That line was made famous by Ronald Reagan when he was running for office against President Jimmy Carter in 1980. It was used by then Mr. Reagan as a way to diffuse opponents who harped upon the same issues over and over.
Well the media is at it again. The media loves its headlines and of course they need to sell papers so itâ€™s not put past them to choose a sensational attention grabbing headline and find data to support it.
Take the August 19, 2010 report on home sales in the Bay Area. The headline in the San Jose Mercury read â€œPeninsula home sales plunge in Julyâ€. Define plunge?
They reported, â€œAfter steadily rising for several months, Peninsula home sales plummeted to near-historic lows in July as demand remained tepid and the federal homebuyer tax credits that had helped caffeinate the marketplace in the past year finally went away".
When were these â€œnear historic lowsâ€? How near and how low were they?
Clearly the article is saying sales are down, and they are, but they fail the test of balanced journalism when they neglect to add the caveat â€œas expectedâ€.
The accuracy of their article is subject to scrutiny as well. I reviewed our own analysis which we do every month since I didnâ€™t recall being impressed by the large discrepancy in year-over-year sales mentioned in their article.
Our data is mined from the Multiple Listing Service. It doesn't contain all home salesâ€”just ones which were listed with real estate agents. The percentage of homes which transfer ownership without the involvement of a real estate professional remains consistently a small percentage of all the homes which transferâ€”consistent being the operative word since the delta from one month to another is negligible.
Our statistics showed 385 single family homes closed escrow in July 2010, down from 393 in July 2009. According to our data the number of fewer sales this July compared to last were just eight, or 2%.
The San Jose Mercury claimed it was the lowest month for home sales in 20 years. But how many fewer homes sold? They donâ€™t say. They also donâ€™t mention that Dataquick, the source cited in their article as the resource for their reporting, issued a statement on August 19th, 2010 (the date cited as being used by the San Jose Mercury) saying that they only estimated the sales for San Mateo County:
â€œSan Diego-based MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Because of late data availability, sales were estimated in Alameda and San Mateo counties.â€
But more to the point, industry experts predicted that home sales would drop after the expiration of the housing stimulus tax credit on May 1, 2010. Last yearâ€”the year used for comparing salesâ€”the tax credit was still available in July. One only has to go back to 2007 to see sales as low as they were this July, not 20 years.
In Santa Clara county they report: â€œ1,159 single-family resale homes that closed escrow represented a drop of 24.3 percent from the 1,531 sold a year earlier, making this the second-slowest July since 1990, according to figures released Thursday by the real estate information service MDA DataQuick.
I didnâ€™t bother to verify any of this information. But letâ€™s assume itâ€™s more accurate than what they reported about San Mateo County. Sales havenâ€™t been this low sinceâ€¦1990. Why does that date ring a bell? Itâ€™s the date of the last housing downturn. So what their report tells us is home sales drop when the housing market drops, and sales have not started to pick up yet, because they no doubt will someday.
But what the report does is continue to fan the flames of consumer skepticism. Unless and until the housing market recovers, the rest of the country will suffer. Responsible reporting might help us get back on track sooner rather than later. We expect the factsâ€”the newsâ€”good or bad. Just donâ€™t skew what you choose to report to further your own agenda.