The top story in our local newspaper the other day was about slumping home sales. The headline was:
Marin home sales plummet
Record low since data first tacked in '88
Sounds horrible doesn't it? It sure made me read the story even though I have no plans to sell my home anytime soon. Everywhere we look the media is talking about slumping home sales, foreclosures, bankruptcy, and corporate layoffs. Doom and gloom sells newspapers and keeps people glued to the local news on television so why not scare the hell out of everyone every chance you get. Homeland Security sure perfected the art of scaring the hell out of us after 9-11 with their color-coded terror alerts.
Now take a look at the second paragraph of the story in my local paper:
But the median single-family home price climbed to $990,000, up 5.9% from $935,000 in January 2007. The median single-family home price was $835,750 in December 2007.
That's one heck of a but…
The median home price increased 5.9% in one of the worst years in real estate history. And the median price increased over 16% in just one month.
So why does the headline scream doom and gloom? I'm pretty excited that the median price of a home in my county is $990,000 because the town I live in is always significantly higher than the median price. My house is worth well over a million bucks but my stomach was churning when I read that headline. They did their job and got me to read the article.
The article goes on to explain the overall sales declined in December, which is one of the slowest months in real estate, but they don't tell you that little fact. The media focuses on the negative and scaring the hell out of us. My neighbors are thinking of selling their house and renting because word on the street says our home values are going to decline 25% this year. Since my neighbor told me she was thinking about selling two months ago her home increased in value at least 16% but she's still thinking about putting the house on the market. She only paid $300,000 for her house 10 years ago and it's worth over a million today. Even if her house dropped 25% in value this year, she's still way in the black. Plus home prices in Marin County are always very stable and have never declined 25%, even over a 10 year period. We are consistently in the top 2 or 3 most expensive counties in the country.
So the media has successfully done their job and caught our attention. Their "shock value" headlines have us all thinking in the back of our minds that the real estate market is collapsing. They planted that negative seed in our subconcious mind that is making intelligent, rational people make irrational decisions about their homes. For some reason we keep reading the newspaper and magazines and watch the news, which are full of negativity. We're completely addicted to the doom and gloom and we can't stop. It's really sad that the media is exploiting human nature and scaring the hell out of us just to sell more advertising!