Housing Bust: Just Kidding!
âWell, that noise you hear may be the sound of a bubble bursting,â said NBCâs Natalie Morales on the July 21 âTodayâ show. Or it could be reality pricking the hyper-inflated predictions of a bubble-happy media.
Just a moment after Moralesâ comment, Federal Reserve Chairman Ben Bernanke was shown saying, âThe downturn in the housing market so far appears to be orderly.â
As the Business & Media Institute has documented, the media have been warning of a bursting housing âbubbleâ for almost five years. And some reports are still emphasizing the negative. NBC continued its series titled âHousing on the Bubbleâ on July 25. And on July 29 ABC continued the seller-focused housing gloom. But some reporters have had to admit that previous claims of economic catastrophe were exaggerated.
Despite Bernankeâs calm announcement and the fact that the market has shifted in buyersâ favor, ABCâs Jim Avila remained stuck in the âbubbleâ mindset, focusing on a couple who were having trouble selling. He promoted a July 29 âWorld News Saturdayâ story: âHard sell. Dream houses turn into nightmares as home sales drop and mortgage rates rise. How this couple and so many others are trapped in the real estate bubble.â
In the story that followed, ABCâs Bob Jamieson went to two doctors who shared a 7,000-square foot â$2.5 million dream houseâ and were having trouble selling it, though they had already bought another house. One doctor lamented, âItâs a hardship for anybody to pay two mortgages.â Jamieson sympathized, âItâs the worst market in a decade.â
But over on NBCâs âSaturday Todayâ the same day, Natalie Morales interviewed Vera Gibbons of Kiplingerâs Personal Finance magazine. Morales asked, âSo is what weâre seeing now a correction in the market prices, or is this really the bubble bursting?â Gibbons responded, âWell, whatâs going on is weâre moving, Natalie, from an overheated, overcharged market to a more normal, more traditional market âŚâ
And even with a slowdown, that didnât mean prices were dropping everywhere.
âOne of the key economic indicators that actually drives housing prices is the employment picture,â Gibbons added. âAnd the employment growth right now is very strong in Houston, Dallas-Fort Worth, also strong in Seattle, Raleigh-Durham, Charlotte. So some of these markets, actually prices are actually headed up.â
In fact, the national median existing-home price was $2,000 higher this June than last, the National Association of Realtors reported.
Finally, âGood News for Buyersâ
After all the talk of a bust in the housing market, some journalists have warmed up to the idea that the market can shift from favoring sellers to buyers â and that that isnât necessarily a bad thing.
On the July 27 âEarly Show,â Harry Smith asked, ânow are things just getting a little more normal?â Kiplingerâs Vera Gibbons replied in the affirmative, noting that mortgage rates had risen. But Smith added: âwhich is still, historically, a very good rate.â
Four days later, on the July 31 âGood Morning America,â ABCâs Chris Cuomo said, âthis climate might be the perfect time to buy.â Elisabeth Leamy agreed: âAfter several years of a sellerâs market, itâs finally a buyerâs paradise in Phoenix, Arizona, where new homebuilders are trying to attract prospective homeowners with high-end appliances, swanky countertops and fancy floors.â
Still, negativity dies hard. A July 30 âGood Morning Americaâ report started off well enough with ABCâs Kate Snow declaring âgood news for buyers.â Then in the following live interview with Realtor Allyson Bernard, Snow got an education on real estate.
Snow asked, âAre we â we talking about houses for the taking?â to which Bernard replied, âOh, no, absolutely not. The value of houses is still really good.â She added that buyers now have more to choose from and âsometimes a little competition can be a good thing.â
Still, Snow pressed her about possible negatives in the market, including interest rates. ABCâs Betsy Stark had reported that the 30-year mortgage rate stands at about 6.7 percent. But Snow embellished that: âWe heard Betsy Stark mention in the piece that the 30-year rate I guess is at its highest ever, so what does that mean?â
Bernard paused on the live broadcast before calling Snowâs error. âWell, itâs â itâs jumped a little bit higher than itâs been in the last four or five years, but itâs certainly not high by any means,â the realtor said. âMy first home, I had a 21-percent mortgage rate. So these rates are nothing.â
Snow admitted, âYeah, I shouldnât have said âever,â but itâs â highest rate in several years. I exaggerate a little bit,â she said, laughing.
The Business & Media Institute has been following media âexaggerationsâ on housing for more than a year. Some BMI resources: