Its all how you phrase the question.

The Gallup Poll did a survey on consumer attitudes toward the housing market Seven in 10 Consumers Expect Housing Bubble to Burst [Gallup] yet 6 out of 10 think their local markets are fine.

The problem with this kind of survey is that the presentation is misleading, and because it is done by such a reputable company, it demonstrates the disconnect between certain elements of the media and the market itself. Now I don’t claim to know how to take a poll, but the survey was gathered by telephone based on 1,004 adult interviews. That seems kind of light to me.

First of all, Gallup uses the word bubble to characterize the real estate market, which infers imminent collapse. Whether or not you agree with that result is not the point. The survey therefore appears biased from the onset.

The title of the article Seven in 10 Consumers Expect Housing Bubble to Burst [Gallup] suggests that this is the way we feel about our housing market.

Yet in small subtitles the survey says Still, only about 4 in 10 expect housing prices in their areas to remain the same or decline. Why wasn’t it presented in reverse? Probably because its not as titilating.

Gallup breaks out consumer reaction to a national housing bubble and local housing bubble which is the most telling aspect of such a survey. Here’s the summary

  • 71% think on a national level, the housing bubble is going to burst including 24% who think its very likely.
  • 32% think that their local market is vulnerable including only 7% who think its very likely.
  • 87% of all consumers think their local market will continue to appreciate or stay the same.

So basically, consumers feel there is a problem on a national level but feel their local markets are relatively safe. Two assumptions can be made about the the significant disparity between local and national perceptions of the market.

Firstly, on a local level, consumers are more informed about the nuances of their market than they are about the overall market. This makes a broad statement that real estate is a local affair.

On the other side of the argument, it could mean that consumers are in denial about the market and tend to agree with national reporting because it does not necessarily have a direct impact on their own property.

Since we know that housing markets are made up of slow and expensive transactions [WP] that are impacted by local influences like zoning, location, etc., then I would tend to agree with the local perception, and, on a national level, the situation might appear more grave because its easier to cover in the media.

Either way, I don’t chew much gum.

5 Responses to “Four Out Of Five Consumers Chew Bubble Gum, (But NIMBY)”

  1. Bubbleboy says:

    you should become a politician. You have mastered the art of saying nothing. I hope you can chew gum and appraise property at the same time.

  2. Jonathan J. Miller says:

    Hi Bubbleboy. I was, sort of, thanks I think, and I can.

  3. Bubbleboy says:

    Jonathan, so what do you think, are manhattan real estate prices going to decline in the immediate future.

  4. Zephyr says:

    The general public is almost always wrong on market timing issues. They are the ones who buy at the top. God bless them. Someone has to be on the wrong side of the bet for someone else to have the winning bet.

    Their perception that local is safe and national is in danger is the opposite of what actually happens in the housing price cycle. Nationally the averages move very little while specific local markets tank.

  5. Anonymous says:

    The other problem with relying on the public is not only are they wrong on timing issues, they have a vested interest in their areas being the “safe” ones. It’s the old “my town is different” argument. My parents gave me that argument when prices started to rise in their affluent NY suburban town. Several years later, when not a house is selling while inventory is increasing, their argument just isn’t holding up.