I am so tired of the negative media constantly ranting about how horrible everything is in our business. It’s time for our industry to fight back against these psychic vampires who seek to suck every bit of hope and optimism out of us just to build their circulation.
Newspaper headlines and buzzwords abound, such as: “Two million people will lose their homes in foreclosure in the next two years!” “Sub prime Fiasco!” and “Mortgage Meltdown.”
These are the headlines we hear every day, yet where is the positive news about the real estate market? The answer is, buried in statistics on page 18 of section 5 of your newspaper, provided you can find them at all.
A September news article ends with the negative media’s favorite theme for scaring their readers and/or listeners: “Two million people will face foreclosure in the next two years.” Here are the numbers that the negative media did NOT report from that article:
1) Thirty-five percent of the homes in the U.S. do NOT have a mortgage.
2) Some 94.88 percent of the loans ARE performing.
3) The foreclosure problem in this country is really a story about seven states.
4) The biggest foreclosure problems are in Michigan, Ohio and Indiana. These are manufacturing states that had horrible job losses. Since 2001, Michigan has lost 300,000 jobs. These states would probably have had problems no matter what the market was doing.
5) The other four states — California, Florida, Nevada and Arizona — experienced significant overbuilding. Twenty-five percent of the foreclosures in these states are on properties that are held by investors who were speculating.
6) Only 25 percent of all mortgages are sub prime, and of these, 75 percent are performing.
7) In the other 43 states, foreclosures have fallen in 2007 from 2006 (data from Michael Clawson, vice president, Central Texas Mortgage). Furthermore, buyers who are waiting to purchase when the so-called bubble pops in California’s major metropolitan areas are going to be sitting on the sidelines, according to the latest data from the C.A.R. Realtor group. According to Leslie Appleton Young, chief economist for the California Association of Realtors, the areas being hardest hit in California are the outlying areas where there has been overbuilding. The resale market in California’s major markets continues to be strong. In fact, the closer you are to a metropolitan area, the better the sales are. In the million-dollar-plus price range, there has been essentially no change from 2006 to 2007.
There’s no question about the fact that there is bad news in some markets. What upsets me is that there is also a lot of good news that is either being buried or is not being reported at all.