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Can these home price trends predict the next NFL champion?

 

Boston

It’s that time again--the start of a new year, snow storms, colder temperatures and the NFL playoffs. This year’s playoff teams are from a very diverse group of housing markets from all across the country.

There are an untold number of oddsmakers and prognosticators that purport to be able to pick the ultimate winner of the NFL's highest prize. But is there any specific relationship between home prices, mortgage rates and success in the NFL? Of course not. However, it's fun to forecast the winner of Super Bowl LII based off certain housing market characteristics.

Back in 2013, we picked the Super Bowl winner based on which market had the highest average mortgage rates. Based on that criteria, our pick (the Seattle Seahawks) took home the Lombardi trophy. In 2014, we  selected our winner based the metropolitan area market with the highest home prices in each head-to-head matchup. Ultimately, this predicted that New England would be the winner... which turned out to be correct, too!

Although we skipped the last couple of years of predictions, we decided to give it another go for this year. In years past, we waited until the wild-card round had completed before making our selections, but for the 2017-2018 playoff season, we thought we would mix it up a bit and include those games.

Just to be different, we've also changed the methodology we use to determine outcomes. For this year's picks, we'll use third quarter 2016 to third quarter 2017 home price appreciation for existing single-family homes as a reference. But as a twist, we'll swap our criteria from round to round.

For the Wildcard round, we'll pick teams whose markets had higher home price appreciation over the last four quarters; for the Divisional round, we'll choose markets with the lower year-over-year appreciation. Then for the Championship round, we'll switch back to higher and will then pick the market with the lowest annual appreciation as the Super Bowl winner.

The high-low, high-low winner? The New England Patriots win it all over the Minnesota Vikings. Currently, the Pats are the odds-on favorite with 2 to 1 odds of winning; Minnesota's odds are double this at 4 to 1.

Just for kicks, how about a reversal of the above method of choosing a winner -- wildcard round winner with the smallest year-over-year home price appreciation, then divisional higher, championship lower, Super Bowl higher?  

The low-high, low-high winner? The Atlanta Falcons best the Pittsburgh Steelers for the title. Based upon the odds, this would be a bit of a longshot, with 20-1 Atlanta overcoming 4.5 to 1 Pittsburgh, with the highest-ranked teams knocked out along the way.

On a straight-up basis, where the matchup would be determined by the markets in each conference with the greatest year-over-year home price appreciation? This would see the Los Angeles Rams (10.1% y-o-y) defeat the Buffalo Bills (9.1% y-o-y). This would be a 12-1 shot beating a 100-1 shot... but anything can happen in the playoffs!

For our pick, we'll choose the first group, the high-low-high-low method. See how the round by round matchups stack up on the second to last slide!

1/8/18 Update: Wow. After Wildcard weekend, we sure wish we had picked the low-high, low-high version of each pairing, as the winner in all four contests had lower annual home price increases than did their opponent. On to the next round!

1/15/18 Update: Even though all the opponents from the first round weren't as expected, outcomes for the second round were pretty close to our expectations, where 75 percent of our home-price picks from the Divisional round are moving on to the AFC and NFC Championship games. One got in with a last second miracle!

  • Median-home price: $464,100
  • Price increase, Q316 to Q317: 6.6%
  • Mortgage rate: 4.01 percent
  • Homeownership rate: 57.5 percent
  • Required salary to afford median-priced home: $97,465.24
  • Average ticket cost: $130.73
  • Stadium name: Gillette Stadium
  • Last time in playoffs: 2016 season
  • Last time Super Bowl winner: 2016 season
  • Current odds: 1/2/18 - 2 to 1
  • Updated odds 1/8/18 - 1.75 to 1
  • Updated odds 1/15/18: 1 to 1

1/15/18 update: On to the Championship round. We thought that the Pats would be moving on, but that the opponent they faced to do so would be different. Like their local housing market, New England continued to efficiently move forward with a solid performance all around, and a 6.6% annual price gain bested the 1.9% of the Nashville metro. New England's next opponent has also seen strong gains and could be an unpredictable challenger.

  • Median-home price: $146,000
  • Price increase, Q316 to Q317: 4.3%
  • Mortgage rate: 4.01 percent
  • Homeownership rate: 74.0 percent
  • Required salary to afford median-priced home: $35,205.49
  • Average ticket cost: $93.56
  • Stadium name: Heinz Field
  • Last time in playoffs: 2016 season
  • Last time Super Bowl winner: 2008 season
  • Current odds: 1/2/18 - 6 to 1
  • Updated odds 1/8/18 - 5 to 1

1/15/18 update: Eliminated. Despite a heroic effort by Ben Roethlisberger (469 yds, 5 TDs) the Steelers came up short in a high-scoring shootout. We thought that Pittsburgh's steady price gains would overcome the higher-flying Jacksonville metro, but the Jags are nearing a full recovery from a period of malaise, just the same as its home real estate market, and that proved too much for the Steelers and a market that really didn't boom or bust over the last decade.

  • Median-home price: $232,000
  • Price increase, Q316 to Q317: 5.9%
  • Mortgage rate: 4.01 percent
  • Homeownership rate: 63.5 percent
  • Required salary to afford median-priced home: $51,020.85
  • Average ticket cost: $63.36
  • Stadium name: EverBank Field
  • Last time in playoffs: 2007 season
  • Last time Super Bowl winner: Never
  • Current odds: 1/2/18 - 20 to 1
  • Updated odds 1/8/18 - 16 to 1
  • Updated odds 1/15/18 - 9 to 1

1/8/18 update: On to the Divisional round. Eleven years ago, home prices here were at peak and the Jags made the playoffs. Both the housing market and the team saw difficult times since then, but a steady recovery in home prices in recent years and improving fortunes on the field sees the Jacksonville market and the Jaguars approaching peak levels of success.

1/15/18 update: On to the Championship round. A usually defensive-minded Jaguars team gave up 42 points, had an unexpected offense breakout, putting up 45 points on the day. Jacksonville had Pittsburgh's number twice this year, but the numbers here saw Jacksonville's 5.9% price gain best Pittsburgh's 4.3% rise. The Jags will probably need a return to form to continue toward the Super Bowl.

  • Median-home price: $197,800
  • Price increase, Q316 to Q317: 5.2%
  • Mortgage rate: 4.01 percent
  • Homeownership rate: 62.8 percent
  • Required salary to afford median-priced home: $44,616.20
  • Average ticket cost: $73.79
  • Stadium name: Arrowhead Stadium
  • Last time in playoffs: 2016 season
  • Last time Super Bowl winner: 1969 season
  • Current odds: 1/2/18 - 16 to 1

1/8/18 update: Eliminated. An unsustainably hot start for the Chiefs gave way to a cold streak which ended their season. It's a good thing for homeowners in the Kansas City metro area that home prices aren't following suit, where prices remain hot and are almost 21% above last decade's "boom time" peaks.

  • Median-home price: $243,300
  • Price increase, Q316 to Q317: 1.9%
  • Mortgage rate: 4.01 percent
  • Homeownership rate: 68.8 percent
  • Required salary to afford median-priced home: $47,433.50
  • Average ticket cost: $67.15
  • Stadium name: Nissan Stadium
  • Last time in playoffs: 2008 season
  • Last time Super Bowl winner: Never
  • Current odds: 1/2/18 - 100 to 1
  • Updated odds 1/8/18 - 40 to 1

1/8/18 update: On to the Divisional round. Home prices in the Nashville market has been on a hot streak for a number of years, powering though the troubles of the last decade. The Titan's running game did much the same, pushing forward steadily in an adverse climate to continue to advance.

1/15/18 update: Eliminated. The Titans did what they could, but the Patriots just continued to do what they do. Although we thought that a lower-appreciating market would move on in this round, the 1.9% year-over-year growth rate was the least of the AFC teams and couldn't overcome the relentless and solid pace of the Boston metro area.

  • Median-home price: $151,600
  • Price increase, Q316 to Q317: 9.1%
  • Mortgage rate: 4.01 percent
  • Homeownership rate: 65.4 percent
  • Required salary to afford median-priced home: $41,648.23
  • Average ticket cost: $88.18
  • Stadium name: New Era Field
  • Last time in playoffs: 1999 season
  • Last time Super Bowl winner: Never
  • Current odds: 1/2/18 - 100 to 1

1/8/18 update: Eliminated. Buffalo's first foray into the playoffs since before Y2K didn't go well. Normally a market where home prices grind it out (not having boomed or busted in the last decade), it may be that success (for home prices or on the gridiron) is something that will take some getting used to.

  • Median-home price: $239,900
  • Price increase, Q316 to Q317: 1.7%
  • Mortgage rate: 4.01 percent
  • Homeownership rate: 63.9 percent
  • Required salary to afford median-priced home: $56,194.50
  • Average ticket cost: $98.69
  • Stadium name: Lincoln Financial Field
  • Last time in playoffs: 2013 season
  • Last time Super Bowl winner: Never
  • Current odds: 1/2/18 - 10 to 1
  • Updated odds 1/8/18 - 12 to 1
  • Updated odds 1/15/18 - 7 to 1

1/15/18 update: On to the Championship round. In the battle of the birds, the Eagles overcame the Falcons despite having the weakest year-over-year growth in home prices of the remaining markets. We thought a lower market would beat a higher one in this round and expected to see the Eagles moving on.

  • Median-home price: $257,800
  • Price increase, Q316 to Q317: 7.3%
  • Mortgage rate: 4.01 percent
  • Homeownership rate: 68.4 percent
  • Required salary to afford median-priced home: $56,245.56
  • Average ticket cost: $91.67
  • Stadium name: U.S. Bank Stadium
  • Last time in playoffs: 2015 season
  • Last time Super Bowl winner: Never
  • Current odds: 1/2/18 - 4.5 to 1
  • Updated odds 1/8/18 - 3.5 to 1
  • Updated odds 1/15/18 - 1.75 to 1

1/15/18 update: On to the Championship round. Case Keenum and the Vikings continue an improbable run to the title. Solid play and solid home price gains don't necessarily go hand in hand, but a 7.3% year-over-year rise and perhaps more than a little bit of luck to best the Saints were enough to see them moving on.

  • Median-home price: $595,100
  • Price increase, Q316 to Q317: 10.1%
  • Mortgage rate: 4.01 percent
  • Homeownership rate: 46.6 percent
  • Required salary to afford median-priced home: $115,068.77
  • Average ticket cost: $72.71
  • Stadium name: Los Angeles Memorial Coliseum
  • Last time in playoffs: 2004 season
  • Last time Super Bowl winner: 1999 season
  • Current odds: 1/2/18 - 10 to 1

1/8/18 update: Eliminated. Perhaps in a case of too much success, too quickly, the upstart Rams got worn down by a steady, experienced Atlanta team. Home prices in the Los Angeles market surged again this year with a leap large enough to push the market back to a "fully recovered" level, but perhaps a more sustainable trend of greater success will come next year.

  • Median-home price: $204,300
  • Price increase, Q316 to Q317: 4.01%
  • Mortgage rate: 4.01 percent
  • Homeownership rate: 57.6 percent
  • Required salary to afford median-priced home: $44,131.30
  • Average ticket cost: $91.25
  • Stadium name: Mercedes-Benz Superdome
  • Last time in playoffs: 2013 season
  • Last time Super Bowl winner: 2009 season
  • Current odds: 1/2/18 - 10 to 1
  • Updated odds 1/8/18 - 6 to 1

1/8/18 update: On to the Divisional round. Home prices in the the Big Easy metro area may not currently be as high-flying as the Saints passing game, but both were certainly strong enough to see New Orleans on fine footing as it moves deeper into the playoffs.

1/15/18 update: Eliminated. An improbable ending to a remarkable game saw the Minnesota Vikings pull off a last-play, last-second win against the Saints. New Orleans' annual gain of 6.8% was overcome by Minneapolis' 7.3% lift for the year; overall, there was not much of a difference between the two, but just enough, even as one single play can change the outcome of game.

  • Median-home price: $233,300
  • Price increase, Q316 to Q317: 8.0%
  • Mortgage rate: 4.01 percent
  • Homeownership rate: 62.8 percent
  • Required salary to afford median-priced home: $47,467.51
  • Average ticket cost: $79.04
  • Stadium name: Bank of America Stadium
  • Last time in playoffs: 2015 season
  • Last time Super Bowl winner: Never
  • Current odds: 1/2/18 - 25 to 1

1/8/18 update: Eliminated. Third time wasn't the charm for the Panthers, as the Saints beat them in all three matchups this year. Oh well. At least homeowners in the Charlotte metro are can gloat about winning the home price appreciation battle over the last year.

  • Median-home price: $204,300
  • Price increase, Q316 to Q317: 6.7%
  • Mortgage rate: 4.01 percent
  • Homeownership rate: 61.8 percent
  • Required salary to afford median-priced home: $43,388.44
  • Average ticket cost: $78.83
  • Stadium name: Mercedes-Benz Stadium
  • Last time in playoffs: 2016 season
  • Last time Super Bowl winner: Never
  • Current odds: 1/2/18 - 20 to 1
  • Updated odds 1/8/18 - 7.5 to 1

1/8/18 update: On to the Divisional round. Mimicking the Atlanta metro's steady and balanced improvement in home prices produced success for the Falcons, who bested a high-powered Rams team in a local housing market where both may have run a little too hot to produce sustainable success.

1/15/18 update: Eliminated. The Falcons failed to get the better of the Eagles, and are returning home to watch the remainder of the playoffs. Even though they didn't achieve the success they hoped for, the Falcons can at least boast that home values in their market are on a superior path.


Click to enlarge

Sources:

  • Median-home price: National Association of Realtors
  • Price increase, Q316 to Q317: National Association of Realtors
  • Mortgage rate: Freddie Mac PMMS
  • Homeownership rate: Census Bureau
  • Required salary to afford median-priced home: HSH.com
  • Average ticket cost: TeamMarketing.com
  • Stadium name: Google search results
  • Last time in playoffs: pro-football-reference.com
  • Last time Super Bowl winner: pro-football-reference.com
  • Current odds: vegasinsider.com
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