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Better Sell NOW!! ... Blockbusting, the Media, the Public, & Us

By Christina Botteri

Real Estate Agent with REeBroker CA Lic #01341858

December 20, 2006 02:44 AM

This started as a response to this post, but grew into it's own...

The media attacks on Real Estate is a serious issue.

I think it's fair to say that individually, we all crank about "those darn reporters" and how they are unfairly treating the real estate market, etc. I joked about it just yesterday.

In Sacramento, the paper and local tv news, together with the national-level media, have been beating the living stew out of the Market for the past 2-and-a-half years. Every week, a new headline in the paper, "Housing Bust Looms," "When the Bubble Bursts," "Housing Bubble Getting Bigger"... The headlines are inflammatory and prejudicial, and often the news itself is just barely germane to our area. (case-in-point, a headline read "sales decine record amount" and it was about a town/area in Pennsylvania ... we are Sacramento, CA)

Are they lies? Sadly, no -- that would be too easy. But they are manipulations, tilts, spins, and shades. It's a showy headline with a non-relevant article; it's about what's not reported; it's smart and subtle - and I'm sure not quite intentional (but maybe just a little).

In California (and I'm sure lots of other places, too) we have a concept called Blockbusting. It is a bad thing that you can lose you license over.

In short, Blockbusting is a real estate practice in which real estate agents encourage homeowners to put their homes on the market by exploiting fears of change in the neighborhood that will result in declining home values. Most often it is associated with a change in the racial composition of the neighborhood, but the blockbusting part is actually the exploitation of fears, not what the fears might be.

"Better sell, there's a freeway coming" = "better sell, there's a (pick a race) family coming" = "better sell, you have shifting soil and an earthquake is due..." = "better sell, the housing market is about to bust."

I'm sure these media guys are just trying to get people to buy, read and watch, etc., but if we as Real Estate Professionals said these things, we would lose our livelihood, and get fined, and sued, and small dogs would run up and bite our ankles really hard (not hard enough to bleed, but really hard nonetheless... hard enough to be limping, therefore making it easier for the next small dog).

I'm not saying I have all the answers, but I think we as an industry are a very powerful - and very disorganized - voice. Imagine if we got together and said in one voice, "enough." We would be doing a service to ourselves, our clients, and our communities. All we have to do is decide.

I have a few ideas about this, but I would be very interested in hearing your thoughts...

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Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

Very original thinking. Perhaps we could get the FTC to investigage the news media for blockbusting.

Problems is that REALTORS have taken such a bashing from the media for so long, buyers and sellers simply will not listen to us.

We could really help folks navigate their way out of this dead market if we didn't have to fight the government, the media and the humongous number of licensees that have to be fed.

This matter has to be approached as a market correction. I spoke with an owner yesterday who believed that if the average price in her community comes down by $25,000, she's LOSING $25,000. Good grief, their property has doubled in price in the past four years to $725,000 and she believes she's losing money by a softening of prices.

I do suspect that prices will fall substantially in some areas. But, surely not to below what is was 4 years ago and not below that number plus a reasonble appreciation.

Dec 20, 2006 07:04 AM

Jeff Dowler, CRS

eXp Realty of California, Inc. - Carlsbad, CA

The Southern California Relocation Dude

Great post, Christina, on a topic that has plagued us all for very long. There was some discussion among the larger brokerages in our area about boycotting the papers and not advertising in protest to the onslaught of negativism.

Let's face it - ugly, bad news sells. It fascinates us. It's in part why news about celebrity divorces, affairs, durg scandals, etc grab our attention adn scream from teh front pages of bvarious magazines. It's why the media loves to put pictures of people suffering on the front page of the paper, and why stories of trauma, tragedy and more brings readers to the papers and TV . Good news, generally, just doesn't make money like bad. What is disturbing is the slant that the media puts on the news about the market - yes, there have been major corrections, but we certainly have not seen the recession of years past.

Enough IS enough, but can we have an impact? I'm pessimistic, I guess, but I think the chances are slim.

Dec 20, 2006 07:08 AM

Sean Carroll

The Get Off Your A$$ Academy - Manhattan, NY

Real Estate Speaker and "Expert" Coach

I think the sad part is that some sellers will listen to EVERYBODY except us when it comes to learning the truth. Although I can understand why, as many of the agents I have been negotiating with lately really have no clue as to what is actually happening with the market. I cannot see how these folks will survive during this market correction.

Dec 20, 2006 07:12 AM

Anonymous

Mikey

Where was everyone saying the media is bad when the media was reporting all the great sales numbers and how well real estate was doing?

Blaming the media for selective perception is in and of itself selective perception.

The media reports the numbers that the NAR gives them, when the numbers go up, everything is great, when the numbers goes down, life is bad.

As for the bubble stories, once the numbers went up really fast, the news asked "Why?" (funny they might ask that) and got no good answer outside of some academics (Shiller for example) saying it is a bubble so they reported a bubble.

The easiest way to counteract news (positive or negative) is to show some numbers (sales volume, inventory, and median) with historical context (show the last ten to fifteen years). The numbers on that scale really cant be argued with, and either they show a bubble in your local area, or it doesn't. Buyers and sellers will appreciate the logical and rational approach instead of the standard realtor lines they always hear.

Dec 20, 2006 07:58 AM

#21

Sam Chapman

Lakeway, TX

All the doom and gloom gets to people thinking of buying in Austin in a different way. They are scared to death that if they buy now their value will drop in a year. This is so opposite of reality. The Austin market is one of the healthiest in the country right now. But - the power the mamipulative and sensationalistic media has over people is everywhere.

Dec 20, 2006 07:58 AM

Ken Smith

Suburban House Hunters - Arlington Heights, IL

Jeff is correct that the main issue is that people don't buy boring headlines "The real estate market is stable" will not sell papers like "Will your home be worth 20% next year?".

Getting the news out to your client base and farm areas is a start. Let them know homes are still selling, let them know if prices are still going up, let them know interest rates have come back down and it is a great time to move up. It starts with one voice.

Dec 20, 2006 08:10 AM

Tony and Suzanne Marriott, Associate Brokers

Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ

Coldwell Banker Realty

Time for us real estate brokers to step up the blogging and podcasting to combat the BS from the mainstream - we know it all - press.

Dec 20, 2006 08:26 AM

Christina Botteri

REeBroker - Roseville, CA

I went back and researched Sacramento Bee headlines for Q4, 2002, and then did the same for Q4, 2005.

In 2002, the Real Estate market was on fire, with average annual appreciation rates at 21% with some pockets as high as 31%...

Here's what the Bee had to say...

State home sales stay strong
The median price for resale houses in Sacramento County hit record $211,500 last month. Published on December 27, 2002

Slower area home market seen
Most experts see a drop in sales and single-digit price gains as the state faces big budget cuts. Published on December 15, 2002

Fix and Sell
Real Estate spike spells profits for investors who spruce up old homes. Published on December 1, 2002

Real estate renaissance
Buyers see golden opportunities Published on December 1, 2002

Anxiety on the rise
At best, some believe, the economy is going nowhere. Published on November 2, 2002

Foreclosure threat eases Published on October 31, 2002, Page D1

Rental market hits equilibrium
Capital-area vacancies flatten out, and tenants see little increase in rents after recent rise. Published on October 21, 2002

Cancer fear scaring some buyers
Residents worry about their area's housing market. Published on October 13, 2002

Through the roof: New-home sales, prices set records in capital region Published on October 11, 2002

Investors turning to real estate Published on October 6, 2002

Want to buy a house? The line starts here Published on October 5, 2002

Taking stock in real estate: Be careful Published on September 29, 2002

Mixed bag, right? This was when every day was a record-breaker.

--- VERSUS Q4 2005 ---

Homes sales fall 21 percent Published on December 20, 2005

Realty feels a chill
Days of torrid buying, prices giving way to 'for sale' cycle Published on December 18, 2005

Sales of new homes plunge
Canceled deals push November rate to the lowest level since September 2001. Published on December 15, 2005

Study: Housing slowdown to hurt state Published on December 7, 2005

Buyers gain upper hand as house sales decline Published on November 18, 2005

Riding the wave
Real estate agents may face big shakeout Published on October 20, 2005

Housing market cools off
Region's drop in home sales and large inventory appear to give buyers an edge. Published on October 19, 2005

State economy on slow track
Housing market slowdown is major worry, forecast says. Published on September 28, 2005

Home resales slowing down
More houses are on the market, but area median prices set records Published on September 16, 2005

Buyer, be aware
Economy depends heavily on real estate Published on September 14, 2005

These are all front-page headlines, btw.

-------

I think we need to change the conversation, and at the same time acknowledge reality. And there is a way to make it "sexy" enough to print...

Dec 20, 2006 08:51 AM

Eddy Martinez

Nationwide Funding Group - Highland Park, CA

I agree with you Christina , unfortuantley the media will criticize something they have no clue about. As real estate professionals we will always have animosity from outsiders towards us. As long as you take care of your customer you will be fine.

Dec 20, 2006 09:10 AM

Robert Hammerstein -

Christie's International Real Estate - Hillsdale, NJ

Bergen County NJ Real Estate

Whatever the Sellers believe, the Buyers will prove or disprove and whatever a Buyer believes, the Seller of the house they want will either prove or disprove. So what it boils down to is that the media can sway people whatever way they want and the market will do it's own thing. We as agents have to work within the market and continue to just do what we know how to do. The selling may not happen as easily as it does in a Seller's market but we have to bend with whatever trend the current market is doing and give our customers the same tried and true customer service.

Good reading but pay attention to what your customer needs and the news will only have so much power.

Lisa

Dec 20, 2006 09:27 AM

joanne Douglas

Terrie O'Connor Realtors - Ridgewood, NJ

Absolutely could not agree with you more! Maybe NAR should go to the FCC with this one...

Dec 20, 2006 09:31 AM

Chris Hendricks

Walnut Creek, CA

Maybe you can recommend the various editors in town do a feature piece on "Editorial Demagoguery" since having a basis in fact seems no longer to be a prerequisite for writing or reporting a story....

Dec 20, 2006 10:29 AM

Carmine Pagano

ERA Team IV Homes - Poughkeepsie, NY

Hi Christina,

Thanks for responding to my Sell, Sell, Sell blog post

Obviously, What sells newspapers in Poughkeepsie, NY is the same as what sells newspapers in Sacramento, Ca. and just about everywhere in between.

I guess we would be more angry if the paper read "It's a great time to stay put" or "Don't Sell, Don't Sell"

As a homeowner I want the paper to read - "Home prices rising, Great time to buy"

As a buyer I want the paper to read - "Home prices falling, Great time to buy"

As an agent I guess I should be alright with either one, since really all I want is for transactions to occur.

The reality has been, with real estate, that when home prices fall (if ever) you should buy and if home prices rise, you should still buy (most of the time)

Getting the media to write that..... good luck

Happy Holidays

Dec 20, 2006 11:07 AM

Rob Robinson- Lehigh Valley PA

Bertrum Settlements (Title & Abstract) - Allentown, PA

Most reporters are still renters?

Wow. Interesting thought.

I figured most Realtors are still renters :^0

Dec 20, 2006 11:49 AM

Harper Team

J Rockcliff Realtors - San Ramon, CA

Blockbusting - When I saw the title I thought this would be about videos,,, just kidding. Ain't it the truth - gotta love the media's new mantra - as long as it sounds believable, it's good to go.

Dec 20, 2006 03:37 PM

Christopher Smith

EquityScout.com - Houston, TX

The market is what it is. The media can be annoying (on all fronts, not just real estate) but over the long term the media doesn't control property values. Consumers do, pushed by fundamental economic factors. You're missing the real issue in complaining about the media.

Likewise, the National Associaiton of Realtors is tilting at windmills with all it's efforts trying to convince the market that everything is rosy by sending David Lereah out to chat up every stakeholder in the country.

Realtor solidarity isn't the answer. In fact it's part of the problem. Look at the growth curve for NAR members in the U.S..

Wow. That's a lot of realtors...eight times as many now as back in 1970...and there aren't eight times more home buyers/sellers as there were back then.

The field is getting more crowded each day, the market is getting more challenging, and technology is making things more transparent - which will challenge commissions. Agents who adapt and evolve will thrive in this environment - but that will require agents to discard a lot of the current mindset.

Dec 20, 2006 05:26 PM

Suzanne Marriott

Keller Williams Arizona Realty - Anthem, AZ

Associate Broker, CLHMS, e-PRO

Should I sell or should I go now - la la la.... Perhaps blogging about the real facts in real estate and educating the consumer would be a help!

Dec 21, 2006 01:21 AM

Arthur Chapman

William Raveis - Newport, RI

Well said and with great humor. I have a weekly radio show here in Newport, RI and I have bee saying exactly your point for some time now. I've always been very analytical when it comes to the market and have been charting our markets for about 10 years. The media started the "Bubble" talk in late 2004, pushing many consumers to put their house on the market. "Well honey, we better put the house on the market now before it's too late". Supply of single family homes in Newport shot up 40% in 6 months. I am confinced that this was fueled by the media. The GOOD news is that prices HAVE NOT DROPPED! In fact we are flat this year and some surrounding communities are up in the 10% range! Supply is dropping now and we are now under a 10 month supply, down from 14 months in August.

About a month ago the Providence Journal ran an article with the headline "More evidence of the Real Estate Slowdown" in which they were writing on the drop in building permits and how this is evidence of lack of confidence in the market. We are a very small state with the highest density per capita in the country. We don't need any more supply, we are getting a bit cramped as it is!! Anyway, they cited that Portsmouth RI building permits "plummeted" 30% this year. Last year was 10, this year 7. I had a fit. I was nearly screaming that weekend on the radio show. A lot of callers didn't understand - but it is up to us as "market makers" to inform them of the GOOD NEWS. Fewer building permits equals more apppreciation of most people's single largest asset!

Thanks for helping to get the word out. Watch out for the small dogs!!

Dec 21, 2006 01:56 AM

Melissa Mullany

The County Land Company - Saint Charles, IL

Blockbusting that's an interesting thought, and a good one at that. Here in the Far, Far West Chicago Suburbs, we have taken a beating. Media absolutely have only fueled the fire, although, Individually, I do think that most people take it with a grain of salt, at least I would hope. But the problem is when you get society as a whole involved, and then the groupthink phenomenon occurs. All of a sudden the "group" starts deciding that the real estate market is dead, and then thoughts go into action (or no action as in the case of our beloved real estate).

I think it would be great to fight back, I'm in for a fight, but media is always there, and doom always appeals to humans. Although I was happy to see NAR try to do something to combat the negative publicity, I think that their ads in the newspapers were a weak effort.

Dec 21, 2006 02:42 AM

"The Lovely Wife" The One And Only TLW.

President-Tutas Towne Realty, Inc. - Kissimmee, FL

We wish you a merry Christmas! We wish you a merry Christmas! We wish you a merry Christmas And a happy New Year! Glad tidings we bring To you and your kin! Glad tidings for Christmas And a happy New Year!

Broker Bryant and The Lovely Wife (pretend we are singing it works better like that) ROAR!

Dec 23, 2006 01:18 PM