Posted by Jonathan J. Miller -Thursday, March 9, 2006, 12:01 AM
Actually, its not on the cover, but in the spirit of the hype, it sounds more impressive.
Well factually, this Time housing story on Tueday: What Real Estate Bubble? [Time] is accurate. Other than that its simply a hype piece. It annoyed me and the article says a lot about mainstream media’s coverage of the housing market. I wasn’t going to post it until I read the post about it in Walk-Through. I thought I would pile-on since the NYT take on this was more or less what I believe.
Time magazine is a respected institution so when they publish articles like this, I get irriated at their departure from journalistic (albeit mainstream consumer) standards. From a journalistic standpoint (funny, but I am no journalist), this type of presention of the story is wrong in several ways:
The tag line Despite dire predictions ahead, U.S. home prices continue to soar is very misleading. The price differential over the past year was largely due to the spike in prices in the first half of 2005. Prices are not soaring today.
Its based on OFHEO numbers which are the best we have but the highest statistic that they present in the report includes refinance data, not sales data. Its still a mystery why OFHEO would choose to include refinance data.
The title: What Real Estate Bubble? suggests that there are no housing issues. This is based on year over year data with lighter activity in the second half of 2005.
The use of the word Bubble was sensational. The media gave up on the word bubble around December of last year and _soft landing_ became the description of choice for the housing market.
Still, there are signs of caution. â€œThe marketâ€™s been incredibly strong,â€ says OFHEOâ€™s chief economist, Patrick Lawler. â€œBut the rises weâ€™ve seen over the last couple of years just arenâ€™t sustainable.â€
Be careful what you wish for.