AM New York had a cover story on December 17th about how New York homes sales were sinking 20%, and possibly even more. These kinds of stories inevitably make my life more difficult, since I work in real estate and have to rebuff clients who see these pieces as being wholly accurate, which they aren't. Sensational pieces like that cause consumers to have unrealistic expectations when they look for a new home, which in the long run will only hurt our economy.
The piece was flawed for a number of reasons, beginning with the data the journalist used to base his story. His numbers came from the Federal Reserve Beige Book, which is a collection of anecdotal economic conditions from districts around the country. It is not a commentary on the views of Federal Reserve officials and was not originally intended for public consumption.
The frustration didn't stop with AM New York. On December 30th The New York Times ran a piece about how couples going through a divorce were having a hard time selling their homes, because many were worth less than the mortgages on them. The piece led with a couple from Atlanta, not New York City. The piece is misleading to a New York reader, especially since the Atlanta area is in the top 10 of foreclosure rates nationwide, sometimes in the top five, depending on what data you use. And guess what? New York City is not. Due to a number of factors, namely the stringent co-op system that frightens so many first-time buyers, Manhattan has not been hit the way the rest of the country has.
Both these pieces got me thinking about the role of media in this economy, and how more than ever accuracy and knowledge of one's subject matter is important, even as media budgets shrink. This time last year there was concern that we would talk our way into a recession. The way the markets naturally imploded on their own we didn't have to talk our way into anything. The economy slumped, but the good news is that the only place to go is up.
The media will play a large role in that recovery, which is why it's all the more important that what they report, especially when it comes to the housing market, has to be accurate and relevant. Now is not the time to find random numbers in obscure sources such as the Federal Reserve Board's Beige Book and pass them off as gospel. It's important to find sources to comment on both sides of the story, not just the point the journalist is trying to make on deadline. I realize this is what a student of journalism learns on the first day of any reporting class, but it seems this very basic tenet has been lost in the shuffle.
The problem is rooted in the newspaper and media industry at large. It's well documented that the newspaper business has been headed south, in large part because of their own inability to adapt to and embrace the Internet. While newspapers need big headlines to sell copies and get web traffic, sensationalism is not the way go. Quality reporting is the way to go. But as profits fall, layoffs and buy outs are imminent, and suddenly the media finds itself short of the manpower to do the kind of work that would not only keep it afloat, but that its public needs.
The culture of journalism today is also partly to blame. True, AM New York is a tabloid, and a free one at that, so the quality of its writers may not be what a larger daily has on tap. But daily journalism doesn't differ all that much, newsroom to newsroom. Writers are often handed a press release or whatever it is, and they have to churn out a piece under a very tight deadline, especially now with 24-hour news cycles. There's an old newsroom saying, Go with what ya got, which is very much true in this Internet age. Also, many business reporters have no formal training in business or finance, a key skill set in this climate. I've personally known many business reporters who took a job simply because it paid. AM New York, incidentally, does not pay well. None of the free rags do. Consider that before you take their hackneyed real estate advice.
In an economy like this, perhaps the overworked staff writers may not be the best choice when it comes to explaining complicated matters of finance. There is, however, a sea of unemployed finance professionals who have both the background and the inclination to share their knowledge. There is tremendous opportunity for that sector right now. Media outlets are hungry for people who can explain this stuff in plain English. I teach non-fiction writing to adults in Manhattan and I've had many people who work in finance take my class because their expertise has been requested, and they need to bone up on their writing skills.
The bottom line is that there will always be people who will buy real estate. They should not be discouraged in any way. Buyers may be fewer than in years past, mostly because mortgages aren't being handed out like Cracker Jack prizes. These buyers are going to be naturally cautious, but they shouldn't be misled by irresponsible reporting by journalists.