Did the Immigration Protests Burst the Housing Bubble?

Steve Sailer has often called the recession the “diversity recession” due to the concentration of the subprime mortgage market within minority homeowners. The numbers are hard to come by, but the figures that do exist support much of what Steve has said.
I was curious to see what happened at the peak of the housing market and it seems to have coincided with many of the immigration reform protests in the spring of 2006. The largest events were the mass rallies on April 10 and the Day Without An Immigrant on May 1. There were also many other rallies in March and April (here’s a rundown).
Here’s a look at peak price dates for the 20 different metro areas in the Case-Shiller Index. These are the seasonally adjusted numbers. I also included how much the index is down from the peak price to the most recent data point.
Metro…………………………….Peak…………………………..Decline
Boston…………………………..Nov-05……………………….-15.2%
Cleveland……………………….Jan-06……………………….-15.5%
San Francisco………………….Feb-06……………………….-39.5%
Detroit……………………………Feb-06……………………….-44.0%
San Diego……………………….Mar-06……………………….-39.3%
Denver……………………………Mar-06……………………….-8.5%
Washington…………………….Mar-06……………………….-29.2%
Phoenix………………………….Apr-06………………………..-52.6%
Los Angeles…………………….Apr-06……………………….-39.4%
Minneapolis……………………..Apr-06……………………….-29.2%
Las Vegas……………………….Apr-06……………………….-56.1%
Tampa…………………………….May-06……………………….-40.8%
New York…………………………May-06……………………….-19.5%
Miami………………………………Dec-06……………………….-46.6%
Chicago…………………………..Feb-07……………………….-22.8%
Atlanta…………………………….Apr-07……………………….-19.0%
Dallas………………………………Apr-07……………………….-5.3%
Portland…………………………..May-07……………………….-20.2%
Seattle…………………………….May-07……………………….-22.8%
Charlotte………………………….Aug-07……………………….-11.5%
Eleven of the 20 markets peaked between February and May 2006. I’m not saying that the immigration protests caused the housing bubble. That was forming for a long time. The bursting of the bubble’s was long overdue and perhaps the dislocation in the housing sector brought on by the protests impacted the markets. Then, once the slide started, it couldn’t be stopped.
This evidence is very circumstantial but I think the hypothesis has merit. As they say, more research is needed.

Posted by on December 27th, 2009 at 10:47 pm


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