Housing Bust: Just Kidding!
“Well, that noise you hear may be the sound of a bubble bursting,” said NBC’s Natalie Morales on the July 21 “Today” show. Or it could be reality pricking the hyper-inflated predictions of a bubble-happy media.
Just a moment after Morales’ comment, Federal Reserve Chairman Ben Bernanke was shown saying, “The downturn in the housing market so far appears to be orderly.”
As the Business & Media Institute has documented, the media have been warning of a bursting housing “bubble” for almost five years. And some reports are still emphasizing the negative. NBC continued its series titled “Housing on the Bubble” 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 Bernanke’s calm announcement and the fact that the market has shifted in buyers’ favor, ABC’s Jim Avila remained stuck in the “bubble” mindset, focusing on a couple who were having trouble selling. He promoted a July 29 “World News Saturday” story: “Hard 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.”
In the story that followed, ABC’s Bob Jamieson went to two doctors who shared a 7,000-square foot “$2.5 million dream house” and were having trouble selling it, though they had already bought another house. One doctor lamented, “It’s a hardship for anybody to pay two mortgages.” Jamieson sympathized, “It’s the worst market in a decade.”
But over on NBC’s “Saturday Today” the same day, Natalie Morales interviewed Vera Gibbons of Kiplinger’s Personal Finance magazine. Morales asked, “So is what we’re seeing now a correction in the market prices, or is this really the bubble bursting?” Gibbons responded, “Well, what’s going on is we’re moving, Natalie, from an overheated, overcharged market to a more normal, more traditional market …”
And even with a slowdown, that didn’t mean prices were dropping everywhere.
“One of the key economic indicators that actually drives housing prices is the employment picture,” Gibbons added. “And 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.”
In fact, the national median existing-home price was $2,000 higher this June than last, the National Association of Realtors reported.
Finally, ‘Good News for Buyers’
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 – and that that isn’t necessarily a bad thing.
On the July 27 “Early Show,” Harry Smith asked, “now are things just getting a little more normal?” Kiplinger’s Vera Gibbons replied in the affirmative, noting that mortgage rates had risen. But Smith added: “which is still, historically, a very good rate.”
Four days later, on the July 31 “Good Morning America,” ABC’s Chris Cuomo said, “this climate might be the perfect time to buy.” Elisabeth Leamy agreed: “After several years of a seller’s market, it’s finally a buyer’s paradise in Phoenix, Arizona, where new homebuilders are trying to attract prospective homeowners with high-end appliances, swanky countertops and fancy floors.”
Still, negativity dies hard. A July 30 “Good Morning America” report started off well enough with ABC’s Kate Snow declaring “good news for buyers.” Then in the following live interview with Realtor Allyson Bernard, Snow got an education on real estate.
Snow asked, “Are we – we talking about houses for the taking?” to which Bernard replied, “Oh, no, absolutely not. The value of houses is still really good.” She added that buyers now have more to choose from and “sometimes a little competition can be a good thing.”
Still, Snow pressed her about possible negatives in the market, including interest rates. ABC’s Betsy Stark had reported that the 30-year mortgage rate stands at about 6.7 percent. But Snow embellished that: “We heard Betsy Stark mention in the piece that the 30-year rate I guess is at its highest ever, so what does that mean?”
Bernard paused on the live broadcast before calling Snow’s error. “Well, it’s – it’s jumped a little bit higher than it’s been in the last four or five years, but it’s certainly not high by any means,” the realtor said. “My first home, I had a 21-percent mortgage rate. So these rates are nothing.”
Snow admitted, “Yeah, I shouldn’t have said ‘ever,’ but it’s – highest rate in several years. I exaggerate a little bit,” she said, laughing.
The Business & Media Institute has been following media “exaggerations” on housing for more than a year. Some BMI resources: