2008-2012: All State and Metro Real Personal Income and Per Capita Income Data in Excel.

Two recent posts referenced calculations of state and metro real per capita income calculations that I had done for 2008-2012. Those posts included images of two summary tables. 

I have combined all of the related state and metro data into a single Excel workbook HERE (and embedded below) that also includes links to the BEA data that I downloaded.  

The workbook opens to a index page showing all the worksheets in the workbook. (The two worksheets highlighted in red are the summary tables that I posted as pictures in the prior posts).

Posting of this workbook allows other to verify my calculations and do other calculations of interest. 


Originally created and posted on the Oregon Housing Blog.

First Cost of Living Adjustment in Three Years Remains Likely, Will Impact Budget Deficit and Length of Social Security Solvency.

Piece from National Association of Realtors HERE forecasts a 3.5% annual adjustment in cost of living index used to adjust Social Security, SSI, and federal/military retirement pay.  Data out yesterday shows a 3.21% increase for last three months vs July-Sept 2008 data; the actual adjustment amount will be determined by the next three months of data compared to same period in 2008. 

NAR piece also points out that projected increase is larger than is used in current Social Security actuarial assumptions and that change upward would reduce the period of solvency of the SS fund. Similarly, if current budget assumptions used a projection less than projected increase, it is likely the CBO at some point will score the budget deficit higher because of the higher projected increase in the COLI. 

For the many assisted rental tenants receiving SSI or SS this could be the first direct increase in income they will have received in the three years. Rental programs where tenant paid rent is a function of income could see a very minor decrease in subsidy needs (if rent level remained constant) as tenant portion of rent paid should increase by 30% of the COLI % increase. 

Orginally created and posted on the Oregon Housing Blog.

Social Security Currently On Track for Small Cost of Living Increase in 2012.

For the last two years Social Security recipients have not received cost of living increases as the base period (the highest prior 3rd quarter index) for 2008 has been less than the index in the 3rd quarter of 2009 and 2010.  

I calculate that with recent increases in the COLI, if the COLI average for the first quarter 2011 remains the same in the third quarter, Social Security recipients would receive a 1.2% increase. (217.986/ 215.495-1=1.16%, rounded to 1.2%). 

In looking at historical data for every year since 2001 the 3rd quarter COLI index average has been greater than the 1st quarter average, so the likelihood is that there will be an increase and it could be higher than this projection. The publication of the 3rd quarter COLI data will not occur until Mid October 2011 and the increase would not be effective until January 2012. 

As federal employee pensions and disability payments are also adjusted using COLI, any SS COLI increase will have multi billion impacts on the federal budget for FY 2012. The method of COLI calculation in future years seems likely to be included in upcoming budget debates.

Originally created and posted on the Oregon Housing Blog.

Data Sources Used for My Portland Tribune Guest Opinion Challenging Accuracy of Portland Housing Cost of Living Data.

Today's Portland Tribune has a guest opinion from me HERE that challenges the accuracy and applicability of housing cost data used in a Portland Business Alliance study that said, in the City of Portland:

..."Housing was 31.6 percent more expensive [than the national average for all cities surveyed]. Housing is the main cause of the high [cost of living] ranking...”

Below are links to sources for the data that I referenced in the opinion piece: 

1. 5 Year (2005-2009) American Community Survey Housing Occupancy Characteristics for City of Portland
2. Consumer Expenditure Survey 2009, Quintiles of Income before Taxes
3. HUD Housing Scorecard for December (Page 5)
4. March 2010 RMLS Report Portland Metro
5. Marcus and Millichap 1st Qtr. 2010 Portland Market Report (pg. 3)

Originally created and posted on the Oregon Housing Blog.

Wait a Minute: Some BIG Caveats on High "Housing" Cost of Living Index Values Reported for City of Portland.

Recent news stories (like Portland Tribune story HERE) have reported that a recent study for the Portland Business Alliance concluded that Portland had a high cost of living compared to other cities.  

I went back and read the study HERE. About housing, the report states that:

Portland has a high in cost of living...According to C2ER data for the first quarter of 2010, the cost of living in Portland (the city, not the metro area) ranked higher than 84 percent of the cities surveyed... Housing was 31.6 percent more expensive [than the national average for all cities surveyed]. Housing is the main cause of the high ranking...

After reading the report I went to one of the key resources used to draw these conclusions, the ACCRA Cost of Living Index from the Council for Community and Economic Research. 

Problems with Reported Portland HIGH Housing Costs in ACCRA Cost of Living Reports:

Even though the cost of housing may have been measured in a uniform way across cities, the measurement used may be distorting the accuracy of housing costs by focusing on income groups and housing types that are NOT representative of median income/"middle class" households.

1.ACCRA Cost of Living Housing Costs Are Defined as Housing Costs for HIGH INCOME households, and NOT Median Income/"Middle Class" Households: ACCRA methodology states clearly that their COL index " reflects cost differentials for professional and executive households in the top income quintile. Operationally, this standard of living is set by the weighting structure. Home ownership costs, for example, are more heavily weighted than they would be if the Index reflected a clerical worker standard of living or average costs for all urban consumers."
 

2. Housing Costs Are Focused on NEW construction, Large Homes on Large Lots that Clearly are NOT Typical in the Overall Marketplace; Portland Stated Purchase Price of $393,000 is 64% Higher than RMLS Metro Area Median Sales Price YTD.

The ACCRA COL definition for a home ownership unit is: Total purchase price for a 2,400 sq. ft. living area new house, 8,000 sq. ft. lot, 4 bedrooms,2 baths."  According to latest HUD Housing Scorecard new construction home sales represent 6% of all home sales nationally, so the subset of 4 BR 2,400 sq. ft new construction homes on 8,000 sq. ft. lots would represent an even TINIER share of the overall home sales market and even more so in Portland where smaller lot sizes are typical in the marketplace.

For Portland the 1st Qt 2010 ACCRA purchase price is given as $392,967, however the October 2010 RMLS report shows the YTD median sales price of a home in the Portland metro area as $240,000. This means that the stated 1st Quarter 2010 ACCRA given home purchase price for the City of Portland is 64% ABOVE the RMLS median sales price for the Portland Metro area though October of 2010.
 

3. It is Not Clear How Rental Costs are Factored Into Housing Cost Component of Index; Portland Stated Rent of $1,096 May be Overstated by 25%.

Although data for 2 BR, 2 Bath , 950 Sq. Ft apartments are stated for each city in the ACCRA Cost of Living Index it is not clear how those costs are factored into the housing component of the index. (The index data only shows that "housing" accounts for 28.99% of the total Index). Also, Portland's stated rent of $1,026 for the 1st quarter of 2010 is high; a Marcus and Millsap report I had previously linked to HERE indicated asked for Class A apartment rents in Portland during the first quarter, 2010 were $810 per month. If that rent is accurate, the ACCRA 1st Qtr 2010 given rent for Portland of $1,026 would be overstated by 25%.

My Bottom Line: While comparing the cost of living between areas IS important, the housing components of the ACCRA Cost of Living Index have serious flaws that have not surfaced in press accounts, nor are these flaws/limits described in published reports by trade groups and government agencies who use this Housing Cost of Living Index. Because housing costs make up nearly 30% of the total ACCRA Cost of Living Index these flaws call into question the accuracy of the index AND its applicability to middle class /median income households.

P.S. I clearly don't have anything against "professional and executive households" since I once was one of them. I also don't have a problem in comparing the relative costs for those households for different cities. I just think it is very IMPORTANT to note that these stated "Housing Costs" represent a very small share of the market and in NO way represent the "Housing" cost of living for median income /"middle class" households in any of the areas surveyed, including Portland.  

Originally created and posted on the Oregon Housing Blog.