I was speculating on Twitter recently about why Iowa, according to mid-October polls, was still leaning toward Obama for President when much of the Midwest was beginning to tilt toward Romney. My gut reaction was to say that Iowa’s economy has not taken the major hit on key measures that the rest of the country has taken, and since Romney is essentially running on the economy, we don’t feel the same sense of urgency as our neighboring states.
I decided to do a little research to see if the facts would bear out my hunch. Using the metrics of unemployment rates, home value trends, and the cost of living index (COLI), I’ve compared Iowa’s figures nationally and to the state of Michigan – an unscientific selection, to be sure, but a Midwestern state which my gut tells me has had a pretty rough time economically speaking.
Here’s what I found.
1. Unemployment – Iowa’s unemployment rate is low compared to both national and Michigan figures. We started 2008 at 3.9%, peaked at 6.3% in January 2010, and ended September 2012 at 5.2%. Michigan started 2008 at 7.1%, peaked at 13.8% in January 2010, and ended September at 9.3%. Nationally, the US started 2008 at 5%, peaked at 10% in November of 2009, and ended September 2012 at 8.1%.
2. Home values – I know that Iowa’s home values took a big dip in 2009, because we bought a new house in the capital city of Des Moines in late 2008. The seller took a bath in our low-ball offer and myriad demands for repairs, closing costs, etc. (to the point where I felt kinda bad, but, oh well)… and I remember after the holidays that year saying, “Looks we got this place just in time.”
I didn’t immediately find 2008 data, but in September, 2009 the Iowa average home value was $134,900; as of September, 2012 we’re at $149,500. In Michigan the 2009 year-end average home value was much lower than ours at $99,100; they are currently $109,700. Both of these are showing slow upward trends. It’s hard to compare this to national numbers because so many states have significantly higher costs of living than Iowa or Michigan. But in September 2009 the national average home value was $221,024 and as of January 2012 it was $204,187. Of the three (Iowa, Michigan and national), the US number is the only one that didn’t creep upward between 2009-2012.
3. Cost of Living Index (COLI) – The cost of living is measured as a percent against the national average, expressed as 100. Iowa and Michigan are virtually equal in cost of living figures, with Iowa at 89 percent of the national average and Michigan at 88 percent.
Analysis: While it costs just about the same to live in Iowa as it does in Michigan, with a few variances in certain product/service categories, home values are lower and unemployment is almost double in Michigan. Nationally, the COLI in Iowa means our average home values are lower than the national average, but unemployment is significantly lower. These statements bear out the notion that Iowa has not had the major economic problems that have plagued other Midwestern states.
While Fall polling consistently showed Obama leading Romney in Iowa, an October 19 poll by Public Policy Polling actually showed 49/48 favoring Romney. If that polling becomes a trend, then debate-filled October will have been a very significant month indeed.