A few days ago I wrote: "With so much talk in media of bubbles bursting it is hardly surprising that some people might not feel like buying." That same sentiment–that the media might be having an effect on the market, is echoed in a Vikas Bajaj column from Sunday’s New York Times.
Richard A. Smith, vice chairman and president of the Realogy Corporation, the nation’s largest residential real estate broker, said there was a “constant flood of media that is so negative” that it was discouraging many potential buyers and sellers.
“Nobody wants to be foolish in this kind of market,” he said. “No one wants to sell too low or buy too high.”
The column continues to explain the thinking behind a lot of what’s happening: journalists don’t want to be late to the story if there are problems on the real estate horizon.
Many journalists who cover the real estate market said they expected, and were not worried by, criticism from the industry. They said they were more concerned about whether the news media were skeptical enough about the boom while it was continuing.
“We were late to the savings and loan crisis and we were definitely late to the dot-com crash,” said Bradley J. Inman, publisher of Inman News, a real estate news service, who said he believed that the news media have done a better job covering the housing boom.
Some critics say the news media did not include enough contrary viewpoints during the run-up in home prices.
“Obviously, people get carried away,” said Dean Baker, co-director of the Center for Economic Policy Research in Washington, who runs a press criticism blog called Beat the Press. “But if there are voices that challenge it, it stops some people.”
But Mr. Shiller said he was not so sure it did. In reviewing historical news clips, he said, he found that the press had frequently questioned the premise of booms, including the 1920’s stock market boom. “Newspaper people do that more than their audience demands,” he said. But it appears, he added, that people “read it blandly and it doesn’t sink in.”
How the media covers real estate matters is on the one hand, a pretty dead horse. Media attacking media for over-reporting? There has certainly been a plethora of “bubble” press but I agree that the press has mostly been careful with their reporting portraying a “soft landing” or cooling of the market.
But it’s still on people’s minds. There is confusion there in the flood of media reports. You can find articles taking just about every conceivable position on this market.
Many have echoed the sentiment of Prudential Douglas Elliman CEO, Dottie Herman who likened the current real estate market to driving 55 mph down the highway after spotting a state trooper when you had been going 80. Sellers seeking record prices should stay put and buyers looking for huge bargains should temper their expectations. Today’s market is more traditional, but in recent weeks, we are seeing well priced property sell relatively quickly as buyers and sellers are experiencing a meeting of the minds.