points. Nationally midterms have always dropped in participation rates for all voters compared with the nearest presidential elections.

Voter participation is a difficult calculation as eligible voters must be over 18, not disqualified, and a citizen. To calculate this information precinct data is reported, along with surveys, and population estimates. We do know in 2012 blacks made up about 13 percent of all voters, Hispanics 10 percent, and Asian 3 percent. Exit polls themselves will not tell you voter participation rates with a high degree of accuracy or broken down by several categories like race and age, although estimates are possible. Also data is lacking for geographic breakdowns.

Posted in election, voting | Tagged , , | Leave a comment

Two more (cool) ways to view the Presidential Election

There is no ideal way of giving a snapshot of an election, particularly for a country the size of the United States, so lets look at three ways of visualizing it (including 2 methods created with the help of my sister at visualizingeconomics.com). Typically the election has been visualized geographically by the media focusing on who will, or has won, each state and county in what are technically called choropleth maps. John King of CNN does a particularly good job on the CNN interactive election map zooming in looking at vote percentages and turnouts vs. previous elections. These methods serve their purpose in clearly showing who has won the Electoral College vote and highlighting key areas within each state that have contributed to the victory. In this case use of political geographies is quite useful. However, this has led to the map “area bias” at both the county and state level.

This occurs when the variables of interest, such as votes, are not mapped directly but a land area is filled in as a proxy. For election maps these tend to be states and counties. Combined with this issue the use of only two categories Obama vs. Romney winning or losing a state has contributed to the false dichotomy of red state/blue state America. So the mountain states like Montana or plains states like South Dakota seem to hold a larger visual weight than Pennsylvanian even though Pennsylvania is much larger, over 12 times the population of these states, and has over 6 times the numbers of electors. On election night I was at a DC digital week event and the person next to me remarked that it looks like Romney has one Florida because of all the red counties.

Looking at the top county map we used three categories for each candidate: close results less than 10 percent, a moderate win 10 to 40 percent, a very large win greater than 40 percent. We have moved from red state to red county but it looks like a Romney win visually. This map shows a seeming giant stream of support for Romney not in the south but the prairies and mountain west into Nevada. Visually that is what dominates the story. The color schema helps limit the negation the voters on the losing side but the complexity of voter patterns is still simplified.

The first way to give the viewer another perspective is the cartogram map (bottom map). The counties have been changed geographically to account for their size in total population using this software. Using the same scale we see a different story of large urban areas of Obama support on the coasts and great lakes surrounded by light blue or red suburbs. To give a quick feel, LA county which has about 10 million people is now the same size as Michigan just to the right of Cook County. Montana (just under 1 million people) which looks like it has been pressed down on like the rest of the plain states is closer to the size of DC (both about 650,000 people). Brooklyn and Miami-Dade are about the same size on the cartogram map each with about 2.55 million people and are larger than all but a few counties. The intense Romney support is in small rural counties that have turned into “webs” of support in the interior of the country. The suburbs tend to be more light blue and light red around medium to dark blue urban cores. This map shows the regional, urban, rural, suburban character of the election better than the other top map although certainly not without problems.  Visually as the large dark blue urban areas predominate, it looks too much like a big Obama win more than 3 percent at least. In some counties particularly large western counties the area of analysis does not remotely correspond to the variable of interest, votes, so LA County (and neighbours) might appear filled in but much of it is desert even though 10 million people live in this county. Cook county (Chicago) 5.5 million people is almost completely populated although not evenly. The area bias problem still exists with the cartogram map but the rural bias has been reduced. You can compare this map with a different cartogram color schema here showing the 1932 Presidential election.

The second way to show the votes are with a dot density map. In our map each 2000 votes for either candidate are represented by one dot. This shows a more textured view in urban areas especially in the eastern portion of the United States. It also shows red in heavily blue counties except for places like DC or San Francisco which are all blue on the map and close to 90 percent Obama in real life. One drawback with county level data is in the large western urban counties like Las Vegas in southern Nevada or LA County the dots are too dispersed as the counties are larger than the urban areas. In addition the rural areas seem to disappear into the background, less so east of the Mississippi. Despite these problems it weights the geographic regions well showing that Romney like Obama got most of his votes from medium and large urban areas. It also shows the closeness of the election visually unlike the first choropleth maps and does not distort area like the cartogram map. These three maps together and their relative strengths provide an excellent snapshots of the election for national voting patterns at the county level.

Posted in election, Interesting Maps, voting | Tagged , , , | Leave a comment

Why mapping the US is so difficult

http://imgs.xkcd.com/comics/heatmap.png

Posted in GIS, Interesting Maps | Leave a comment