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Home Prices in America's 'Bluest' Metros Surging Rapidly

NEW YORK ( TheStreet) -- Housing has always been a political hot potato in a country where the government has heavily subsidized homeownership.

On Election Day, as voters head to the polls to elect governors in New Jersey and Virginia and new mayors in the cities of New York, Boston and Detroit, online real estate company Trulia offers some fresh analysis on the performance of home prices in "Red" and "Blue" America.

Trulia identified the reddest and bluest metros in the U.S. based on the 2012 presidential elections. Reddest metros were those where candidate Mitt Romney won by the largest margin over President Obama, while the bluest metros were those cities where Obama won over Romney by the widest margins.

Among the top 100, 68 are blue and only 32 are red, by Trulia's definition.

It turns out, in the reddest metros, price gains have typically been much slower than the national average of 11.7%. Only Bakersfield, Calif. saw yearly price gains of more than 15%.

In contrast, seven of the 10 bluest metros saw price gains of more than 15% year-over-year. Four of the six bluest metros are in California: San Francisco, Oakland, San Jose and Los Angeles.

Of course, the blue metros suffered more during the housing crash, so home prices in these metros are rebounding more rapidly.

Also, residents in blue metros have bigger housing issues than red metros. Only 57% of for-sale homes are affordable to the middle class in blue metros vs. 67% in red metros, an analysis of price-per-square foot and median incomes shows.

Also, the unemployment rate is also higher in blue metros at 7.7% vs. 6.6% in red metros.

This dispartity could influence upcoming budget battles according to Trulia. "[T]he politicians representing Blue America will be under more pressure from their voters to fight for policies that could reduce unemployment and make homeownership more within reach of the middle class," writes economist Jed Kolko.

-- Written by Shanthi Bharatwaj in New York.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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