House Values in Illinois

One of the problems with living in Illinois is that house prices values aren’t going up like they are in some other parts of the country.  But then, with so many people leaving Illinois (Illinois is one of the few states losing people each year), it’s logical.¹  With fewer people in Illinois, there are fewer people looking to buy houses; i.e., demand is lower.  With demand lower and supply staying the same (the houses aren’t leaving, just the people), it’s logical that prices aren’t going up as much as places where population is growing and people want to move.

One of the reasons people are leaving Illinois (and why others aren’t coming or returning) is our lousy state government.  As I have said elsewhere, Illinois has the worst credit rating of any state and has hundreds of billions of dollars of unfunded pension liability, not to mention billions of dollars of unpaid bills.  Why wouldn’t people want to leave – or not come?  Why not get away from that debt?  Why move to that debt?

I was thinking about what that has done to my value of our house.  I have no doubt our home’s value is lower than it would be in a comparable location in a better-run state – or if Illinois was better run.²  But it isn’t, and I am, for various reasons, willing to live in Illinois anyway.

But then I realized:  It’s true my house is worth less because I live in Illinois, with its fiscal irresponsibility.  On the other hand, because of Illinois’s fiscal irresponsibility, my state income taxes for the last couple of decades have been lower than they would have been if the politicians in Springfield had raised taxes enough to pay for all of the promises they made.^3,4  But they didn’t, so that money has stayed in my pocket.  And while my house is worth less because of Illinois’s irresponsibility, my bank account and my investments are higher because I didn’t have to pay the taxes I should have.  So maybe it’s all pretty much a wash – for me.  As for my children who live in Illinois, who are getting the debts without having had the lower taxes, I apologize. 
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¹ See here and here.
² Except that Illinois can’t be better run (or at least it would be very hard).  You can’t expect honest, efficient government in Illinois.  It’s not what we do.  William Allen White said of Illinois:

“Under primary, under convention, under a despotism or under a pure democracy, Illinois would be corrupt and crooked. … It is in the blood of the people.”

(Austin Ranney, Illinois Politics, quoted in Edmund F. Kallina, Jr., Courthouse Over White House: Chicago and the Presidential Election of 1960 {1988}, p.5.)
³ Illinois does have high property taxes, but I doubt they would be all that much lower even if the state income tax was higher.  See footnote 4.
⁴ Obviously, this being Illinois, a lot of government money goes to inefficiency and corruption.  If we had efficient, honest government, the unfunded liabilities wouldn’t be as high and the unpaid bills would be less.  But if we had efficient, honest government, it wouldn’t be Illinois.  See footnote 2.