Don't call it a correction, call it 'buying opportunities'

In an article for Realtor Magazine online, the newly-appointed National Association of Realtors Chief Economist Lawrence Yun pens the same old story we heard from his predecessor:

"To a great extent, we can thank steady media coverage of the real estate market 'correction' for unfounded consumer concerns."

Consumers might be insulted to know that their concerns about the housing market are being labeled "unfounded." Any person looking to make the largest purchase of his or her life will most likely be paying attention to the market they are buying into and if sales are falling and prices are flattening and falling, there's reason for concern.

Aside from the idea that it's difficult to believe that consumers base their major purchase decisions solely on media coverage, there are other ways this argument doesn't pan out:

If you look at consumer confidence levels, the lows actually started when the market was still high (which by the way was also covered extensively by the media) or just starting to tip in some areas. Consumers' home-buying plans plunged to the lowest level in 10 years in September of 2005, according to the University of Michigan's Survey of Consumers. Something happened between July 2005 and September that year that caused their home-buying attitudes to worsen. A wave of negative housing press?

Maybe it was the economy, or hurricane Katrina, rising oil prices, home prices that had risen out of reach for many? No, Realtors are told it was the negative press.

It's disappointing to see the NAR economist play the media card. We'd expect something like this from the association's marketing and advertising campaigns (remember the one that proclaimed "Now's a great time to buy and sell!"?) But not from its chief researcher.

Yes, it is true that not all markets are suffering (repeat now: not all markets are suffering), but some definitely are in pain, big big pain. There's no way to cover that up and stop the press from reporting it -- even if you blame them unabashedly.

Yun also states in the article that, "If there's a correction in markets today, it's in home sales volume and housing starts, not in home prices. You see the effects of those declines in weakening practitioner income and construction employment. There's pain out there."

Many other economists also say that they're not expecting a crash in prices, but they are anticipating a long recovery -- longer than they first thought. "We're not at the bottom yet" is something economists have said over and over these last few months.

A recent post on this blog opened a dialog around the question "How bad is it?" and not one commenter denied that housing in the dumps. Practitioners are definitely feeling it -- but Yun asserts there's a distinction between that correction and what's happening to consumers:

"The media aren't making the distinction between what's happening to you (brokers and agents) -- fewer home sales, fewer homes coming online -- and what's happening to consumers, more buying opportunities."

Some would say "interesting word choice." Others would cough at the spin. How does this jive with your market?

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