Yesterday, trolling the web for real estate news, I had a hard time deciding whether the market was improving or deteriorating, whether the news was good or bad. It depended what I was reading and where it was published.
There were stories of home sales soaring in various parts of the country, including some of those hit worst by the recession. There were stories, too, about foreclosures going up and lending requirements tightening. For every 'up' story there was a 'down' one. How are readers supposed to understand what's really happening?
Leave that to me.
I've made my living from writing now for 42 years and taught journalism for six of those, so I have a pretty good understanding of how the press works. And it's the workings of the press we're concerned with here, much more than the real estate market, itself.
Sometimes you'll note, for example, that the body of the story doesn't accurately reflect the headline, which is all that many people ever read. That's because the headline is rarely written by the person who wrote the story. The headline writer -- usually an editor -- may have a little agenda of his or her own or maybe that of the publication, itself. Or maybe they didn't really read the story that carefully in the first place. (Ed note: Other times, it's simply a case of trying to write a hed for a tight space). So the very same story could easily have a headline that says "Home Sales Rise 30 Percent" or "Median Home Prices Drop Seven Percent."
Most stories don't have enough context. Explaining what the heck this really means isn't there either because it was cut from the bottom of the story where the writer would have stashed it, because the writer simply doesn't know
the context and so can't write it, or because the publication doesn't care to provide the context.
I think understanding the context is vital.
So if, like me, you are wondering if the real estate news is good or bad, well it is bad
. Home sales are up because of a Federal tax credit and nothing else. When that tax credit ends, home sales will come crashing down. Even if the tax credit doesn't end, home sales will eventually drop because we'll run out of well-qualified buyers, which are the group these tax credits are aimed at. Lenders are tightening, not loosening borrower requirements, the economy is still failing to add new jobs, and there's a huge glut of foreclosures two million homes deep that will hit in the first half of 2010.
(nobody really knows when) the market will truly turn and both prices and buying opportunities will improve, but a message like that doesn't sell newspapers or web sites.