While a real estate industry leader is being chided for misleading consumers into thinking the doomed housing market was invulnerable, today's realty industry statistics continue to muddy the waters of information by not revealing how deep the doom has become.
by Broderick Perkins
© 2008 DeadlineNews.Com
Unauthorized use of this story is a copyright violation -- a federal crime
Deadline Newsroom - You'll get more accurate and complete news about the state of the housing market from honest, professional journalists working in major media than you will from the real estate industry.
That should go without saying.
But it needs to be said.
Professional journalists, those who write honest news, are supposed to be on a quest to crank copy based on unbiased reporting and corroborated facts that reveal all sides of the story.
On the other hand, a real estate industry leader recently confessed that his calling was to "put a positive spin" on real estate news, even at the onset of a housing crash responsible for triggering the greatest economic downturn since the Great Depression.
In a CNN interview, "Confessions of a former real estate bull," past National Association of Realtors (NAR) chief economist and former Move, Inc. executive vice president David Lereah explained it thusly: "I worked for an association promoting housing, and it was my job to represent their interests."
(Read the complete comments in their full context.)
Okay.
Fine.
Professional journalists work for organizations promoting the right to know and the same First Amendment rights that allow Lereah to fudge.
Who are you going to believe when it comes to what's likely to be the most valuable acquisition you'll ever complete?
Industry mouthpieces who spin, slant and filter the news because of paycheck-induced pressure or professionals whose job it is to represent basic constitutional rights?
Think about it.
Journalists -- true, professionally trained and employed journalists -- also write the first draft of history.
Due to that calling, regardless of what they are paid or who pays them, their careers and credibility are at stake if they fudge for any reason.
Journalism, when practiced on a professional level, is specifically designed to allow you to be the judge, not to tell you what to think, read, believe or do. Journalists -- again, real, professionally trained and experienced journalists working for bona fide media outlets -- get fired if they make stuff up or purposely distort the news.
Real estate industry "news" simply isn't the full story. It comes from a specific point of view. It's biased.
For example, NAR, Lereah's former employer, continues to offer a "Pending Home Sales Index" it describes as "a leading indicator for the housing sector."
Hooey.
The index is "based on pending sales of existing homes" only, according to NAR.
An unknown number of foreclosed and distressed properties, so-called REOs now owned by banks that couldn't sell them at auction, render ridiculous forecasts based solely on homes visible on local and national multiple listing services (MLS).
Those simmering REOs could mean the housing market is in worst shape than the public thinks if it relies solely upon real estate industry numbers, according to CNN, the same news organization that originally reported Lereah's spin.
CNN says in"Flood of foreclosures: It's worse than you think," foreclosures yet to hit the market mean there is far more excess housing inventory than current real estate statistics indicate.
When that unknown supply of homes hits the market, the already very depressed housing market could further implode. Those unaware of the condition or mislead by incomplete data could be … well, we can't print that word.
More inventory means lower prices and lower prices lead to more foreclosures.
CNN's report is based on RealtyTrac's recent revelation that there are far more foreclosed properties listed in its database than foreclosed homes listed in the multiple listing services (MLS) maintained by real estate agents.
Based on listings in four states, California, Maryland, Florida and Wisconsin, RealtyTrac found that the MLS listings included only one third of the foreclosures RealtyTrac has in its database.
RealtyTrac has a total of 1.5 million bank-owned properties on its site.
NAR's statistics are based on MLS data and in November there were 4.2 million existing homes for sale a 11.2-month supply at the current sales pace.
But without including foreclosures on the market and those yet to come, those record high NAR figures, as a "leading indicator," far underestimate the true condition of the housing market and any recovery could be much further down the line than some realty industry "experts" predict.
Lawrence Yun, chief economist for the National Association of Realtors (NAR) conceded to CNN "Many properties that should be listed on the MLS are not listed on the MLS."
Get news that really hits home. Get it here. Get it from national, regional or local real estate news outlets.
Just make sure it's real news and not information slanted by marketing, advertising or employer pressure or otherwise crafted to drive you into a major transaction that isn't sound.
• "Rather than the hiss of losing air or a louder pop from sudden deflation, the housing market looks more and more like a powder keg bristling with short fuses." - DeadlineNews.Com, August 2, 2005
• "If a time arrives when there are too many risky loans and the economy hits a recession, many homeowners could default on the American Dream and take the economy down with it." - DeadlineNews.Com, April 14, 2005
• "The industry has done a fine job of bringing the working poor and others into the realm of home ownership, it hasn't done a good job of teaching them how to hold onto their homes." - DeadlineNews.Com, March 31, 2004.
© 2008 DeadlineNews.Com
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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!
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