Thursday, April 23, 2009
Newspapers not to blame for real estate mess
I've written about residential real estate for more than a decade (and believe me, it seems like longer). Never once, during this time, did I hear a real estate agent thank the media for their help in boosting home sales during the real estate boom of 2001 through 2006.
There's a good reason for that: Newspaper and TV reporters had nothing to do with how many homes were bought and sold during the boom.
Of course, now that home sales are in the toilet, and housing prices are falling lower by the day, I've heard plenty of griping from real estate professionals that the media are partly to blame for the housing mess we're in today.
Newspaper stories and TV newscasts are harping on the negatives about the housing market, agents have told me. They're not telling the whole story. They're not focusing enough on what a great time it is to buy.
Of course, this is all idiocy. The media are no more to blame for the housing mess than they are for that dear old, much-missed housing boom.
The real reason that the housing industry is in such disarray is simple: Housing prices rose too high too quickly. Homes were becoming unaffordable. Housing prices had to go down -- despite what officials with the National Association of Realtors would have you believe. At the same time, the mortgage lending industry, run by just about the sleaziest business people you'd ever want to meet, was passing out money to people who could barely make the rent payments on their two-bedroom apartments every month. These people had no business owning a home and taking on the burden of a monthly mortgage payment. The rising defaults and foreclosures should've come as a surprise to no one.
Real estate appraisrs, too, played their role. They were all too happy to appraise homes for whatever price they needed to hit to have a real estate deal close.
Finally, don't forget homebuyers themselves. How many of them willingly took adjustable-rate mortgages with artificially low interest rates just so they could buy a home they had to have known deep down that they couldn't afford?
In short, everyone' s to blame. But the media? No. The media are focusing on the bad news in the housing industry because there's no good news on which to focus.