I’ve noticed that some of my fellow Realtors® blame the news media for much of the real estate slump. They especially seem to blame the media for spreading bad news–about real estate and other areas of the economy–and thereby scaring buyers and sellers.
It’s true that the media tend to sensationalize the news. And there’s no obligation for the media to print just good news, or to shine a light on the silver lining of a black storm cloud.
Much of the problem, though, is that there are a lot of bad economic and social developments, and these get reported. That’s the nature of news.
A couple of days ago, I spent about 15 minutes on Google going through the news headlines. Now, advocates of “everything is just great out there, but look at the depressing news coverage” will find this fodder for their arguments. Yes, here is a collection of bad news. But the publications aren’t making this stuff up. Here’s a sampling:
Chances jump of rate hike as early as August
MarketWatch – 5 hours ago
By Laura Mandaro SAN FRANCISCO (MarketWatch) — Futures traders increased their bets that the Federal Reserve would hike interest rates as early as August, …
Ford shareholders flock to Kerkorian tender offer
guardian.co.uk, UK – 4 hours ago
By David Bailey DETROIT, June 10 (Reuters) – Ford Motor Co investors, reflecting pessimism over its near term prospects, responded to billionaire Kirk …
Trade deficit jumps to highest level in 13 months
The Associated Press – 8 hours ago
WASHINGTON (AP) — The trade deficit jumped to the highest level in 13 months in April as America’s bill for foreign crude oil soared to an all-time high. …
Government steps up review of oil, commods price surge
Reuters – 1 hour ago
By Joanne Morrison and Tom Doggett WASHINGTON (Reuters) – US regulators stepped up their efforts on Tuesday to determine why prices for oil and a range of …
McCain questions Obama VP advisor links to Countrywide
Bizjournals.com, NC – 20 hours ago
Republican presidential nominee John McCain is making an issue of Democratic rival Barack Obama’s selecting former Fannie Mae CEO Jim Johnson as part of …
Bush Urges Congress to Approve War Funding
Voice of America – Jun 7, 2008
By Scott Stearns US President George Bush wants $178 billion more in military spending to help pay for wars in Afghanistan and Iraq. …
Asia Day Ahead: US Stocks Slump on Jobless Rate, Oil Surge
Bloomberg – Jun 8, 2008
June 9 (Bloomberg) — US stocks tumbled, sparking the Dow Jones Industrial Average’s worst sell-off in 15 months, after a jump in the unemployment rate and …
US Third-Quarter Hiring Plans at 5-Year Low, Manpower Says
Bloomberg – 16 hours ago
A slowdown in employment is likely to erode consumer confidence and spending, which accounts for more than two- thirds of the US economy. …
US consumer confidence hits record low -IBD survey
guardian.co.uk, UK – 7 hours ago
NEW YORK, June 10 (Reuters) – US consumer confidence sank to a record low in June as a surge in gasoline prices to more than $4 a gallon and a jump in the …
Some reading these items may be tempted to “shoot the messenger” and blame the media. No: These underlying problems are not the media’s fault. They’re serious problems being faced by various sectors of the economy. And these problems aren’t going to go away next week or next month.
Equally important, large segments of the American public are aware of these problems, and that makes them nervous about spending hundreds of thousands of dollars for a home. They go to the supermarket and see the rising price of food, and the shortages of staples like rice. They fill up their gas tank, spending $80 for a tank of $4.25 gasoline. They’re seeing their neighbors lose their jobs. They can’t help but see the boarded-up houses with the auction notices posted in front. They’re not stupid.
And I didn’t even both to search out news stories pointing to the huge overhang of property that are likely to go into foreclosure in the next year.
I’m not saying it’s all doom and gloom. Far from it. From a real estate perspective, interest rates remain good. Prices are lower than they’ve been for the past few years. (Low enough? Hard to say.) People who buy wisely today are very likely to be very pleased 5, 10, or 15 years from now.
But the news media aren’t to blame for today’s real estate problems. (Unless you want to blame them for not reporting the facts 3, 4, or 5 years ago about the impending bubble, and the reasons for it. But that’s the topic of another blog.)