Business Week Provides Faulty National Scope on What’s Really a Local Story

June 9, 2009 at 6:53 pm Leave a comment

The title of an article in the June 15th edition of Business Week, “Foreclosure Goes Upscale,” is typical of tactics used by many forms of media – it catches attention because it takes a negative spin on what is not necessarily a negative subject.

The article itself cites research conducted by the National Association of Realtors (NAR) reporting “there are enough $750,000-plus homes on the market (nationwide) to cover more than 40 months’ worth of demand at the current rate of sales.” The article further states, “That’s four times the rate of oversupply in the housing market as a whole.”

I find this statistic highly deceiving. The figure is totally the opposite of the current market in Metro Phoenix, where a majority of the cities have below the normal 4.5-month supply of homes. In Arizona, houses under the $250,000 price range are selling like hot cakes and multiple bids are common. We just entered a “sellers market” due to a surge on demand and low inventory.

To find an accurate measurement of the performance of the housing market, a report should look at statistics specific to a city or state, not the entire nation. Otherwise, the report is inaccurate to the point of being useless. The housing market in New York is not the same as it is in California, or in Arizona. And to provide one statistic that covers all 50 states demonstrates reckless disregard for the truth.

The lesson learned in this report and many past and future careless media reports is for the reader or viewer to remember NOT to believe everything that is reported. Reporters’ sources may NOT always be the best sources for accurate reporting on a given subject, including the real estate market.

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Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate, Real Estate Deals. Tags: , , , , .

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