When media coverage, industry interests clash
Market news draws wrath of real estate professionals
By Glenn Roberts Jr., Friday, March 21, 2008.Bookmarking Sites
A national real estate article published in a community newspaper in Elizabethtown, Ky., caught the eye and ire of several local real estate professionals, and brought home an age-old conflict between news coverage and industry interests.
The headline of the article, authored by Claes Bell, questioned, "Is this a good time to buy a home?"
Focusing on first-time home buyers, the article suggested that heightening restrictions in lending requirements, including high down payments and the risk of further foreclosures and price decreases, may not be the best fit for those seeking to become homeowners.
Local Realtors gave editors at The News-Enterprise an earful about the inclusion of that article in the newspaper's weekly real estate section.
They echoed a rallying cry that has been sounded by real estate professionals in other markets, too: that local real estate markets are unique, and reports of national market trends tend to overlook the fact that some markets are performing better than others.
At the core of the conflict is public perception of market conditions, and some real estate professionals are blaming the media for scaring away potential buyers and sellers from the market with stories that they say don't reflect local market conditions.
Industry professionals have also charged that bad news sells, and that news organizations are carrying stories that tend to exaggerate the market downturn.
Strategy to counter media coverage
Trade groups like the National Association of Realtors have fed into the fervor over perceived negative media coverage. A multimillion-dollar ad campaign by the Realtor group this year, for example, seeks to counter "some of the recent negative national media reports related to the housing market," according to a Web site description.
And Vicki Cox Golder, a Realtor who is serving as first vice president for NAR, detailed a strategy by the trade group that is intended to "generate positive media coverage about real estate opportunities in local markets." She said in her presentation, "I think that you will agree with me that one of the biggest issues that we face today is the media and how they report what's going on in the market."
The so-called "surround sound" strategy "is aimed at ... 'on-the-fence' home buyers who may be hesitant to jump in because of the negative things they are hearing and reading about today's housing market," and the strategy includes "an extensive toolkit and assistance from professional public relations firms."
News organizations are tasked with providing accurate information for their readers, whether their focus is on national or local news. In some cases, the truth can be hurtful to industry interests.
And newspaper executives who spoke with Inman News said it can be a difficult balancing act to satisfy advertisers and readers alike.
Scathing letter in Elizabethtown, Ky.
Wolfgang "Wolf" Parker, who is co-leader for an agent team at RE/MAX Executive Group in Elizabethtown, sent a letter to the publisher of The News-Enterprise to protest its publication of the national article that questioned whether it was a good time for first-time buyers to hop into the market.
"How irresponsible of you as the publisher to let that article run. That article has done additional damage to this housing market and to hundreds of local Realtors who advertise in your paper," he charged in the letter.
"Where would The News-Enterprise be if the Realtors did not advertise in your paper? I spend over $2,000 a month with you and am constantly being solicited to increase or add new advertisements. Perhaps I'll just spend my money on the Internet. I am furious and feel cheated. Nothing you say can fix what you have done," the letter states.
Parker told Inman News that while markets like Detroit or Cleveland may be suffering, Elizabethtown isn't faring so poorly -- and he doesn't want local buyers to get the wrong message from nationally focused news.
"It's a great time for buyers and there's just a slough of homes on the market. Why wouldn't you want to buy (here)?" he said. "The market has slowed down from where it's been in the past, but there is solid movement here." There is a large influx of military personnel coming to the area, he said, which has given some lift to the local market.
The media, he said, have "been getting hammered and rightfully so," for their national real estate coverage. "You guys make big money on bad news."
Consumers, he said, are definitely influenced by news about the national housing market, even if it does not hold true for local market conditions. "When (the media) beats a drum long enough, people are finally going to listen. You are going to hold on to your money."
He added, "I have a lot of people coming in here, saying they want to wait: 'I've heard that right now is not a good time to buy.' "
He said that others within the local Realtor group also had reacted negatively to the article that appeared in the local paper, and he did receive an apology from the newspaper.
Newspaper reaches out to industry critics
Ordway said he heard criticisms -- either directly or indirectly -- from about six Realtors in the Elizabethtown area about the article.
He viewed the input as constructive, and the newspaper has reached out to local Realtors and builders and offered the opportunity to contribute guest columns to the newspaper on a regular basis.
"As a small community newspaper in a market like ours, we're pretty responsive to requests from our customers. The challenge for our newspaper, as with any newspaper, is ... the precarious balance of being able to report accurately and intelligently whether locally or nationally," he said, while at the same time understanding the concerns of its advertisers.
"We look at the complaint in terms of how can we make an improvement to serve both reader and advertiser equally well moving into the future," Ordway said.
In addition to offering guest columns to industry participants, the newspaper agreed with a request by the Heart of Kentucky Association of Realtors local trade group to reprint a Wall Street Journal article titled, "A Good Time to Buy a House," by Shelly Banjo.
"We have a longstanding working relationship with the Realtor association. Clearly we want to be responsive ... while also maintaining the integrity of our news report," Ordway said.
The Realtor association actually negotiates an advertising contract with the newspaper on behalf of its members, and individual members decide what to contribute for their share of advertising.
Terry Shortt, who owns a real estate school and training company based in Key West and is familiar with the Elizabethtown incident, said that in some small market areas such as Elizabethtown, local newspapers remain a major advertising vehicle for the real estate industry.
When the market slows down, real estate professionals may pay more attention to where their ad dollars are going, he said, and there is the potential for more frustration with news coverage.
"They feel like the buyers are being scared off by the very people they're buying ad space from," he said. "They're just frustrated. I didn't hear any complaints, any grumbling, a couple of years ago."
Realtors seek improved coverage in Bend, Ore.
On the other side of the country, a Realtor group in Oregon has worked to educate the media about the state of the local real estate market and has at times been at odds with local media coverage.
Bill Robie, government affairs director for the Central Oregon Association of Realtors, said that even while the market was booming in the Bend, Ore., area, "there were concerns -- actually, significant concerns -- with how the housing market was portrayed in the local paper," the Bend Bulletin.
There seemed to be a "hint of gloom-and-doom forecast in there," he said, "even when things were going very good. Certainly members didn't feel it was a very accurate portrayal of what was going on."
And when the housing market shifted, "We started to do more outreach to the media."
The Bend Bulletin's coverage of the downturn has been "fairly accurate," he said, though the Realtor group, which has about 1,900 members, became concerned that "national coverage was dominating local conditions and that people weren't getting a healthy perspective on the local market."
He added, "Because of the overwhelmingly negative stories that paint the whole housing market with a broad brush, we had a media summit here about a month ago."
Reporters from local news outlets were invited to attend, he said, and an informal question-and-answer session was held to discuss local market conditions and expectations for market performance.
The intent, Robie said, was to "make sure that our side of the story was getting heard ... to make sure we are getting a fair shake from the media." The media summit was held in late February, he said.
Newspaper reporter fired
The recent firing of David Fisher, a business reporter at the Bend Bulletin, a local newspaper, drew the attention of an alternative weekly news publication, which questioned whether the matter had anything to do with the newspaper's market coverage and real estate industry interests.
The Bend Bulletin's editor-in-chief, John Costa, defended the newspaper's editorial product and said that the termination of the reporter had nothing to do with his coverage of the real estate industry.
He said he could not discuss specifics about the reason for his termination, though there was a "violation of a principle that any institution in the industry would observe."
The Source Weekly, the Bend-based alternative publication, published a report on March 10 stating that Fisher sent an e-mail message to the Bend Bulletin's human resources director alleging that a real estate article he wrote was edited to remove comments that were "skeptical of an imminent turnaround in the floundering real estate market."
That article, which was about a real estate forecast presented by an area appraiser, was edited "to remove any facts or opinions that tended to disagree with (the appraiser's) rosy predictions," according to the e-mail message.
The e-mail also alleged, according to the report at The Source Weekly, that there was a "pattern of editing that included misleading headlines, sources being banned from my coverage, story ideas getting spiked, and odd pre-story cajoling, all of which seemed designed by the executive editor ... to generate more favorable coverage of the local real estate market than I would have thought was best in the two years I have been assigned to cover it for the paper."
The Source Weekly also stated that the local real estate and building industry had embarked on a "Best Buyer's Market in 20 Years" campaign that sought to attract buyers and favorable media coverage of local market conditions.
Editor: Newspaper does not pander to industry
Costa said that anyone who reads the real estate coverage of the Bend Bulletin would be hard-pressed "to make a case that this newspaper is in any way pandering to the real estate industry."
"Last fall we had letters to the editor saying the belief of the industry in this town is (that coverage) is far too negative on them, not positive about them. But we have covered it accurately," he said.
Costa said he had even written a column in support of Fisher's coverage, and that the newspaper has no interest in "cooking coverage" to benefit the industry. The industry definitely has its spin on market conditions, he said, and "we don't cover the advertising campaigns."
Also, Costa said he has not handled a single request from a real estate professional or builder to can a story or produce a news story.
Some industry participants have suggested that the newspaper has the ability to exacerbate the housing downturn by focusing coverage on it, though he said it's "absurd" to suggest the newspaper has that kind of power. In response, he said, "At least give us credit for creating the (boom) market -- we never got that."
Fisher could not be reached for comment.
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Submitted by Thomas Lucier on March 21, 2008 - 5:23am.
If Realtors in East Podunk can't deal with reality, I guess the NAR is going to have a conniption fit when my upcoming book, How To Avoid Being Screwed By Realtors, is published in September! And if the NAR wants to pick a fight with me; they had damn well better pack a big lunch, because it’s going to be a long, drawn-out, no-holds barred, in-the-dirt brawl!
Submitted by Carol Best on March 21, 2008 - 6:07am.
I agree, the media has not been our friend. Remember a few years ago when the New York Times reporter absolutely slammed Realtors? I immediately sent an email and canceled my subscription!
Here's my spin on everything... check out this newspaper article from yesterday, in the Barrington, IL Pioneer Press. I'm trying to start a trend with the Realtors to STOP the media's bad news! http://www.pioneerlocal.com/barrington/news/851912,ba-realestate-032008-...
Copy and paste the above link, then let our actions speak louder than the media!
Carol Best
Re/Max Showcase
www.CarolBest.net
Submitted by Pamela Mackenzie on March 21, 2008 - 6:40am.
Speaking as a real estate editor who both edits press releases from Realtors and writes stories about the real estate market, I can tell you it's not easy to do! And whenever I have to write something negative, I always try to offer a balanced view, quoting local Realtors or others who can add a positive note.
Realtors have to realize, though, that the media did not create the mortgage mess. We didn't invent 100% financing and then give it to people who never should've qualified for loans. We didn't commit mortgage fraud. We didn't package subprime mortgages into over-rated securities.
The mess we are in now is not just another cycle, and until our national finanical house is in order, things are not going to improve dramatically. I'm sorry, but that's the way it is.
In the meantime, I continue to try to report the market in a balanced way, citing successful strategies for selling, reporting on local builder confidence and giving Realtors their say. My blog advocates buying a home, not waiting.
I just wish builders and Realtors would get as real as they expect the media to be and stop blaming us for the industry's shortcomings.
Submitted by Sol Sek on March 21, 2008 - 9:12am.
>>>>>>>>The mess we are in now is not just another cycle, and until our national finanical house is in order, things are not going to improve dramatically. I'm sorry, but that's the way it is.>>>>>>>>>
Pamela, I agree the current crisis goes beyond being just a cycle. This is a market DEMAND for change. The culmination of tighter lending guidelines, slow sales, foreclosures, commission models and innovations will force the industry to change its way.
We have a serious problem at hand but a band-aid isn't enough.
Submitted by Jon Strum on March 21, 2008 - 9:13am.
Over the past several months, tens of thousands of people in the mortgage, title and escrow industries have lost their jobs.
Homes have lost value so fast that the companies and organizations that track home values have never witnessed anything like it.
Last week, a major investment bank failed. And the bank's failure was mildly papered over by rescue efforts on behalf of the Fed which required the Fed to use powers it hadn't exercised since 1933.
And we haven't even touched upon foreclosures that are uprooting thousands of families while pressuring housing prices down even further.
These are the facts, folks. What we're seeing is NOT business as usual. It is the largest financial hiccup in modern history.
And our industry's response? The NAR's "now is a great time to buy" campaign, which just comes off as totally ridiculous to anyone who can think.
How should the media be covering this horrible convergence of events? Are we, as a group, so ethically blind that we would want the media to soften their coverage out of respect for our advertising dollars? That's not the way it works.
I can't believe that at this stage of the game it needs to be said, but the faster our industry acknowledges the pain people are going through, the faster we will have taken the very first step toward earning some credibility. The truth is, that it's pefectly understandable to find buyers on the fence. It's perfectly logical to find people who want to wait until the smoke clears. Why fight the reality of the market? And why attack the news media for reporting it? As realtors, it makes us look as small-minded and self-interested as many people already think we are.
Jon Strum
President, homsho
www.LARealEstateBlog.com
Submitted by Vito Boscaino www.ServingColumbus.com on March 21, 2008 - 2:26pm.
So Realtors are upset when writers use factual information as the basis for the articles they write? And newspapers should be punished for publishing factual truths? I find this line of reasoning to be ridiculous. Does this mentality not speak volumes as to why real estate professionals are not trusted by anyone? Do you really think the public is that stupid as to not understand what is happening in the martketplace?
I applaud the media for uncovering facts and truths and using data to back up their stories and articles. I believe that clients crave real information that is substantiated and based on facts and hard data.
If you can't deal with the factual realities of the marketplace, then you have no business whatsoever holding yourself out to be a professional in this industry.
The sooner people like this move on to find some other way to pursue a living, the better off this industry will be.
Vito Boscaino
Managing Partner, MBA
Help-U-Sell North High Realty
Columbus, OH 43214
Submitted by Vito Boscaino www.ServingColumbus.com on March 21, 2008 - 2:33pm.
An additional point - I find the NAR positioning on these issues to be contrary to the best long-term interests of the real estate industry. The NAR marketing campaign(s) appear to be pandering to a bunch of simple-minded, unsophisticated and unprofessional real estate agents.
If any of you, as so called real estate "professionals", continue to buy into the NAR marketing philosophy you are not only demeaning yourself, you are continuing to reinforce the image with the public at large that real estate agents are unprofessional, unknowledgeable and self-serving individuals that really do not know how to conduct themselves in a professional consultative manner.
Vito Boscaino
Submitted by Jim Lee, Knoxville TN Realtor on March 21, 2008 - 3:44pm.
The big flaw in all the real estate doom & gloom stores is that there is no such thing as "the national real estate market".
Instead there are many smaller geographic markets and each has it own micro economy that drives it real estate as well as the national and global economy.
Some areas are good, some are bad, but there is no "national market" that's in the toilet yet that's all the media seems to report.
Apprently the "if it bleeds, it leads" philosophy is still alive and well like this gem about the recent New York crane disaster.
"12 Violations and 37 complaints on crane construction site!"
Followed two paragraphs down by: "The city had answered 38 complaints and issued slightly more than a dozen violations in the past 27 months to the construction site - not unusual for a major New York City construction project like the 43-story condominium tower.
None of the violations was related to the crane, Mayor Michael Bloomberg said."
Submitted by Bruce Hahn on March 21, 2008 - 6:01pm.
The media may not always be right, but they always have the right to their opinion. And when the true facts support them, they are right. In fact all the data shows the overall real estate market is bad and any reporter who makes that observation is correct.
Yes, there are brights spots. Some local markets are doing well and in those markets it's entirely appropriate (and wise) for local real estate professionals to reach out to real estate writers and point out the strengths of the local market. And in those markets initiatives like NAR's "surround sound" strategy" are entirely appropriate and can help homeowners look beyond the national picture.
Browbeating and threatening the press is never appropriate. Even if the threats succeed, it won't work in the many parts of the country where the real estate market is in the dumps anyway. Home buyers see all the for sale signs, hear about the foreclosures on their neighbors and family, and hear about the dropping selling prices of the few homes that do sell. It is naive to think that very many buyers are so blind to the world around them as not to recognize local market conditions, and it would be unethical let the few who don't understand how bad it is make a purchase decision without a full understanding of the downside risks in that market.
In the many areas where the current real estate market is terrible the credibility of any messenger that suggests that now is a good time to buy will be questioned, whether the messenger is the local real estate writer or NAR's ad strategy.
Submitted by Jeffrey Nunn on March 22, 2008 - 1:20pm.
HMMMM...let's see if i have this right. Some newspapers are claiming it is a bad time for buyers to buy, but prices are down in almost every single market in America. So newspapers, is it better for buyers to buy when home prices are higher? If the newspapers point is directed to the investors looking to flip, then they should say so. If not, they need to find something that they understand to write about. Pretty simple. Homes carry a utility value and all the other greater benefits of home ownership. The media needs to quit looking at homes like they are some kind of stock and let homebuyers buy for the right reasons. They need a place to call their own, raise a family, build a life and reap some significant tax benefits AND BUILDING LONG TERM EQUITY so when they retire, they won't have to worry about a roof over their heads.
Submitted by Terry Shortt on March 22, 2008 - 2:10pm.
The point that the REMAX agent was making (in the original story by Glen Roberts) was that the newspaper editor was running stories that were not localized.
Papers running stories about real estate market condition in other communities should be balanced by an objective report on local market conditions. That’s only fair to the readers and to the local housing industry (REALTORS, builders, banks and everyone with a stake in the housing business)
I didn’t get the impression that the REMAX agent expected the local newspaper editor to fabricate a local story just to put a “smiley face” on local market conditions. He did expect the editor to be more responsible in positioning stories and to balance them with an objective local view.
The Kentucky newspaper (The News Enterprise) agreed to do just that (partly as a result of this story).
That’s a reasonable and fair outcome for readers and industry stakeholders, it seems to me
Terry Shortt, CRS, GRI
Broker, Instructor
TW Shortt and Assoc,
FL. Real Estate School
and Training Company
www.ClassesFormingNow.com
Key West Florida
Submitted by Shaun Greer on March 23, 2008 - 9:08am.
This happens all the time in my local market. Many news paper and article writers don't have a clue of what is going on in the real estate market. They just write headlines.
Submitted by Real Estate Marketing - Misty Lackie on March 23, 2008 - 1:06pm.
What a great topic this is. It was very interesting to see the Realtors comments on this article. Seems to me that most Realtors are very much in touch with reality and at least in the blogging world have been very open and upfront about the condition of the market.
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Submitted by John Single on March 24, 2008 - 5:25am.
I find it rather pathetic that those same individuals who so happily fed on the real estate market for so many years are now so suddenly displeased when reality no longer supports those fraudulent prices.
The media exist as the gaurdian of the public, and though they may report market-related information that does not serve the self-interests of a particular segment of business, they are serving the public interest and of those who purchase their product.
It is telling that real estate professionals lament the reality of their market and would compel a news outlet to lie in order to server their own selfish interests. It is a clear statement that the real estate profession is sick and needs to evaluate their ethical standing in order to avoid the repugnant manner in which they presently operate.
The public has the right to know the truth, and the efforts of NAR and realtors in general to attempt to stifle the truth and replace it with lies will hopefully illuminate the reason why these people do not deserve our trust or patronage.