The so-called housing bubble has been a media fixation for five years, so with news that the median price for existing homes is down slightly from last year, it wasn’t surprising for the broadcast media to jump on the story.
“If the housing bubble hasn’t burst, it sure is leaky,” anchor Katie Couric teased at the open of the September 25 “Evening News.” Later when introducing Bill Whitaker’s report on the new housing numbers, Couric promised viewers a look at “a buyer’s market.”
Yet Whitaker opened his story not with bargains for buyers but one San Francisco couple’s trouble selling their first home.
“Dana and Karen Salisbury didn’t need today’s report to know the once-lofty housing market was falling. They bought this retirement home banking on selling their house in the Bay area for $2.1 million, a reasonable price in their neighborhood,” Whitaker began.
Whitaker then pointed to a “downtown condo boom” that has “turned into an overbuilt, overpriced condo glut” in the City of Angels before forecasting “a steady slump in housing prices not just here in the blazing California market, but in all price ranges, all across the country.”
At no point in his story, however, did Whitaker mention that while nationwide the median price for existing homes fell 1.7 percent, it actually rose 0.6 percent in the Western states over August 2005.
Of the September 25 evening newscasts, CBS gave the most unbalanced picture while NBC gave viewers an optimistic read, emphasizing strong home values and a buyers’ market. ABC briefly dispatched the news in a brief item read by anchor Charles Gibson.
NBC anchor Brian Williams began on a sour note, warning that “according to a lot of economists and analysts, the housing bubble has indeed and officially deflated.”
Of course, other economists take issue with that assessment, among them Bernard Baumohl of The Economic Outlook Group. Baumohl told Reuters that while “we're very close to the bottom of the housing market,” he expected that “By the first quarter of next year, we'll start to see a rebound.” In the same Reuters article, Wachovia Bank economist Mark Vitner told the news service that “the worst of the drops” in housing value “are probably behind us.”
What’s more, contrary to Williams’ gloomy intro, reporter Anne Thompson gave an overall upbeat picture, both for those in the market to buy and those who own already.
Explaining that the price drop resulted from “too many houses for too few buyers,” she went on to cite Jack Kyser, Los Angeles County Economic Development Corporation’s chief economist, saying the real estate cool-off would not harm the economy.
“It won’t be like the mid-’90s because the economy is strong,” Kyser told Thompson.
What’s more, concluded Thompson, while the real estate market is becoming a buyer’s market, “Analysts say the big losers” among owners are “speculators who bought last year at the top” and expected to resell for quick cash. On the other hand, she added, “for most other homeowners,” they “should be okay because they’ll still be able to profit from double-digit appreciation rates during the boom.”
The Business & Media Institute has covered the media’s five-year fixation on the housing bubble storyline. “Sensationalism often sells. We’re still looking at the third-best year in housing history,” a National Association of Realtors official told BMI in an August 24 article. “Coming off of five years of strong sales, you can’t sustain that forever. When things start normalizing, it’s easy to compare to the best year ever, to say the sky is dropping.”