What Came First, the Perception or the Reality?
July 27th, 2008 Categories: Market Trends
Perception? Reality? What is it that drives human behavior?
One of my favorite Denver Post columnists, Al Lewis, wrote today about perception. He believes that reality came first, perception is based on the reality we’re experiencing. I’m paraphrasing, of course, so you may want to read it yourself. Al makes some compelling points, and it’s been a looong time since I took college economics, psychology or sociology. But I do feel that things aren’t as black and white as all that.
Realtors are often blamed for being Pollyanna, only wanting to put a positive spin on things.
We’ve all been griping about the media coverage of the real estate market over the past year or so. It’s the unbalanced nature of the coverage that gets me. I don’t dispute the facts when they’re reported – number of housing starts, amount of resale properties currently on the market. Where the media is guilty of influencing what Al calls a simple free market is when the coverage isn’t balanced. When reporters specifically print story after story of fear inducing coverage without finding out the balancing side of things. Reporters don’t write their own headlines, and some of those headline writers need their hands slapped! I’ve seen doom and gloom headlines that have nothing to do with what’s in the article.
I must point out that Al Lewis has not been guilty of reporting only from the dark side, and he’s very willing to cover interesting stories using a variety of sources. There are others, though… When people say that the media uses bad news to sell papers – face it media – that’s the perception! Just like the perception is that Realtors don’t work our a–es off for our clients, just take a bundle of money for nothing.
Here’s what I know for a fact – that I haven’t seen much press coverage on:
- Real Estate is local, and the national statistics are pretty much irrelevant to local housing markets.
- There are local banks on solid footing with money to lend. Here’s another Post article from today.
- Rates are still at historic lows.
- Rental properties are staying rented, and vacancy rates are low (not speaking to large apartment complexes).
- The price range from $300,000 to $800,000 has been selling well lately in Denver.
- Not everyone is in foreclosure, and actually most people aren’t.
So black and white or not you should buy a house to live in, raise your family in, entertain in, keep as a rental. Don’t over leverage to go on vacation. Pay your mortgage on time. Have 6 months payments in the bank. It’s elemental. It’s today’s reality.
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