Chapter 18. Bay Area Blues: The Effect of the Housing Crisis
Introduction
THE HOUSING MARKET HAS RECEIVED A GREAT DEAL OF ATTENTION IN THE MEDIA FOR THE PAST SEVERAL years. From about 2000 until 2006, we watched with excitement and apprehension as prices soared; since then, we've watched them tumble as credit became scarce and foreclosures mounted. In this chapter, we take a closer look at this story by analyzing the sales of half a million homes in the San Francisco Bay Area from 2003 to 2008. What can we learn about the way prices rose and fell throughout a single region and across a wide range of prices?
We begin by describing the data, how we obtained it, and how we prepared it for analysis by restructuring, transforming, cleaning, and augmenting the raw data. As our analysis proceeds, we communicate most of our observations using graphical displays. Along the way, we will also describe some of the tools we use, most of which are freely available. Our main tool is R, a statistical programming and data analysis environment, and we used it at all stages: fetching, cleaning, analysis, diagnostics, and presentation.
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