Ok, so we always need to blame someone because it lets us off the hook and it can make the issue more tangible. In the world of housing, the biggest target of blame is generally the media. I hear this at most real estate functions.
- The media distorts the negative aspects of real estate
- The media doesn’t look deep enough into the housing market in order to explain what is wrong with it
- The media scares buyers away
- The media hype kept me from making that sale last month
Really? No, really?
- The media caused me to drop my entire Oreo cookie in my glass of milk.
Ok, not really. I just threw that one in there. I’ve always been bothered by this positioning besides the negative energy (whining). Is the media part of a big conspiracy?
I am not an apologist but were the media blamers complaining about the housing market hyperbole when it was on the way up?
I’ll say this – some reporters get stories wrong and some real estate agents don’t sell houses. Yet does media error and hyperbole actually make an adverse impact? Even create an asset bubble?
Here’s another way to look at the issue as presented in Catherine Rampell’s Economix post:
The media — especially as embodied by Jim Cramer — has been accused of starting, perpetuating or inflating bubbles. A new study looks at the dotcom bubble of the late 1990s and declares otherwise.
News coverage tended to increase around public offerings but there wasn’t a noticeable impact on stock prices. The same could be applied to the most recent asset bubble: housing.
Yes, the media basically behaved badly, but its bad behavior did not appear to have much influence.
View early draft of research paper: THE ROLE OF THE MEDIA IN THE INTERNET IPO BUBBLE.
And don’t forget to blame the weather too.