Do blue states appreciate more than red states?

[Austin Wolff]

I was curious, so I looked at 20 years of Zillow data.

Growing up in Los Angeles, I always believed a saying that investors here seem to repeat: blue states appreciate more than red thanks to things like zoning restrictions and certain democratic policies (which is an entirely different topic I won't be delving on here).

For anyone that didn't know, here is a map of each state's electoral voting history (for the previous 5 elections):

Here is a heat map of 10-year price growth by state:

At first glance, it appears the majority of states with the most growth were the "pandemic boom states" like Idaho, Nevada, Tennessee, Georgia, Utah, and Florida. All of these states voted red in the 2024 election. (Surprisingly, the blue states of Maine and New Hampshire did see solid growth, along with the not-so-surprising Washington.)

But what about their growth over a longer time horizon?

(Zillow didn't have 2005 data for Montana or North Dakota.)

I can maybe see a case being made for Washington and Oregon. But Idaho, Utah and Tennessee also saw big price growth over the same time period.

To settle this debate, I simply calculated the correlation between each state's growth and the categorical "red' or "blue" variable. The correlation coefficient came in at 0.03. Basically, there doesn't appear to be any relationship between a state's voting history and its price growth.

Just because a state is blue doesn't mean it will automatically benefit from price growth. Things like job growth and supply constraints affect price much more than its residents' voting patterns. 

[Austin Wolff]

Quote from @Bradley Buxton:

@Austin Wolff

Are you looking at the percentage growth or actual dollar growth?  If you're talking about a 50k house to 100k that's 100% growth. In California, you can go from 500k to 800k over the same period and the difference is 37.5% or 300k. So which is better? 

 I think it's more of a coincidence that states along the coast vote blue and there is more appreciation. More people have always lived there because of the history of economic development near the oceans coupled with tight supply and limited high-density 
building. People buy where there is opportunity, better weather, and near family and friends. 

Economic factors like taxes, new investments in manufacturing, and politics is apparently driving people to states like TX and FL. Up here in the Reno, NV area we are seeing strong population growth from CA because of tax advantages and a different political climate than CA while still close to friends and family from CA. 

 Great question, I'm just looking at percentages. I think that matters more than absolute dollar amount and here's a theoretical example to show why:

Let's say I have $200k to invest. And my options are: 

-One $800k property in CA (25% down), or

-Two $400k properties in ID (both at 25% down).

If we take the 2015-2020 5-year appreciation (so as not to include the roller coaster and unlikely 5-year market we experienced from 2020-2025) for each state, the CA property would see an average appreciation of 37%. Your property would appreciate from $800k to $1.096M. That's a $296,000 gain for investing in CA.

Meanwhile, if we take the 2015-2020 5-year appreciation that Idaho experienced before the pandemic (62%) and apply that to the 2 properties you were able to buy with the same $200k, both properties would appreciate from $400k to $668k. That's a $268,000 gain per property, or, a total equity gain of $536,000 (which is higher than the CA property's equity gain of $296,000).

This is a theoretical example using gross approximations, but hopefully it displays the point that percent-growth is still more important than total value growth.

And you're also right about it being a coincidence that certain states are blue and experience high appreciation. Technically, all major cities still vote blue (even if they're in a red state), yet it appears that only cities with supply constraints (like geography) see the most appreciation. 

My (unrealistic) goal is for this post to put this debate to rest. Blue or red, it really has no effect on the appreciation. Things like job growth and supply constraints do.