Copy for Real Estate Guide Column for 1-18-08
REAL ESTATE PATTERNS
By Ken DuVall

REALITY VS. CREATIVE JOURNALISM

There’s a lot of differing opinions out there. The latest news on the real estate front is either calmly reassuring or deeply alarming, depending on one’s point of view. The Nat’l Assn. of REALTORS reported that home sales prices actually rose in the last quarter in most metropolitan markets. The Associated Press emphasized the negative statistic that the number of homes sold had fallen in 46 states. Guess what: Both were correct.

The contrasting reports stemmed from the exact same press release, reflecting the fundamental divide that exists between the real estate industry and the news business. Reporters think the industry is out to spin the numbers and put a smiley face on a grim situation. So I’ve decided to rename the networks: ABC stands for Always Biased Coverage; CBS for Continual BS (you fill it in!); and NBC for No Body Cares. Oh yeah, CNN stands for the Corrupt News Network; and Nat’l Public Radio is for No Pertinent Reporting!

But which facts matter? By choosing only one important set of data over another, the AP story painted a gloomier picture in the public mind which real estate industry critics say holds dire consequences for the market and the economy in general. The biggest problem I see today is out-of-context reporting. I take no issue with reporting downbeat data, but what I do object to is the media obviously going out of its way to over-emphasize the most negative aspects of simple statistical reports, creating fear that has impacted and shocked the market into near paralysis. They’re poisoning the well from which we all drink.

My beef, and it affects all of us, is that their continuous drumbeat of negative coverage is causing would-be buyers to back out of transactions. It demoralizes me too. The market is actually underperforming in part due to the fear created by their depressing headlines. That’s not good for anyone. The key elements we’ve long adhered to, that housing is a good value, a good investment, a necessary shelter, a place to call home, and with significant tax benefits, is under relentless attack by the drive-by media. We should all be working together promoting fair and balanced reporting of the news to inform- not indoctrinate- the public.

There’s an unprecedented opportunity to buy right now that I’d hate to see consumers miss out on, at least not before investigating the possibilities. Interest rates have fallen dramatically, home choices have increased, and prices are very favorable. Chico sales, while not breaking records, are still ongoing. All markets, just like weather reports, are local, so don’t be spooked by the national media’s “never let the facts stand in the way of a good story” doomsday mantra scare you off. The tail is wagging the dog.

Clearly, the media has a profound ability to influence the market place. Remember: they’re fueled by sensationalism, not the mundane. Where they say prices and sales are “plummeting”, that catches your attention. But they are not plummeting everywhere! The printed word has a dramatic way of influencing your perspective. You keep reading “we’re all doomed!” long enough, you will turn into a fence sitter for sure. No matter what they report, life as we know it still goes on.

If they simply pointed out that sales are slower, true, but also true, that the industry just had its sixth best year ever, despite of all the actual really bad things that happened to us last year, that would paint a far more accurate picture. We need a sense of balance now more than ever before. Example: Stock guru Jim Cramer set off national alarms when he advised on NBC’s Today Show, “Don’t you dare buy a home now or you’ll lose money.” What he said was totally inaccurate and diametrically opposed to what he preaches on his own investment show, which is to buy low and sell high! Again, housing is not a get rich quick scheme. It’s a get rich slow agenda.

Housing never goes out of style or becomes obsolete. Demand will always continue to increase. Conversely, the supply of usable land will continually decrease. You tell me what effect that scenario is going to have on prices as we go forward. Late flash: Last week Actor Nick Cage’s Newport Beach home sold for $35 million, a new price record for Orange County. That’s $10 million more than he paid for it in 2005- at the peak of the housing boom! Cramer was mistaken. Apparently you can even buy high, and then sell high too. Amen to that!

Ken owns Ken DuVall & Associates, REALTORS at 3rd Ave. & Mangrove in Chico. Ken was the 2001 President of the Chico Assn. of Realtors and the 1995 Chico Realtor of the Year. See Chico MLS listings at www.KenDuVall.com and call Ken at 345-3700 for all your real estate needs. Free consulting.