In a Fight Between Realtors and the Media, Housing 'Bubble' Wins
“It’s my party and I’ll cry if I want to...”
That’s how the NY Times portrayed the housing market in its September 17 article “Someone’s Spoiling the Party, the Housing Market Says.” The article’s author, Vikas Bajaj, brushed off housing industry complaints about over-hyped coverage of real estate.
“Many journalists who cover the real estate market said they expected, and were not worried by, criticism from the industry,” Bajaj wrote. “They said they were more concerned about whether the news media were skeptical enough about the boom while it was continuing.”
Bajaj attempted to justify the recent coverage of the housing market and the “housing bubble.” Bradley J. Inman, publisher of Inman News, was quoted as saying that journalists didn’t want to miss the boat again as they had during the dot-com stock boom. The Business & Media Institute has previously documented the media’s insistence on comparison of the housing market to the stock market, ignoring key differences. An investment “bubble” occurs when an asset appreciates by extraordinary percentages for a short period of time, culminating in a rapid decline that wipes away most of the gains. The housing market is less liquid and prices don’t usually change quickly like stocks do.
The article went on to quote Dean Baker, co-director of the liberal Center for Economic Policy Research. Baker implied that readers’ monitoring of the housing coverage would ensure its fairness. Bajaj did not point out that Baker’s position is one of staunch support for the “housing bubble” theory. In a July 31 article published on TomPaine.com, Baker insisted the bubble was “deflating,” predicting that “Millions of people will lose their jobs and their homes.”
Nearly a month after Baker’s tirade, BMI noted that the housing market was gradually finding its way back to normal. In the August 24 article, Ken Shepherd quoted a National Association of Realtors spokesperson who said, “Sensationalism often sells. We’re still looking at the third-best year in housing history. Coming off of five years of strong sales, you can’t sustain that forever. When things start normalizing, it’s easy to compare to the best year ever, to say the sky is dropping.”
Bajaj also indicated that the housing market’s worry might all be for naught since “exactly how much the press influences mass consumer behavior is subject to debate.”