There has been a lot of discussion, criticism and debate about what is going on in the housing market. In fact, the flow of information on the topic has been phenomenal. However, what this debate has garnered, is the need to take sides. Right and wrong. Truth or fiction. Moral or immoral. Be part of the Real Estate Industrial Complex or not.
I have been thinking about this for a while, and its confirmed each week after I post my weekly column Three Cents Worth in Curbed. There are a few commenters who sound pretty smart but seemed obsessed with the idea of taking sides. You are either for or against their position and its personal. However, whatever position you take really has no bearing on anything.
The recent ruling by Chicago City Council to pass a law on the minimal acceptable wages [SunTimes] to be paid by big box stores is a prime example. I lived in the Windy City for a few years when I got out of college and I know how Chicago politicking can get pretty intense. However, the politicians in this issue missed the point. Its not about the morality of Wal-Mart and Target paying a living wage to their employees (which they should), its about economic reality. Raise wages to an unacceptable level, and the companies go elsewhere. Period. Economic forces are not about right and wrong. Businesses go where the money is. Create the right economic environment and they will stay.
Then I happen to read The Stalwart’s excellent post The Market Doesn’t Care About Your Opinion which rings so true with the real estate market.
In a real estate example, take bubble blogs at one end of the spectrum and the National Association of Realtors at the other end.
Bubble blogs can generate a large amount of traffic and the volume of commentary and amount of camaraderie is incredible. Some bloggers will simply post “Have at it” and 200 comments will be posted about every conceivable position about housing bubbles. Everyone seems to have an opinion on the topic of housing bubbles and it can be deeply personal. As an aside, it would be interesting to know if the majority of bubble blogs are run by renters? They seem to be.
The NAR has done a poor public relations job this go ’round with its spin. But as far as spin goes, what do you expect? They are an industry trade group – that’s their function – all trade groups spin. Their spin during the transition from the housing boom was not lower in quality. The process is so much more transparent than ever before that they can not be as misleading as in the past and get away with it. I wonder if they every take their own advice?
However, at the end of the day, to debate whether housing prices are too high or not won’t change anything. That’s right up there with watching the local news and hearing about all the local fires and tragedies that day and then talking to your friends about it.
If housing is less affordable today than 5 years ago, then the argument should not be whether or not this is in fact is fair or moral, etc. Buyers and sellers are not being forced to buy or sell (in most cases) in a higher priced environment.
Real estate markets keep moving up, down or sideways and with that so does affordability. It does not matter what side you are on because the real estate economy does not care.