NBC's Brown Blows Smoke on Housing Bubble
NBC’s Campbell Brown floated the image of a real estate “bubble” in a brief item on housing sales on the August 15 “Nightly News.” But not all economists are that pessimistic, and research by the Business & Media Institute shows the media have long been anticipating a bubble burst that hasn’t happened.
Substitute anchor Brown told her audience there was “More evidence that the housing bubble in this country is deflating” as “sales of existing homes fell by 7.5 percent in the second quarter.”
But while home sales slowed, the median price for a home “rose 3.7% to $227,500,” reported USA Today’s Noelle Knox in the August 16 paper. Knox added “there’s no sign of any bursting real estate bubble” with some of the “most expensive areas” seeing “modest price gains last quarter, though the rate of increase has slowed.”
Also on August 16, Greg Robb of MarketWatch reported that while some economists like Joel Naroff are pessimistic about the real estate market, others such as Omair Sharif of RBS Greenwich Capital argue that the housing market is adapting to changing circumstances.
“Builders are cutting back on new supply,” Sharif noted, adding that the cutback could “help to shorten the recovery period in the housing sector.”
As the Business & Media Institute reported in November 2005, the media have long anticipated a housing bubble. On Sept. 3, 2001, Forbes magazine warned its readers about the consequences of home equity values starting “to wobble,” while stating, “There are ominous signs that this is about to happen.” On the same day, a BusinessWeek editorial cautioned about a “double bubble” and told its readers, “A housing bubble may be developing – right behind the Nasdaq bubble.”