Empire editorial: Fearing both sides of housing market
We can almost always find a good subject for mass hysteria.
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These days, we focus on the plummeting housing market nationwide and the possible dangers of Juneau residents getting trapped in ownership of houses that are worth less than they paid for them.
Just a few years ago, we brooded about the opposite. We feared the seemingly relentless increase in price, and the possible dangers of other Juneau residents getting trapped in their status as permanent renters because houses cost more than they could pay for them.
Given that we've been panicking about two sides of the same coin, perhaps we should relax. Perhaps we should hold off on trumpeting our anxiety and let the market fluctuate.
Sherrie Simmonds, a spokeswoman for the Alaska Housing Finance Corporation in Anchorage, said Alaska won't experience a foreclosure crisis seen in other markets because subprime lenders did not do too much business in this state. That's a relief.
But in 2007, there were 20 foreclosures in Juneau, up from seven each year in 2005 and 2006. That's worrisome.
It's confusing, we admit.
This might seem like a terrifying time to have hundreds of thousands of dollars of debt in Southeast Alaska. Population forecasts show approximately zero growth over the next 30 years, and the economy can seem shaky at times. Then we have periodic shows from politicians such as Rep. Kevin Meyer, R-Anchorage, calling for the capital to move. We have a recent report from Sen. Kim Elton, D-Juneau, saying scores of state jobs have left Juneau in the last 18 months.
Yes, just thinking about it is probably giving home-sellers the heebie-jeebies. After all, who's going to assume a giant mortgage if he or she expects to be shipped to Anchorage to keep a state job?
What's the reaction? Fear breeding more of itself. We think the reaction should be tempered a bit.
Maybe real estate prices will drop, as they are predicted to do in many other regions of the nation. As painful as it might be for someone looking to sell right away, a market correction might actually help lessen some of Juneau's problems. Maybe young people could afford to buy a house and consider contributing to the Southeast economy in a broader way if they weren't blocked out by prohibitive cost. A great home purchased at a reasonable price would give young people incentive to stay in what some may perceive as a stagnant place.
Across the nation, economic talking heads are saying a recession may be on the way. Fed Chairman Ben Bernanke just vowed to lower interest rates, if necessary. The housing market may get worse before it gets better, experts say.
As we enter this new turn in the cycle, let's remember the hysteria of days past. That feeling doesn't seem to go away, it just transfers from subject to subject.
Perhaps we can take comfort - a strange comfort - in knowing we'll be panicking about something entirely different soon enough.