Who Is Responsible For Poor Home Sales?
We all know that the housing market is slowing in most parts of the country, but do we ask ourselves why? Why is it slowing when there are still low interest rates and a good economy? The chief executive of the national luxury home builder Toll Brothers blames the press. In a recent New York Times article, Robert I. Toll, chief executive, expressed his fears that the market will not get better until the newspapers stop saying how bad it is. “Perhaps as the presidential campaign hears up and moves to the front page, negative articles about housing will move off the front page,” he said. “Then, hopefully, the positive underpinnings of low interest rates, low unemployment and a decent economy will raise new-home-buyer confidence.” Well put Robert, Well put.
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Mark R | Nov 26, 2007 | Reply
I agree 100%
If these puppets on the string in the news media would stop stressing how bad the housing market is then the people who are looking to buy would not have this psychological effect that it’s bad let me wait until “THEY” say it’s good. In all actuality this is the best time to buy when interests rates are low.
Pat Curry | Nov 26, 2007 | Reply
I have a few questions for the people who blame the media for the housing downturn.
Did the media set the underwriting standards for loans that have gone into foreclosure? No, mortgage lenders did that.
Did the media securitize mortgages and sell them to overseas investors who wanted the higher return associated with riskier loans? No, the investment community did that.
Did the media give loans to individuals without verifying their income, assets, or employment? No, mortgage brokers and lenders did that.
Did the media increase the price of houses by $20,000 every fifth buyer? No, a builder in Las Vegas did that.
Did the media sell multiple houses to investors in the same neighborhoods? No, builders did that.
Did the media offer home buyers interest-only, negative amortization mortgages? No, mortgage lenders did that.
Did the media commit identity theft and mortgage fraud? No, criminals did that.
Did the media ignore the standard criteria for establishing needs for new housing stock and build twice as many houses as job and family creation would dictate? According to a top housing economist, builders did that.
Is the media making up the stories they are running? No, or there would be massive lists of corrections every day.
Come on, folks. We all knew the market had to turn. It was a question of when, not if. The correction has been massive because the run-up was massive, lasting years longer than anyone thought it would, because of the factors listed above. The media didn’t cause the housing boom and it isn’t responsible for the downturn.