UNBALANCED REPORTING DRIVES HOME SALES DOWN
(Advisory Board Opinion)
By: Peter P. Casey, GRI, CRB, RECS
Prudential Wilmot Whitney Real Estate
3/2/2009 Edition
The answer must be pride! Surely pride is the reason
residential real estate is not selling as briskly as it
once did. Certainly sellers don’t want to admit to
taking a loss if they sell and buyers each want to
believe they bought at the bottom of the market.
If not pride, perhaps sellers are simply unreasonable
for refusing to reduce prices and bargain-hunting
buyers are simply enjoying the hunt for a bargain.
No, it must be that the laws of economics are so
inexorable that they alone control market conditions.
Yet another possibility is that published speculation
about the desirability of available properties, or about
properties being overpriced and not worth buying, or
about the declining market lasting for years to come
all have something to do with a buyer’s willingness
to buy or a seller’s willingness to offer a property for
sale. Are such proclamations, mostly claiming to be
news or expert testimony, the driving force behind
buyer and seller decisions or are their decisions made
independent of such influence?
Much of the statistical housing information being
published daily seems accurate. Inventory is down,
sales and median prices are down and homes take
longer to sell than they once did. All true!
Also true, but not often repeated, is that interest rates
are among the lowest in the past forty years and there
are plenty of very nice homes for sale at fairly
reasonable, perhaps not bargain, prices. Why is it,
do you suppose, that the bad news is reiterated ad
nauseam while seemingly good news is lost in a
barrage of negativisms?
Consider the content of much of the published
commentary on housing, and on many other issues
for that matter. Most accurately report the facts but,
unfortunately, most also add discussion more akin to
editorial opinions. At least editorial opinions are
clearly labeled as opinions, just like this one! The
reader or listener understands that not all opinions are
valid or correct and decides for him or herself how to
value each. On the other hand, opinions mixed with
facts and labeled as reporting or expert testimony are,
in my opinion, typically misleading and potentially
dangerous.
So, now I return to the question asked earlier: are
published proclamations claiming to be news or
expert testimony the driving force behind decisions
or are buyer and seller decisions made independent of
such influence? I leave the answer to you.
We clearly have a serious housing problem. Why the
problem occurred or why it continues to exist will be
the subject of much public and private commentary
long after the problem is solved. It is clear to me,
however, that ill-founded speculation will not solve it
and may forestall our willingness to adopt helpful
solutions.
My purpose here is simply to suggest that the
suppliers of the public discourse take a critical look at
their contribution to the problem and that consumers
hone their critical evaluation skills for what they read
and hear. If erroneous facts and misinformed and ill-
founded speculation do, in fact, drive some segment
of the decision process undertaken by buyers and
sellers, a more balanced approach by contributors and
a far more critical analysis by consumers may be
important elements of a housing recovery.
END
Banker & Tradesman ©2009 All Rights Reserved
