Dating Apps Play Significant Role In Income Inequality. That Probably Helps Explain Rise In Luxury Products, Like Housing.

September 16, 2024
  • Half Of Income Inequality Is Attributable To Dating Apps Since The Mid-90s
  • App Usage Correlated To Emphasis On Luxury Real Estate
  • Many Housing Markets Saw Greater Gains In Luxury Prices Over Remainder

At least half the increase in income inequality since 1980 is attributable to the proliferation of dating apps used to find a partner. The greater focus on income and skills comes from app users choosing someone more like themselves, creating a broader spread in household income. Dating apps began to be accepted by a wider audience by the mid-1990s, whose impact on income inequality is correlated in the following chart.

Source: Bloomberg

Luxury As An Economic Category

Luxury brands have been booming for years and have even expanded their footprint to non-luxury brands.

“Luxury brands have shown exceptional resilience during financial crises and steady growth over the last several decades. To keep the momentum, some of the biggest brands are tempted to expand even further and explore new categories.”

Luxury brands have expanded to younger customers. According to a Federal Reserve Bank of St. Louis blog post that analyzed the new white paper:

“because people have increasingly been marrying someone more like themselves, that can account for approximately half of the increase in household income inequality between 1980 and 2020.”

The St. Louis Fed said in a 2019 paper that:

“the percentage of married couples who met online went from only 2% in 1998 to 20% in 2008 and then to nearly 50% in 2017, becoming the dominant form of initial contact for couples who marry.”

The September 2024 “marriage sorting” white paper showed that “females, and to a large extent males, became more selective on income, skill and age, but less selective on race and education.”

Manhattan Luxury Real Estate Prices Have Outpaced The Overall Market

I define the luxury market as the top ten percent of all sales so that the non-luxury market would account for the remaining 90% of all sales. Over the past decade, luxury housing prices in Manhattan rose at a higher rate than the overall market. In another analysis, I took a look back at the average sales price in 2Q 1996, when dating apps burst onto the scene, and compared it to 2Q 2024. Average sales price grew at almost twice the rate during the 28 years of comparison, as indicated below:

  • Manhattan Luxury Average Sales Price 2Q96 +595.9%
  • Manhattan Non-Luxury Average Sales Price 2Q96 +327.9%

Other Markets I Cover – the start date is based on how far back my data goes:

  • Palm Beach Overall Median Sales Price 2Q11 +175.9%
  • Palm Beach Luxury Median Sales Price 2Q11 +464.4%
  • Los Angeles SF Median Sales Price 4Q13 +77.7%
  • Los Angeles SF Luxury Median Sales Price 4Q13 +169.8%

Final Thoughts On Luxury Correlations With Swiping Right

Incidentally, the average high-net-worth individual owns 3.7 homes.

It’s tough to go back to the mid-90s when dating apps started to catch on, but Zillow has a pricing analysis that shows how the top-tier market outperformed the remainder from the mid-1990s to 2015.

I’m not suggesting that luxury housing prices consistently outperform the balance of the market. Instead, I am conveying the idea that wealth creation and growing income inequality have become more of a thing over the past couple of decades than they were in the previous couple of decades. We now have research that indicates dating apps exacerbated income inequality, so it’s just a hop, a skip, and a jump to infer that dating apps created a greater emphasis on “luxury” real estate.

Ironically, Zillow and its app have been a favorite housing market tool since 2005 to find that perfect match.

Even though dating apps to luxury housing market obsession is more of a correlation-over-causation analysis, sometimes you’ve just got to accept it.

Some Final Words About Appraiserville

I was speaking to a friend today who told me I had left my loyal Appraiserville readers hanging by not explaining what’s next. My sincere apologies. After I pivoted to a daily one-topic format here a few months ago, I began to build an Appraiserville site on Beehive but found that my heart wasn’t in it. After all, I had spent the last eight years shining light on my appraisal industry, especially the two flawed institutions that dominate residential real estate appraisers’ professional lives with real impact. As it turns out, The Appraisal Institute and The Appraisal Foundation exposed appraisers to criticism through their lack of action.

Here’s my reality. Eight years and over 400 Appraiserville posts is a lot of personal time committed to calling into question the behavior of the leadership within the appraisal industry. Consistent with the actions of bullies, take a note from JA’s new book “Old Man Angrily Pumps Fists At Clouds While Explaining AI” and his recent claim HE stopped Appraiserville despite never contacting me (he’s terrified of both me and transparency). LOL. I feel good about my contribution to the industry and the awareness I’ve helped create with the help of others, especially getting the attention of the media, CFPB, ASC, HUD, and legal authorities. And I’ll still be working behind the scenes, as I did recently with this excellent deep dive on both the appraisal industry and TAF with Bisnow. But it’s time for me to focus more on other endeavors too, writing daily instead of weekly missives via Housing Notes (with all kinds of new content planned) and several new projects, one being part of the imminent launch of a national housing startup I’ve been involved with for the past 4.5 years. More on those things soon, so I’ll definitely see you later.

Roc360 Webcast 9/18: Tackling Big Problems in Residential Real Estate with Jonathan Miller

Join Eric Abramovich, Brandon Dunn of Roc360, and Jonathan Miller of HousingNotes for an in-depth and insightful discussion on the ever-changing residential real estate market.

You can sign up here for the September 18th event.

Monday Mailboxes, Etc. – Sharing reader feedback on Housing Notes.

September 11, 2024 9/11 Was 23 Years Ago, But Sometimes It Feels Like Yesterday

  • I bet every Appraiser has a 911 story. This could become a thing, actually! I was in Miami- I had an appraisal very early in the morning. It must’ve been 830 and it was in the Doral area. I’m sure this won’t be fit to print, but I know I can share it with you. Doral is also known as Doralezuela, because of all the Venezuelans that live there. That’s what they call it in Miami. I had an appraisal early in the morning and I remember exactly how the morning sun looked, and I was listening to NPR as I was driving, I knew something had been going on about a plane hitting  a building, but then it started to get weirder as I was driving. I got to the gate of the condo and I looked at the guard and I said “what is going on?” And he looked at me like we were both trying to figure it out. Something was definitely going on. I went to my designated appointment and showed up on time. I knocked on the door, and the guy that opened the door had just had a facial peel. His skin was glowing and translucent, and it was full of Vaseline and it was very surreal. I barely said a word to him, but all I said was where’s your TV? (oh yeah, I did introduce myself as the Appraiser.) He and his wife were there, we sat on the edge of their bed (like I had known them my entire life, but all I did was walk in their house and sit down in front of the TV ) and we’re just watching the TV and the second tower was hit. At that point, I got scared and called my mother. I honestly couldn’t tell you how long we watched TV but, I remember the homeowner looking at me with his Vaseline covered face and saying “how does it feel” ?? And I was trying to understand what he was saying, but, he obviously did not feel like he was a part of the United States. He was completely outside, an outsider , like waaaay outside, asking me how I felt about being attacked on US soil. Nothing bad happened at the assignment . I finished my inspection in a professional manner- or at least a manner that felt appropriate for the day. I went on my merry way. But it was a very surreal experience. So sorry you got to bear witness to the twin towers Jonathan! I’m glad you and your family are OK. I bet there’s a lot of old Appraiser stories on where they were when 911 happened! What a humbling day indeed. 🙁

Did you miss yesterday’s Friday’s Housing Notes?

September 13, 2024

It’s Friday The 13th, But Finally, After 2.5 Years, There Is Favorable News For The Housing Market – What’s The Catch?

Image: ChatGPT

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