AP Maximizes Negativity in Covering Realtors' Housing Report

Photo of Tom Blumer.
By Tom Blumer (Bio | Archive)
February 15, 2008 - 23:03 ET

Granted, the National Association of Realtors (NAR) is a trade organization which will, as trade organizations do, try to put the best face on a bad situation. And granted, part of the press's job is to filter through hype and false sunniness to report the truth of what's really going on.

But that is most emphatically not what the Associated Press did with yesterday's NAR report on the state of the national housing market. Instead, AP failed to report overall statistics in favor of reporting individual metro areas; ignored most of the legitimately good news; ignored an important piece of historical context; and, most importantly, and as has been the case for well over a year in the national business press, emphasized reductions in unit sales while de-emphasizing much smaller reductions in sale prices.

Here are five of the key paragraphs AP's unbylined report ("New data reveal breadth of housing slump"):

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Sales of existing homes fell in 45 states during the October-December quarter, with metropolitan areas showing growing weakness, a real estate trade group said Thursday.

The fourth-quarter data from the National Association of Realtors underscore the breadth of the housing market’s slump.

South Dakota was the lone state to show a sales increase. Existing home sales there rose 8.9 percent from the same quarter a year ago. Sales were unchanged in North Dakota. No sales figures were available for Idaho, Indiana and New Hampshire. Sales also fell in Washington, D.C.

Median home prices fell in more than half of the 150 metropolitan areas surveyed. Out of the 77 that experienced declines, 16 showed double-digit percentage drops, the trade group said. The largest price declines were found in Lansing, Mich., Sacramento, Calif., Jackson, Miss. and Riverside, Calif., which posted price declines of 17 to 19 percent.

..... The states suffering the biggest drop in sales in the fourth quarter were Nevada, down 44 percent and Wyoming, down 42 percent. Other states with big declines were New Mexico, down 39 percent, Oregon, down 38 percent and Arizona, down 37.6 percent.

It seems that if it wasn't a double-digit negative number, AP tried mightily not to report it.

Here is some of what AP chose to ignore, straight from the NAR release:

  • Regional median sales price drops vs. a year ago -- Midwest, -3.2%; Northeast, -4.8%; South, -5.4%; West, -8.7%; US overall, -5.8%. These numbers are by no means pretty, but they're not nearly as bad as the "scary" unit sales declines.
  • The overemphasis on unit sales declines at the expense of information on prices is a significant oversight. It's as if someone tried to tell you that the stock market had a bad day if the indices stayed unchanged but volume dropped by half. Your response would be, "So?" The fact of the matter is that a lot of people are holding onto their homes or, if they are trying to sell but are in no hurry, sticking to their guns on selling price and riding the storm out. Though I don't want to overlook the difficulties of not being able to move when you'd like to (which I don't deny can be a significant hardship in some cases), how is all of this cause for comprehensive alarm?
  • Eleven of the 150 metro areas tracked had double-digit home-price gains (yeah, you read that right), including Metro San Jose, CA (+11.2%). 12 more metro areas had price gains of 6% or more. Other unreported increases in reasonably large metro areas include Buffalo-Niagara Falls (+9.1%), Des Moines (+5.6%), NYC-White Plains (+3.6%), Oklahoma City (+8.2%), San Antonio (+7.9%), and (imagine that) San Francisco-Oakland (+5.5%).
  • AP totally ignored an important larger-context point made by the NAR, namely that "the typical seller who purchased their home six years ago still saw a very healthy gain. The median increase in value for sellers who purchased that home in the fourth quarter of 2001 is 31.2 percent, and the median home equity accumulation is $49,000." Six years happens to be how long a typical homeowner stays in their home before selling.

At some point, you have to consider the possibility that the reporting on the housing situation is as it is because the business press is determined to convey the impression that the mortgage lending and housing "crises" are nationwide phenomena that require comprehensive, national solutions, when the data show that this clearly isn't the case.

I'm at that point.

Cross-posted at BizzyBlog.com.

—Tom Blumer is president of a training and development company in Mason, Ohio, and is a contributing editor to NewsBusters


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fake money

February 16, 2008 - 00:17 ET by Lame Cherry

A house worth more money only means that the dollar is worth less and at that rate of 1/3rd drop in buying power a few percentage points in house equity means people still lost money.

I did read that housing sales were up in Detroit, but America has got to get off this inflation system as it is destroying our people in making them worry about the costs of living from doctor bills to now paying for gas.

I so much would like people now to understand the economy of the 1960's. A person could earn 400 dollars a month and live well. A starter house cost 5000 and was a nice home. An LTD cost around 1100 dollars. A dentist could drill and fill your teeth for more visits than you cared for 35 bucks. 20 dollars bought more groceries than you could eat in week.

That was before hyper inflation where the banking cartel crooks deflated the dollar. What good is 100,000 house with 2500 dollar yearly taxes, 10,000 dollar roofing, 15,000 painting, it costs over a thousand bucks to heat and cool it.......top it off with insurance and the value of that 5000 dollar home in 1965 is not worth as much today in buying power. A car cost 1/5th of that home and now it costs 1/3rd.

That is Americans loosing what is important in buying power. Ronald Reagan regained that for a time for Americans, but there is a literal real estate, banking etc.. etc... screwing Americans over in their money and the government steals half a person's wages.

Americans deserve an economy like the 60's when things were cheap and life was without all these burdens. It can be done, but until we get off this roller coaster of "houses went up" and thinking inflation is a hedge against anything this will not end.

There are economists who do know how to fix this. I have posted enough of the basics here to try and educate citizens as this is ridiculous in what Americans are hitched to.

We can with correct policy produce ourselves out of this. American can keep Mexico and Canada sovereign and build them to be trading partners. America can buy up northern Mexico and Americanize it as our economic buffer zone and do the same to Latin America as a bulwark in destroying the Chavez communism being implemented by the same Soros raiders ruining those people's lives.

Americans produce better than anyone. We need to have our system produce and generate wealth. Doing so will make America a 1950's LENDER STATE TO THE WORLD and not a debtor state.

Doing so will end the welfare system as people will be able to afford the care they require themselves.

This system will bust and the last thing America needs is it to bust and have George Washington's prophecy coming true in the entire world lining up against us in an invasion of our shores bringing war here.

We need to fix the system make America so economically strong and necessary to world economic SUPPLY that no one will be attacking us.
That is how one solves being sucked into Eurasian wars.

End the fake money and reinstitute BUYING POWER.

 

*HIC IACET ARTORIVS REX QVONDAM REXQVE FVTVRVS

and....

February 16, 2008 - 01:28 ET by Tom Blumer

it could usually be managed on one income.

OTOH, houses are twice as big, every kid has his/her own room, cable, wireless, and the Net didn't exist, blah-blah.

I just digussed this topic

February 16, 2008 - 10:58 ET by JohnC

I just digussed this topic with some friends over cocktails. My point to them was the money supply was distorted once Nixon got us off the gold standard. We can't print gold, we can greenbacks. The inflationary spirals of the 70's as well as the "stagflation" were caused by the fed's new found ability to print money without the need to back it. This freedom enabled the government to institute a pleathora of new spending programs (from Great Society nonsense to out of control foreign aid) in an attempt to spend our way to prosperity.

I went to college for economics and against all odds (it was the 60's-70's) was a die hard Milton Friedman, Chicago School free trader. As such I tried to explain the real cost of money to my friends. They couldn't get it. They never will. One friend told me he bought his home for 400k in 2000 and now it's worth over 600k. I told him unless he added 200k in improvements all that means is it now takes 600k to purchase what 400k would 8 years ago. The blank stare was priceless.