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Columns: Housing Market Teetering – You Didn’t Read About It In Your Community Newspaper
By Mike Archer. In “Meaningful Real Estate Market Coverage – Mea Culpa”, we admitted to the fact that we are not able to do a proper job of covering the real estate market in the Fraser Valley.
By tacking against the wind, we’ve tried to at, a minimum, provide some balance to the press releases from the real estate boards in the Valley by sifting through them for the statistics we feel are important to our readers rather than the information summarized in the headlines on the releases which, most often represent the interests of realtors.
And so; when the press release head line says something like, “Sales up, listings on the rise”, we’ve looked at the statistics in the release and found facts behind the headline. In the topsy turvy real estate market of the past few years, the facts behind a headline like the one posited above have been likely to reveal that, while month-over-month sales inched up, year-over-year sales dropped substantially.
Similarly, in the simplified world of press release headline writing, presenting the rise in listings as though it were good news can often be disingenuous as a rise in listings combined with a drop in sales usually indicates the market isn’t moving and prices are about to drop.
In “Bad Marketing In The Age Of Persuasion”, we spoke about the advent, during the last generation, of the marketing expertise developed by people in all sorts of occupations, none of whom have any real expertise in marketing at all.
We also spoke of the business needs of newspapers changing from the days when they depended on readers at least as much as they depended on advertisers for their revenue. The interests of the two sources of revenue constantly clashed and those who became publishers developed an ability to manage that conflict so that their readers got the truth.
With no revenue coming from readership and with the advent of the advertising manager/publisher, the balance seems to have changed.
The Fraser Valley real Estate Board does its job well. But its job is not to inform readers about the real estate market. Its job is to influence the market in as effective a manner as possible on behalf of its members – realtors.
The interests of realtors, while perfectly legitimate, are not necessarily the interests of readers or, for that matter, buyers or sellers.
It has been months since there has been any serious coverage of the Fraser Valley real estate market in the local chain-owned newspapers.
Here’s what we found:
Housing sales slow in valley
But prices, new listings, are up in new year
Home sales this January were the lowest since the start of 2009, but Fraser Valley realtors also saw one of the highest numbers of new listings come on line last month in the past decade. ..
This is good news for home hunters, said board president Sukh Sidhu.
Housing bubble fears just hot air: Economist
Helmut Pastrick has heard the growing talk from other financial analysts that a real estate bubble or “craze” in Vancouver has left the condo market ripe for a crash.
So far, he doesn’t see it.
Spring sales heat up
Warmer spring weather has heated up the local real estate market, with the Fraser Valley Real Estate Board reporting a 13 per cent increase in sales from April to May … on par with May sales in 2011.
New listings are also up five per cent from April and up eight per cent from May last year, bringing the number of homes on the market to 10,826, also an eight per cent increase over last year.
Sounds like things are hunky dory in the real estate market. As a matter of ‘fact’, they seem to be heating up.
Compare these local headlines to what has actually been going on in the real estate market …
- The federal government has intervened three times in the last twelve months to ‘cool down’ the overheated real estate market
- The Bank of Canada has repeatedly warned that Canadians have been taking on too much personal debt – especially in the housing market
- Having missed the housing market meltdown which occurred in the US in 2008 because of old banking and investment rules and regulations which kept our bankers from making the same dreadful mistakes, the federal government has repeatedly warned we are heading in the same direction if something is not done about the growing housing bubble
There’s much more but suffice it to say … you haven’t read about any of this in your local newspapers. The fact they all carry special real estate sections may have something to do with it but the more likely explanation is that, since bad news is bad for business and they survive entirely off of advertising from the retail business community, it simply hasn’t entered their minds to tell their readers the bad news in real estate.
How about this bit of real estate news …
Housing Market Teetering
In an incisive column in the Vancouver Sun entitled, “The housing market is teetering. Happy now?”, Sun columnist Pete McMartin wrote,
“Meanwhile, Metro’s real estate market is holding its breath. Or possibly it’s stopped breathing. It’s hard to tell.”
“Sales in May for all forms of housing across the Multiple Listing Service were down more than 15.5 per cent from last year, and the lowest for the month of May since 2001.
“The news for detached homes sales was even worse: They were down 25 per cent for the same period last year.”
(Commenting on these numbers, the resolutely sunny Real Estate Board of Greater Vancouver decided this was “indicative of balanced market conditions.” But then the board would have viewed the crash of the Hindenburg as the result of “normal deflationary conditions.”)
You didn’t read about that in your local community newspaper.