The Press becomes the Vaccine

At the beginning of the year, I predicted here that the newspapers would start printing stories that will actually help us.  Their headlines up to now have been less than kind to the real estate market, the real estate profession and especially the real estate mortgage profession.  One might suggest that their blatant hyperbole and lack of perspective bears some responsibility for the state of affairs as they stand (I know I have suggested it…).  So you can imagine my surprise at seeing the front page of yesterday’s Union Tribune.  I was genuinely excited by what they reported.  So helpful was it (once you read the entire article and work through the same old spin) that I suggest we take a copy to every client we can contact.

First and foremost, we can show them the layout, which so clearly reveals the Tribune’s true intent that there is no longer plausible deniability.  Across the top of the paper in bold, over-sized headline font it reads:

Foreclosures up 353%

in S.D. County in 2007

           

Another article, in the right column, above the fold has a headline in standard font which reads:

Fed slices

key rate

to calm

markets

Now I ask you, based on these headlines, which of these articles does the Union Tribune expect – even demand –you read?  The foreclosure article, of course; yet is that even news?  They have reported on this “story” ad nauseam.  There is nothing new here and very little that could be called news.  Down in that smaller column, however, is a HUGE story.  The Fed dropped their key rate a stunning three quarters of one point; “the biggest one day reduction… on record” according to the article itself.  Not only that, but it was undertaken during an emergency meeting, called at night, on a national holiday!  This is truly historic news, with the potential for massive impact on the economy, yet in our newspaper it plays second fiddle to any story where they get to use the word foreclosure.

Within the headline story there is cause for celebration, but you have to look for it.  I have gone through and done the math and here are the talking points I would raise with my clients:

• The numbers look horrific when posted in big letters across the top of the paper, but in reality we are talking about six-tenths of one percent  (.006) of homeowners in San Diego County that are in foreclosure.  Granted, this is up from the four-tenths of one percent  (.004) previous record and if it is happening to you it is a very large problem, but overall?  Six-tenths of one percent is hardly an economic problem for the community.  It merits mention somewhere in the business section… or possibly as a human interest story in the local section.
• Between 2000 and 2005 the home values have doubled in San Diego County.  From the high two years ago the values have come down 17%.  That translates into a 66% return on your investment, which is an annual return of approximately 8% on your money… and that is only if you bought at the bottom and sold at the bottom!  If you sold previous to this year your return was higher, in some cases substantially.
• The rate of foreclosures in San Diego County was only 62% of that in the state of California.  San Diego is once again leading the way.  If you want to invest your money, this is the place to do it.
• Finally, the rate of default notices, which is a precursor to foreclosure, was up only 128% or roughly 1/3 the rate of actual foreclosure.  This should signal a significant drop in coming foreclosures, even acknowledging the fact that a higher percentage of those receiving a Notice of Default end up in foreclosure.

Overall, this article, even with its intentionally misleading graphics and promise of depression inducing gloom, delivers some much needed good news.  We just have to know where to look.  Then we need to take responsibility as professionals and show our clients.  I end with this thought:

Within every problem there lies an opportunity; the more difficult the problem, the more rewarding the opportunity.

Filed under: BUYERS, POLITICAL & ECONOMIC FOLLY, REALTORS, SELLERS, The Press