Market Media Spin: "A Story of Partial Truths"

A few posts ago, I poked fun at all of us in the real estate industry, implying that we blame the media for everything that goes wrong. Although a grossly global accusation, there is also a smidgen of global truth to it. Unbiased reporting, as I understand it, is... well... unbiased. It should be like listening to both the prosecutor and the defense attorney. It should provide the truth, the whole truth, and nothing but the truth - so help them, God. But we know that's not how it goes down - almost ever. That's no fun. "How will we sell papers and magazines without The Spin?"

Recently, Doug Duncan, the chief economist for the National Mortgage Bankers Association, gave a "State of the Mortgage Situation" address to his lender peeps. He covered all the bases - both good and bad. He did a great job showing both the mess his industry helped create, as well as the emerging signs of recovery. However, a reporter took a machete to the talk and wrote a Doom & Gloom piece, titled: "New Mortgage Foreclosures Set Record." Although the title is true enough, he sure left a lot out. Had he been reporting on this year's World Series, he would have said: "Rockies Lose Big," and then hammered them for their weak showing. When the real story was: "Red Sox Win Again." The good stories told of the Red Sox dominance, as well as the fact that the Rockies were on the big stage for the first time, not faring so well.

Here's what the guy DID NOT choose to include from Mr. Duncan's speech:

1. 35% of U.S. homes don't even have a mortgage.
2. About 95% of all current mortgages are in good standing.
3. The foreclosure mess is really focused in seven states (the other 43 are ok).
4. There are big problems in Michigan, Ohio, and Indiana, due to manufacturing job losses. They likely would have had trouble, regardless of the rest of the market.
5. Florida (and especially counties like Flagler, where Palm Coast was "the fastest growing city in the U.S. for 2004-2005), California, Nevada, and Arizona are suffering from over-building. 25% of the foreclosures here are with speculators who finally lost the game of "buy & flip."
6. Only 25% of mortgages are "sub-prime," and of these, 75% are performing well.
7. In the 43 states where things are ok, foreclosures have actually fallen in 2007... down from 2006.

There... some good news. It's out there, but it's buried under the spin :-)

(Information for this article is excerpted from the January, 2008, "Agent Direct News," from Jacksonville, FL, and the original data is from an Inman News Report from 11/16/07)