Our Local Papers
Okay, the Seattle Times and Seattle PI are losing all credibility for reporting objectively about real estate prices.
Aren't journalists supposed to ask tough questions? To be skeptical?
How is it then that there hasn't been a single story (that I've seen) to suggest the possibility (even likelihood) that local real estate prices will decline 20% or more from their peak?
Prices have been declining since July, yet not a single college-educated journalist has asked "how low will prices go?" in print.
On Sunday I saw a paper fanned out at my gym and saw what I now believe to be the reason: the Real Estate Section. Hmm, paid for by advertising... from mortgage lenders and realtors and home sellers.
Our local "journalists" can't report the truth about the *local* real estate bubble because of their sponsors and the bottom line. They are doing readers a disservice and in fact are subjecting them to unnecessary risk by not reporting.
I'm no conspiracy theorist, but I can't find any other plausible explanation. Can you?
Aren't journalists supposed to ask tough questions? To be skeptical?
How is it then that there hasn't been a single story (that I've seen) to suggest the possibility (even likelihood) that local real estate prices will decline 20% or more from their peak?
Prices have been declining since July, yet not a single college-educated journalist has asked "how low will prices go?" in print.
On Sunday I saw a paper fanned out at my gym and saw what I now believe to be the reason: the Real Estate Section. Hmm, paid for by advertising... from mortgage lenders and realtors and home sellers.
Our local "journalists" can't report the truth about the *local* real estate bubble because of their sponsors and the bottom line. They are doing readers a disservice and in fact are subjecting them to unnecessary risk by not reporting.
I'm no conspiracy theorist, but I can't find any other plausible explanation. Can you?
Comments
I think the bias towards "good" news in the media is simpler than many people suspect. Readers like good news. What good does it accomplish to do a thorough job of covering unpleasant subjects if your circulation tanks as a result?
This is particularly true of particular sections of newspapers, or the broader media. The majority of people who read the real-estate section do so because they want to buy or sell a home. If the real-estate market is lousy, readership of the real-estate section pluments. That's a fact.
So why would any real-estate section be particularly keen on highlighting a downturn if they know a bad market hurts their readership?
To give another example as to how market directions and success interplay, just look at the financial TV stations like CNBC. There is an extremely high correlation between the direction of the stock market and CNBC ratings. When stocks were tanking in 2001/2002, CNBC ratings went in the toilet.
People just don't want to hear bad financial news (be it real-estate, stocks, or otherwise). As a result, it is perfectly logical that there would be a built-in bias against such negative news in the media. No particular mystery here.
What I think is really happening is that all news reports are actually historical reports. They report on what happened, not what's happening. For car chases, they can seem up-to-date because the event has a definitive start and end. Financial markets are less definitive, so it's harder to know what the appropriate amount of optimism/pessimism is until after things play out, which can take years.
The thing is, markets closely follow the general opinions of the people involved in the market, which is essentially everyone. I think if you look at the papers, they have fairly well mirrored general concensus, and I wouldn't expect much more out of them than that.
Yes, good point that papers mirror consensus. Which means our Seattle papers are another indication there's still a bubble mentality, on the part of local homeowners and real estate pros if not buyers.
Still bothers me they're reporting Seattle's price "gains" around 1% over the last year, without mentioning that all the gain was in the first 6 months, while the last 6 months has shown decline that is likely (based on the steep slope of decline) to continue.
Very true. Of course, those are the kind of numbers which won't hide much longer. Numbers are going to go negative as we ease into a spring 'bounce'. That's going to be very hard to spin.