Jul

21

Glasses part-full and part-empty

Filed Under Sunrise on KGMB9 

As the Hawaii economy cools, one of the most important services I try to provide is a measured view of how good or bad the situation is. In other news stories it often falls to a reporter or commentator to “bottom line it” for you, but in economics many stories are both good and bad.

During the economic boom we so recently enjoyed, home prices soared, which was great if you owned a home whose value was soaring, but for a young couple looking to get into home ownership for the first time, there was nothing enjoyable about it.

Now prices are easing back down, and mortgage rates are still low, so it’s a better situation for that young couple, provided their jobs don’t go away in a downturn. Most jobs won’t go away, so most would-be first-time homeowners are better off now, in a downturn, than before.

Russ wrote a couple days ago accusing me of bias because I “fail to mention” that home prices “are set to crash.” Home prices are not set to crash. Current indications indicate a gentle decline that will leave home owners retaining much of the value they accrued in the boom.

I will go further and say that if the economy worsens to the point where home prices plunge, we will be in an unforeseen situation so dire that falling home prices will be the least of our troubles.

(Interesting tidbit: you would think that realtors would prefer boom times because their sales are easier and their commissions are greater, but while that is collectively true, boom attract a lot of extra people who want to be realtors. In gentle slowdowns, the newsbies tend to go into other work, leaving a clear field for the professionals.)

While I’m mentioned reader responses, check out Makistar’s interesting comments about Canadian tourism and related topics. Maki suggested we’re not new and exciting any more. One day maybe I’ll post some thoughts on the renovation of Waikiki, and what still needs to be done in the paved paradise where I happen to reside.

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