Throw empircal analysis, well thought out discussions, global insight, and actual data aside for a second.
I was talking with an experienced real estate broker yesterday after a speaking engagement and she made an observation that I had not given too much thought to. It struck a chord with me, and I don’t really understand why it did because it was so basic.
I think people tend to read news sources that they find comforting, speak their language, come from their perspective. I have addressed this with housing bubble blogs specifically before here on Matrix. Political conservatives gravitate toward publications like The National Review while political liberals may be more likely to read The New Republic and I have it on good authority that real estate appraisers read Sports Illustrated (no, not for the Swimsuit edition).
Ok, I’m back.
This agent’s sellers tended to rely on (aka cherry pick) real estate news from local newspapers and buyers tended to get rely on (aka cherry pick) information from national newspapers. A few days prior, another real estate agent gave me a similar viewpoint.
I started to think about it a little further and it made more sense to me. Local publications tend to be more protective of their local turf in order to connect with their readers (positive) while national publications are more broad based and disconnected from local conditions (negative).
Nothing earthshattering here but it makes for a strong argument that everyone should be reading everything (including Matrix). 😉
The term for this is “confirmation bias.”
Could it be also that owners and buyers ‘cherry pick’ for the advantage of their own spin? IE the sellers want a higher price for their property and see a more positive environment for selling if they look at the local market (we’re talking Manhattan), as opposed to housing numbers with a national base. When buyers want a property aren’t they naturally going to pull in any argument possible to justify a lower price? So they quote those national averages for their low bid argument. Then of course there is the element of spin – those little exaggerations to make each point of view all the more compelling. Enter the knowledgeable broker who has a good appraiser’s reports (read Miller Samuel) at hand to bring these two sides together.
consider the source….
the average local newspaper is about as objective w/r/t local real estate as the average church newsletter is objective w/r/t the resurrection
not all news outlets are created equal
Call me naive, but I never bought the argument that newspapers put a positive spin on real estate (or other things) just so they can keep selling advertising.
And, except for the cheerleaders at the National Association of Realtors, I don’t think real estate agents do, either. (Okay, I can only talk of what I know, here in Boston.)
The thing about the housing bubble is that I felt as though most of the online discussion was prompted not by buyers, but by people in the general public, who just wanted to slam the high prices and the euphoria that was going on. I think very few of the writers of the blogs (and commenters) had a vested interest, other than tearing something down. (For further on this, see any of the many comments on Curbed.com.)
It’s funny, too. People make the argument that the media are talking DOWN the real estate market, in order to sell newspapers.
It can’t be both ways, can it?
Hey ske-tic – gather up some self-confidence – Critical reading skills are pretty basic. when you get down to it – what is objective? and from whose point of view?
maybe we’re all just brains in vats being stimulated by electrodes and the entire RE market is just vapor in our imagination
obviously there are degrees of objectivity and subjectivity.
generally, the critical reader understands (as I’m sure you do), that the less of a personal connection one has to the subject he observes, the greater the liklihood of an objective view.
But, please, keep on getting your real estate news from your local newspaper if it cheers you up
“The thing about the housing bubble is that I felt as though most of the online discussion was prompted not by buyers, but by people in the general public, who just wanted to slam the high prices and the euphoria that was going on. I think very few of the writers of the blogs (and commenters) had a vested interest, other than tearing something down. (For further on this, see any of the many comments on Curbed.com.)”
Or maybe you just have an interest in propping something up? See how it works?
I think you’re wrong there – there may be some trolls who do it for the heck of it, but I read ALL sources, including blogs, and am a prospective buyer. More so, one from an angle you don’t hear about much these days – first time, double-income over 300K a year, incredible credit scores (over 800), no other debt (a few student loans) and (wow) a downpayment. And to me, the reason I have an interest is because I find almost everything out there to be unaffordable and am dissatisfied with the enormous amount of contradictory information. I can only conclude that something smells in the market fundamental. This disconnect seems to be completely and conveniently ignored by most media, and certainly the NAR, as well as real estate agents. I think about it anecdotally, and all of the homeowners who bought prior to 2002 who I asked whether they could still afford their own house if they had to buy it today? Generally the resounding answer is “No.” There’s something off here, and it’s my belief that we’re going to find out the hard way because until most people have been loving the sunshine and ignoring the brewing storm because of their persistent desire to only live in sunshine.