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Reporting the News, or Economic Terrorism ? You Decide...

Another doom and gloom report was issued by the Mortgage Bankers Association today, Thursday, June 5, 2008.  As usual, the headlines of this article blare "Home Foreclosures Soar to New Record."

It is just one more blatant example of the media painting the nation's real estate market with a very broad brush.

Jay Brinkman, vice-president of research and economics with the Mortgage Bankers Association, had more nasty news for us.  The following is from the Thursday "quarterly snapshot" of the mortgage market.

"The number one problem is the drop in home prices," Brinkman said. Declining prices, especially in newer built areas, "are hurting people's ability to recover when they run into trouble - a divorce or loss of job," he said. "In other days, you could sell the home. But because home prices have fallen so much, in many of those cases, the homes are going into foreclosure."

Mr Brinkman continues to say the following:

"California, Florida, Nevada and Arizona accounted for 89 percent of the total increase in new home foreclosures, he said. Those are places where prices have fallen sharply and there was a lot of home building, creating too much supply, Brinkmann said."

Why do they do this ?  If you simply subtract the 89% of the current foreclosures in these four states from the total 100% of the foreclosures... the article could have been presented in a much different manner.

What a different picture it would paint if the real truth of Mr Brinkman's study said that "The Great Majority of States... 46 out of 50 states in the United States... had only 11% of the national foreclosures.

There are "two sides" to the current statistics from The Mortgage Bankers Association report.  One side is straight out of hell.  The other side... well, it says that things are nowhere near as bad as the national media portrays the real estate market to be.

Presenting economic news in such a jaded way could be labelled "economic terrorism."  My question is... How Do We Bring Some Accountability to the National News Media ?

Comment balloon 16 commentsKaren Anne Stone • June 05 2008 05:52PM

Comments

Great point, Karen... There are always two sides to the story... remember the old adage though...if it bleeds, it leads. 

Posted by Jesse & Kathy Clifton, Retired (Jesse Clifton & Associates, REALTORS®) over 9 years ago

Hi Karen Anne,

Really good way to  look at it.  So we hve to tell the sellers that foreclosures are soaring and tell the buyers that 89% of the increase in foreclosures are limited to 4 states.  :)

All the best!

Posted by Kevin O'Shea, White Plains, NY Real Estate (Coldwell Banker) over 9 years ago

I wonder if any one on the national scene will ever admit publicly that foreclosures are only .01% of our listings.  Maryland has 49,951 properties listed and 588 are foreclosure/REO listings.

That's not even newsworthy.

 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) over 9 years ago

Karen Anne:  Another example of media frenzy.  They love doom and gloom. 

Posted by Chris Ann Cleland, Associate Broker, Northern VA (Long and Foster REALTORS®, Gainesville, VA) over 9 years ago

Karen Anne, This is why I don't listen to the national news.  Our son is an Intelligence Analyst in Iraq and I know they have been catching LOTS of bad guys but you sure don't hear that on the new either do you? 

Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) over 9 years ago

Perhaps a Bloggers revolt? As long as people tune in, read or respond...they will keep on doing it....because they are no longer news sources they are sensationalistic panderers.

Posted by Joan Mirantz, Realtor, GRI, CBR, SRES - Concord New Hampshire (Homequest Real Estate) over 9 years ago

Excellent point Karen Anne!  If people don't challenge some of these statistics when they are obviously slanted for negativity, we have only ourselves to blame.  Thank you for a timely and well structured argument against false spin.

Posted by Lola Audu, Audu Real Estate~Grand Rapids, MI ~Welcome Home! (Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate) over 9 years ago

Karen Anne... once again you hit the nail right on the head.  I saw that news item this morning and just wanted to scream... you did something much more productive.

Thank you for putting this all in its proper perspective.  You truly help me keep my sanity!

Posted by Steve Shatsky over 9 years ago

you are such a smart woman - thanks for putting a great spin on these stats

Posted by Thesa Chambers, Principal Broker - Licensed in Oregon (Fred Real Estate Group) over 9 years ago

Good point, Karen Anne!  It's amazing the different spins you can put on a single story when you're dealing with numbers.  Makes me crazy!

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) over 9 years ago

Karen Anne.... thanks for putting this into perspective.  You always seen to have a great spin on things.

Posted by Pam Winterbauer, "Providing Blue Ribbon Service" (Pam Winterbauer Real Estate) over 9 years ago

Good point Karen Anne,  Texas just keeps on growing.  So thankful to be here! Was in Granbury recently and Wow at the growth!  Ft. Worth too. :)

Posted by Ricki Eichler McCallum, Broker,GRI,ABR, - Your Coastal Bend Home Source (CastNet Realty) over 9 years ago

Our media loves to stir the pot. Here in Idaho the numbers have not seen too much negative.

Posted by Kevin Robinson, Fractional Developer over 9 years ago

This is an excellent point.  One of the consequences is that buyers wait for endless price reductions. They are shocked that the prices are where they are. After all, everyone KNOWS there is a crisis on.  Why won't the seller lower his price by 50%? Why won't home builders lower their prices by 50%? It's caused expectations on the part of  buyers to spiral out of control.  Creating more stagnation when they don't get everything they want.

Posted by Ruthmarie Hicks (Keller Williams NY Realty - 120 Bloomingdale Road #101, White Plains NY 10605) over 9 years ago

Here in Ohio, we stress to our clients that "real estate is local."  What you read and hear in the news are general comments and can't possibly apply to all areas of the country.  Let's face it, situations are different from county to county.  Cleveland, located in Cuyahoga county leads the country in foreclosures, whereas Geauga, which is adjacent, hardly has any. 

Regarding the buyers who are waiting, I will quote a very wise man, David Crockett of the Crockett Team of Howard Hanna Smythe Cramer, one of the most successful teams in the U.S.  He said, "The sky is not falling.  Markets go up and down.  Markets are constantly changing and correcting.  Smart buyers understand that there are great opportunities right now in all that turbulence."  David, well said!

My signature

Posted by Christine Hart Howlett, Keller Williams Greater Cleveland NE (Painesville and Eastern Lake County) over 9 years ago

Btw, Karen-Anne - I found the report and used a quote from it directly to try a calm a spooked buyer. I feel like I'm endlessly sending listings to half of NY state right now.  They buyers are so ridiculously unrealisitic its beyond belief. Crazy stuff  like they are waiting for a 50% reduction in prices back to the 1990s. Or they reject a house out of hand because it doesn't have granite in the kitchen and marble in the baths. Here's a thought..put it in!  This is NY for heaven's sake.  There are a lot of people with money out there and a lot of people want to live here and can pay for it. So yes, the prices are going to be pretty steep...and that's not changing at least not significantly. Here's the quote...

<<"The problems in California and Florida are extraordinary and they are the main drivers of the national trend.  The quarterly rate of foreclosure starts on subprime ARM loans in California was 9.24 percent.  This rate, combined with Florida's rate of 8.25 percent, drove up the national average foreclosure start rate to the point where 43 states were below the national average of 6.32 percent. >>


So if my client comes back to the table it will be because of you....

Posted by Ruthmarie Hicks (Keller Williams NY Realty - 120 Bloomingdale Road #101, White Plains NY 10605) over 9 years ago

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