Who do you trust? News media give phony picture of housing market

    Some modest rays of sunny optimism broke through the clouds of despair in the housing market this past week after a few generally decent reports on the economy.  Bad momentum, like unemployment figures and housing starts, slowed significantly.  Good momentum, like the stock market, hit the accelerator pedal.  Puffed up Fed Chairman Ben Bernanke gave Wall Street -- and the media -- all the excuses they needed to return, at least for now, to those hopeful (and hypeful) glory days of yesteryear.  Although one week does not exactly make for a trend, those who buy and sell properties for a living, and those private owners who do so for lifestyle reasons, are all cheering for more.  Be wary, though, of those who cheer too loudly.

Media overestimate...again

    Like extras in Night of the Living Dead, the hypesters re-emerged from the woods this week to celebrate.  Consider this little piece of premature, hyperbolic headlining from USA Today:  "More homes get multiple offers; downturn may be nearing end."   Actually read the story that follows the headline and you discover that those multiple offers are mostly for homes in foreclosure, essentially speculators bottom-fishing bids, trying to take advantage of those poor banks that are saddled with the white elephants.
    Adds an official with the California Association of Realtors elsewhere inthe article, "When you begin to see people willing to fight for a property, that's a good sign.  We are beginning to see the beginning of the end of a disaster time."   Oh, really.  Have you noticed your state's unemployment rate at more than 11%?  What about the elimination of many state services because your government was on the brink of receivership?  Exactly who is going to buy these homes?  If you are looking for balanced assessments of the market, never, ever listen to an official of any real estate trade association.  They exist for one reason -- to drive business for their members.

Read much about the swine flu "pandemic" the last few days?

    Take with a lump of salt anything you read in the mainstream media about housing, and for a few reasons.  These are the same folks who totally missed the credit default swaps and sub-prime debacles?  They will only report things they understand, and they don't understand much and will not do the necessary research.  Like healthcare and any other subject whose complexity requires more than a junior high school education, the big time media missed the roots of the housing mess until they were obvious to everyone on Main Street.  Instead, we get sensational faux-disaster scenarios like Y2K and Swine Flu.  
    Newspapers have made themselves irrelevant.  If you are a careful reader, many mainstream articles appear to be written by interns, not seasoned, specialized professionals.  Stories about real estate include comments from industry experts who have a vested interest in the market, such as officials at the National Association of Realtors the media count on time after time.  Comments are no substitute for facts yet, typically, the only facts the media serve up are those from press releases from, you guessed it, the National Association of Realtors or other housing-hype sources.

The incredible shrinking newspaper

    Seasoned, professional journalists are leaving the print media in droves, many on their own, many without a choice.  My hometown paper, the Hartford Courant, has fired most of its reporters; the paper I pick up in my driveway every morning has shrunk by more than 50% in the last year.  Last week, parent company The Tribune Company let the managing editor go, and another quit in protest.  Big, respected papers like the Boston Globe are on the brink of extinction.  Any pro talented enough to produce a thoughtful, well-researched article has gone on to a new career or to an online media job (a few, sadly, have wound up on television as pundits).  Back-benchers are now writing (and editing) the stories that many of us count on as guidance for important decisions, like buying or selling a home.  
    For the most helpful information on the real estate market, look way beyond the media, to government data and a few blogs you learn to trust over time.  Seek out competing points of view, and look to the logic of the arguments, not the conclusions.  Look for as many relevant charts as your eyes can handle.   Then count on the only person whose judgment you can really trust -- yourself.