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What Mainstream Media Says About The Real Estate Market versus Reality

By
Real Estate Agent with Market Advantage Real Estate

There are many that follow the real estate market through mainstream media and economist's reports and projections. What people don't realize is that most of these real estate market reports are using data that is 3 to 6 months old, if not older. And once they have a rough draft of the article or report, it has to pass through various editors and the placement of the article or report within the paper, magazine or television program has to be determined. The bureaucracy of these mainstream media organizations delays the release and further decreases the relevance ot the data.

What is happening in today's real estate market is best known through a current analysis (within the last week to 1 month) of the stats for the particular county, town and subdivision/community you are in. In Ashburn, Virginia, not a huge town by any means, the difference in the conditions of the real estate market can even be seen between two communities only a mile apart (Ashburn Village and Ashburn Farms). Furthermore, there is a large difference in market conditions for properties below $350K, between $350K and $700K and those $700K or more. The type of property and price point also greatly affect your approach to buying and selling.

Being "hyper-local" is the key to finding out the true real estate market conditions and how they affect you as a buyer, seller or investor.

You can determine market conditions and how they affect you through local real estate blogs or web sites that provide up to the moment data for your particular area or by speaking with a knowledgeable and experienced local real estate agent or local lender. The first is for those who wish to do the research themselves while the latter is for those who wish to have someone else do the research and share their expertise with them.

Here's an example of what can happen to you if you follow only what the mainstream media says:

I had a client who thought that the market was still strong in Loudoun County in the fall of 2005 because the mainstream media said so. They read reports on how it was still a "seller's market" and the the overall market was still "strong". Because of that, they wanted to list their home for more than what the last comparable one in their community sold for a few months before.

It was clearly explained to them that the market had turned as of the summer (2005) and that properties were now selling for less than what the exact same property sold for just one or two months ago. Nevertheless, they chose to ignore the advice and stick with media reports and list it at $975K.

To make a long story short...they ended up chasing the market down for months and months and instead of selling their property for around $925K, the market value in the fall of 2005, they sold it for less than $800K.

They lost over $125K plus the cost of paying the principal, interest, taxes, insurance and HOA dues for almost a year (almost $40K). That's a loss of over $165K.

That's one heck of a hard (and expensive) lesson about mainstream media versus reality to learn.

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Comments (2)

Debbie Cook
Long & Foster Real Estate, Inc - Silver Spring, MD
Silver Spring and Takoma Park Maryland Real Estate
I think the newspapers are at least 6 months behind in my area.  Also, I just did 2 Listing Appointments with Market Analysis.  The two properties were 5 miles apart from each other in the same city.  Both were single family homes.  I found that in the first area 59 out of 100 houses were selling or "being absorbed" in this first area.  In the other area (only 5 miles away in the same city) only 16 out of 100 houses in that area were selling!  it is all ULTRA local. 
Mar 31, 2007 07:46 AM
Joan Snodgrass
Midamerica Referral Network - Kimberling City, MO
The drive-by media is so frustrating in their reporting.  If it doesn't bleed - it doesn't lead.  Good report, thanx
Mar 31, 2007 09:08 AM