If you are involved with real estate, own property, or are an investor, you already know how difficult it can be to get reliable information about future trends. It seems that our real estate ‘experts’ are wrong at least half the time (for more information on ‘Experts’, see my previous article on the subject). These individuals are supposed to be professionals who have attended specialized schools and have extensive training and experience in real estate. So, how could they have completely missed the US housing crash in 2007? How can they continue telling us that the economy is steadily improving when people are out of work, inflation is out of control, and health insurance costs have skyrocketed?
Don’t be too hard on the real estate analysts—it’s not all their fault. I’m sure they do a fine job of analyzing real estate trends and communicating their findings to the best of their ability. However, information is only useful when it is effectively communicated, and that, as they say, is the rub. Real estate experts rely on mass media to share their insights, but unfortunately, at least in the US, the mass media is 90% controlled by fewer than a dozen wealthy individuals with their own agendas. In other countries, the media is controlled by their respective governments, which is just as problematic. The exception is the internet, which is why these few powerful individuals with significant lobbying influence keep pressuring the US government to regulate it, citing concerns like copyright piracy (a minor problem and not even US-based), net neutrality, and broadband usage, all to gain control over the internet as well.
These individuals don’t just control newspapers and magazines—they also control broadcasting companies, radio stations, recording studios and companies, and even movie production companies like Paramount, MGM, and Disney. They have incredible power over who gets elected to public office and can exert tremendous influence over politicians, who rely on the media to remain in power. Mass media is a self-feeding monster.
In the US, we are supposed to have “freedom of the press,” but few people truly understand what that means. Most Americans believe the First Amendment to the Constitution means anyone can print, record, write, or say anything they want (as long as they honestly believe it to be true), and they are partially correct. No one will stop you from writing anything, no matter how offensive or negative it may be. But how do you get it in front of the public? Freedom of speech is a double-edged sword. It means no one can be forced to print, distribute, or broadcast anything they don’t want to. It also means no publishing entity can be required to report both sides of an issue, or to do so fairly, completely, or accurately. They are free to push their agendas through selective publishing. People complain bitterly about the “liberal media,” but who owns these outlets? They are 90% owned by fewer than a dozen wealthy, powerful individuals—mostly wealthy, powerful, and, often, very liberal. And how did they become so rich and powerful? By owning and controlling property—real estate. Naturally, they have a vested interest in how real estate issues are reported. Negative reports can actually harm the market, exacerbating the situation.
Since the US currently has a liberal Democrat as its Head of State, elected with significant media support, the media does everything they can to support his administration and present it in the best light. Any conservative viewpoint is reported in the most negative way, while liberal viewpoints are presented as positively as possible.
Real Estate Trends and Media Influence
Real estate trends are a major focus because the media outlet owners have a vested interest, and politicians can only be elected through the goodwill of the media. When they want to obscure something, they simply change the vocabulary. Since 2007, terms like “crash,” “depression,” “recession,” and “drop” have disappeared from the journalistic vocabulary. Instead, we now hear terms like “adjustments,” “negative growth,” “slight improvements,” or “steady” when there’s no growth.
Now, you can understand why negative predictions often don’t make it into the media—at least, not until it’s too late. And when they do make it, they’re usually so full of twisted words (I call them “weasel words” because, like their namesake, they are stealthy, sneaky, and insidious) that the message is completely lost.
There are a few things you can do to get a clearer picture of what’s really happening in real estate. As long as the internet remains free (right now, it’s like the Wild West—anything goes, and I love it), you can visit several privately owned websites to get different viewpoints and predictions, then average them out. Another tactic is to pay attention to what articles emphasize and try to figure out what they’re not saying. Often, what is left unsaid is more enlightening than what is reported. You can also visit trusted sources to get raw data and make your own predictions. As I mentioned in my previous article on ‘experts,’ statistics show that your predictions are often just as accurate, or even better, than those of so-called ‘experts.’
Other than that, your best bet for accurate information is to consult a real estate investment counselor. They have a vested interest in making sure you succeed and make money. If you don’t make money, neither do they. And because they deal with these issues daily, they’re in a much better position to predict what the real estate market may or may not do.
Near the turn of the 20th century, President McKinley wanted to involve the US in hostilities against Spain, largely due to their treatment of Cuba and the US’s desire to control the small island nation, which is only 90-some miles from the Florida coast. However, he was concerned that neither Congress nor the American people would support a war at that time. He approached publisher William Randolph Hearst (one of the few who controlled the media at that time) for advice on how to sell the war. Hearst is rumored to have replied, “Mr. President, you give me two weeks, and I’ll give you a war.”
Remember, information is only as good as the media that distributes it. Gather all the information you can, trust nothing, and verify everything, no matter the source.
