The media’s damage to confidence, psychology…

Has anyone been able to listen to an entire newscast lately without hearing that “One-fourth of homeowners are underwater!” Think about that term.  “Underwater” conjures up an image in my head of someone going down for the last time, gasping their last breath. It almost implies that the mortgages of such families instantly become due and payable and they’re going to lose their homes.  In fact, most of them are current on their payments and aren’t even trying to sell their homes.  Is it a great surprise that in a declining market, so many people who bought their homes a few years ago with no downpayment or perhaps 3% down now owe more than their home is worth?  Why does the media have such a negative bias about the real estate market?  When stocks plunged a few years ago, I don’t recall hearing that “investors are underwater on their investments!”

It’s probably inappropriate to paint “The Media” with such a broad brush.  Some are better than others in this respect.  Consider these two headlines, printed within a day of each other. Our newspaper’s headline was “Toledo home prices fall at 3 times national rate in first quarter.”  It was factual, median sale prices dropped 12.5% in the quarter, largely because of our unusual activity in lower end investor and foreclosure properties. That is not the same as saying that your home declined in value by 12.5% in the quarter, just that those particular units that sold in the first quarter compared with different units that sold in the first quarter of 2010 were lower priced.  The statistics do not compare the same homes year-to-year! Therefore, perhaps market activity, not median prices, should be the focus.  Example:  with nearly the same quarterly decrease in prices (9%), the headline in Sarasota was “Southwest Florida home sales up 11% from 2010.”  They somehow focused on the positive, a significant improvement in unit sales, while here we read about the negative number, which was actually better than many other Ohio cities . . .

Markets are markets, they go up and they go down.  We have every expectation that like the stock market, the real estate market will recover, unless we allow the media to convince us that the sky has fallen on one of this country’s greatest foundations.

Epilogue: After posting this opinion came the inane cartoon in the Blade’s 5/12/11 Pages of Opinion which essentially suggested you are crazy to consider buying a house.  What on earth can be the motivation for their campaign against home ownership?