Woody Allen was once asked his religion. "Jewish," he said, "with an explanation." He could have been speaking for all weather forecasters, Hillary Clinton (on the subject of sniper fire in Bosnia), and Britney Spears' mother. Oh, yes, and housing market "experts." What great jobs these real estate mavens have; they can be wrong, sometimes scandalously so, but they cover their overly rosy predictions with explanations that project even rosier ones.
It is hard to put much faith in the opinions of a trade association or real estate market observers whose livelihood depends on the rest of us believing it is always a good time to buy (and sell). When prices are trending up, it
We are served a steady diet of seesaw journalism, extreme opinions but few moderate ones.
is a great time to buy, they say, because you will make money. When prices are in precipitous decline, as they are now, it is also a great time to buy because sellers are desperate and you can negotiate the lowest possible price (and prices always go up eventually, so you will, of course, make money). The mainstream media goes along with the duplicity because they are just interested in the drama of the story; it is rare they ever quote someone with a balanced, moderate opinion. Instead, we are served a constant diet of seesaw journalism, the extreme points of view, the shouting matches that the media somehow sees as balance. Recall the old Saturday Night Live send-up of CBS' Point/Counterpoint? ("Jane, you ignorant slut.")
The most unbalanced media when it comes to discussions of real estate are those for whom bad news about the market is bad for business, magazines like
Where to Retire and
Living Southern Style. These media purport to help us understand our best options for buying a home, but what they really do is cloak ads for specific communities in the guise of editorial material. The formula is pretty straightforward: Community A pays for an ad in the publication and the editors add a story on the community to the editorial mix. The rest of the publication includes a few articles about green living, or how great a city Tampa is, and maybe even some general piece on the housing market. Just don't ever expect to read a comment in a magazine like
Where to Retire from, say, Yale professor Robert Shiller, one of the more sober and helpful analysts of the housing market.
An article in the winter 2008 edition of
Living Southern Style entitled "2008 Real Estate Trends" is a prime example of pumping sunshine into editorial material. The article features comments by Elizabeth Weintraub, a real estate agent and columnist at
About.com. In the piece, Weintraub argues that, in 2008, "interest rates will stabilize...investors will return to the market in higher numbers, since they recognize that a buyers' market is an excellent time to purchase real estate." The article adds that, "according to Weintraub, home prices are not likely to plummet...they will more likely decline gently and flatten." The expert, according to the magazine, also "predicts that the housing glut will increase at the beginning of the year and decrease sharply, as homeowners pull their listings from a saturated market."
Well, she had the glut part right, but we are now beyond the beginning of the year, and inventories surged again in April, according to National Association of Realtors figures released this past week. Existing home sales fell for the second month in a row, and prices dropped sharply from the same month (and quarter) in 2007. And although Weintraub's prediction about stabilizing interest rates was accurate, it should have been accompanied with an explanation that folks without bulletproof credit ratings were finding it harder to get loans to buy the low-priced houses. Thus, interest rates alone are not having the desired effect to reduce inventories.
In short, Ms. Weintraub and her ilk have no more discriminating insights about the real estate market than your Uncle Max. But that doesn't stop some of these so-called advice magazines from trotting these people out time and time again.
If you visit
About.com, you will find Ms. Weintraub holding forth on the details of buying and selling a house. You will not find her commenting on her predictions of just a few months ago. However, you can bet that, soon enough, she will show up again in some venue that shares her interest in selling a sow's ear as a silk purse. Caveat emptor.
