The front page of this morning’s Honolulu Star-Advertiser illustrates the confusion of the media, and the public, over the issue of housing prices.
This story and graphic took up two-thirds of the front page. The sub-head reads: “Sales and median prices for single-family homes and condos all fell for the first time since 2010.”
Slightly lower, or “weakened” prices, add up to a “stumble.”
This, of course, is the view of the real estate industry, which tends to mold news coverage of real estate sales.
The problem is that real estate and “housing” sound like the same thing, but in practice they are very different.
While reporting a slight dip in real estate prices as a “stumble,” the media also give prominent attention to our crisis in housing affordability. From this perspective, a prolonged dip in housing prices would appear to be something to cheer about.
So the news coverage of “real estate,” on the one hand, and “housing” on the other, appear as contradictory and misleading. Some news reports bemoan the fact that Honolulu is one of the most expensive housing markets in the country, while others gloat about increasing “values”.
No one really wants to say it, but this is an example of “haves” and “have nots,” both significant parts of the population, with different interests in real estate and housing. If you own real estate, you are likely cheered up by rising prices. If you don’t own anything, then rising prices are just a reminder that you’re still unable to own a home, or find a reasonable rent.
Perhaps the Star-Advertiser or other media could lead the way in trying to reconcile these divergent ways of viewing the business of real estate and the human reality of housing, although I’m not sure how that can be done.
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What is often (always?) missed in these stories is that the ups or downs reported are prices FOR HOMES/PROPERTIES SOLD DURING THE REPORTING PERIOD – and that therefor are/may not be reflections of the general state of the housing market.
Pet peeve . . .
You are onto something here Ian. Home Sales are essentially a press release from the Realtors Asscociation. That doesn’t make it inaccuratte. But what does it do, it advertises high and rising prices which makes investment in real estate attractive to wealthy individuals. And it leaves out one important statistic, cash sales. These are reported regularly in other area like Miami. This is a sign of what proportion of sales are out of state investors. Real estate investment is about investmentin land. That’s what appreciates, the cost of holding it is property taxes. And they are extremely low here. Increased property taxes would temper or even lower home prices and rents by reducing real estate investment. Thus threatening the livelyhood of realtors. That’s why they formed “affordable Hawaii Pac”. Of $1,072,000 raised $200,000 cam from the National Real Estate Association, $600,000 from the local Chamber of Commerce, $50,000 from an international real estate developer. $41,000 was paid out to kitty LaGretta’s firm. Whom I believe set up the governor’s ad. Yes there are those that make money out high home prices and those that suffer mostly wage earners. The press could rewrite the release and demand that it include cash sales. Then we can better understand the price drop in Condo’s which I suspect is declining sales from out of state investors. That’s based on some clues hidden in the business section. Hunt is having trouble moving new luxury condos overseas. And has reworked some of its project.
That whole font-page chart is confusing. The heading for the first column is “Median,” but that’s actually the number sold.
i would sooner swim with sharks than get involved in the Hawaii real estate market. people in island real estate are permanently desperate for any kind of money, at any cost. they have no soul.
Really? Please, read further.
Slip over to page B-1 of this very same newspaper to a significantly informative article by SA reporter Gordon Pang, entitled “Low-rise affordable rentals plan unveiled” (Star-Advertiser, 2/7/2019).
It most directly addresses specifics to this hideous up-bumping “real estate” side of the brain of this endless Oahu-wide almost Brexit-sized dilemma, versus the here today freshly defined more realistic approaches to “affordable housing” finally slowly taking form at the City level.
Public input on all of these no-drama applications that are mentioned in the article will soon be invited.
Yeah, housing cannot be both affordable and an investment.
https://www.citylab.com/perspective/2018/11/housing-cant-both-be-a-good-investment-and-be-affordable/574813/
Thanks for that link.
Young people want an affordable home, but once they own it, they buy into the real-estate fantasy of the home as lottery ticket. So the problem is not always wealthy individuals, but all of us at different stages of our lives. Also, it’s only really coastal housing that appreciates astronomically, but that kind of real estate is now vulnerable and everyone is in denial.
https://www.theguardian.com/environment/2019/feb/15/florida-climate-change-coastal-real-estate-rising-seas