A few people I know asked me about housing in the Grand Forks area this last week. I haven’t talked about it lately so I thought it would be good to put up a chart.
The local housing market in Grand Forks will soon be a major topic again with new findings released. I will wait to pass final judgement until research design is clear and we can evaluate methodology. There are a few things we should repeat so they are clear.
Well the grading for Spring is done and Summer term started. So I will (hopefully) have more time to post. And what better place to start than with housing! Why? Mostly because I do not like to talk about it, but it seems that everyone wants to call into the Jarrod Thomas Show and talk about it. So let’s think about this issue again.
I know, I know. I say I don’t like to talk about housing and here is another post about housing. One of the reasons I dislike talking about housing is that so little of the debate is grounded in any fundamentals. It is a discussion of one person’s opinion about what should happen or how the world should be versus that of another. The one thing these people usually agree about is they don’t like my opinion. C’est la vie. Moving on…
A few listeners brought up the issue of housing prices in Grand Forks, which as we all know is just my favorite topic. I thought that it would be important to discuss again for a few reasons. (This is likely a longer post, you might want to get out now.)
I borrowed the National Association of Realtors Housing Affordability Index calculation (formula available here) to look at Burleigh, Cass, and Grand Forks county housing data. The NAR published by metro area and year, but the latest release does not include Grand Forks. I assume that is a data availability issue.
I thought I would switch focus a little bit on the housing issue. The discussion largely is a matter of price and availability. As I mentioned before, we really do not have a large number of sales that give us the ability to suggest markets are working well at any given time in most housing markets. That does not mean we automatically assume a market failure though.
So I am jumping ahead a bit. There is much more to discuss as far as the implications of home price increases. I just read a fantastic article that correlates home price changes with changes in local fertility rates and so will look at Grand Forks in those terms too. However, the question was asked, by a friend of this website, why are we seeing all this about home prices?
A proper investigation of issues in housing requires a look beyond the price. As I mentioned, price can be indicative of an issue, but is not the source or cause of the issue. In the same way your sore throat may be caused by a sinus infection, if you fail to look for the root cause you may treat the condition inappropriately.
The recent GF Herald article about housing prices brings to the forefront an issue with housing price calculations. The Herald used index numbers based on sales, which is problematic. What was the composition of sales in a given month? If there were only high value homes there could be sample issues. Also, when you attempt to make a comparison between two areas you have a double issue with the inconsistency of samples.