Alaska's Sky is not Falling... nor are the Home Prices

Today the Anchorage Daily News website posted a short little article with the headline "Alaska's housing prices have dropped the fastest in a year".

Several readers commented on the lack of a basis for this headline, given the story referenced a Bloomberg News article which stated that data for individual states was not provided in the report their article was based on.

This kind of sloppy reporting goes on all the time and it's important to be proactive and point out flaws when you see them, and equally important to back yourself up with data. Internet stuff has a long shelf life.

The newsies at adn.com monitor the comments frequently, and throughout the day, the headline shifted based on what users said, as did bits and pieces of the paragraph-long article. At one point, it was "Alaska's prices fastest dropping, feds say" and it eventually settled on "Alaska included in region where housing prices dropped 14.5 percent.."

In reality, the story in Bloomberg didn't say anything about Alaska. It reported on a report from OFHEO showing that the Pacific Census Division, made up of 4 states - of which Alaska is one, but so is California, posted the highest collective HPI decline.

Here's the final article:

 "Bloomberg News names five states where home prices fell the most from May 2007 to May 2008. Alaska was listed along with California, Washington, Oregon and Hawaii. Collectively, these five states saw a 14.5 percent price drop. The report comes from the Office of Federal Housing Enterprise Oversight, "suggesting no end to the three-year housing slump."

 But even still, the article is wrong. Bloomberg didn't "name five states where home prices fell the most" - true it named those states listed in the article, but muddled it by not stating that the report shows a combined statistic for the region the states are in.

Those states listed are not the ones that have seen the deepest price drops, not by a long shot. So the article definitely gets it wrong.

Some good came out of those readers' comments: the newsies posted an update complete with a quote from Dan Fauske, CEO of Alaska Housing Finance, saying "the average residential sales price for Alaska has declined less than 1 percent, from $275,558 in May 2007 to $273,362 in May 2008."

Less than 1 percent decline, year over year is good news. At least it's better news than the headlines "Alaska included in region where housing prices dropped 14.5 percent.." or "Alaska's housing prices have dropped the fastest in a year".

How many people saw those headlines and didn't read any further? And went on to tell the guy at the gas station, the postal carrier, the grocery clerk, a few folks at the office, a spouse, a friend, a parent?

Just for fun, here's a map showing how many states posted increases from 2007Q1 to 2008Q1, as well as the list of declines and by how much.

Let's start telling some of these good news stories, huh? Montana's index increase was over 15.