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Earlier today The Economist published the below chart showing where Canada’s immigrants have come from (place of birth) between 1871 and 2011. So basically from Confederation (1867) to today – almost.
It’s a great chart. It really shows our evolution.
Perhaps the most meaningful date to point out is 1962. That is the year Canada introduced new immigration regulations which effectively privileged skill and talent over race and national origin when it came to deciding who would be allowed to enter the country.
Look at the impact that had.
Jeffrey Lin, who is an economist at the Federal Reserve Bank of Philadelphia, recently published the following chart:
I found it in
Just a few days ago, The Federal Reserve Bank of San Francisco published an interesting research study where they argue that this U.S. housing boom is different than that of the early 2000s.
During the last boom, U.S. home prices peaked in 2006 and then dropped about 30% in the wake of The Great Recession. Since then prices have rebounded – almost to their pre-recession levels. This has some people asking whether this story is headed towards the same ending.
“We find that the increase in U.S. house prices since 2011 differs in significant ways from the mid-2000s housing boom. The prior episode can be described as a credit-fueled bubble in which housing valuation—as measured by the house price-to-rent ratio—and household leverage—as measured by the mortgage debt-to-income ratio—rose together in a self-reinforcing feedback loop. In contrast, the more recent episode exhibits a less-pronounced increase in housing valuation together with an outright decline in household leverage—a pattern that is not suggestive of a credit-fueled bubble.”
And here’s the chart:
The chart compares the socioeconomic status in US cities (y-axis) against “distance from city center” (x-axis) in 1880 and then in recent years (1960 to 2010 census data). The orange circles represent the 1880 data and the red and blue lines represent the recent census data.
What this chart and research tells us is that in 1880, rich people overwhelmingly lived in the center of cities. And as you moved further away from the city center, socioeconomic status fell off pretty precipitously. This makes sense given that, at the time, it was hard to get around and travel long distances.
However, in the post-war years, the exact opposite became true. We began driving and wealth decentralized. This should surprise no one.
But what’s interesting is how this appears to be reversing. In 2010 (the red line), there’s a sharp increase in socioeconomic status for people living basically right in the center of cities. And for the 30 - 60 km range, there has been a decrease in socioeconomic status essentially from the 1960s onwards.
The important takeaway here – which is spelled out in the Washington Post article – is that the neighborhoods which appear to be in high demand today are also in very short supply:
“We have 80 years of essentially zero production of neighborhoods with these qualities,” Grant says. “We’ve spent the last 80 years building car-oriented suburbs. Then when the elites decide they want to go back into the city, there’s not enough city to go around.”
This is one reason why supply matters.
Source: Flow of funds, Bureau of Economic Analysis (BEA), CoreLogic, and BLS. Data are seasonally adjusted and indexed to 100 at pre-recession peak.
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