01/08/2009 05:12 am ET Updated Dec 06, 2017

Did Journalists Cause the Housing Bust?

In speaking with professionals in the residential real estate business, I find that many of them harbor hard feelings toward the business press. They feel that one of the precipitating forces of the housing bust was the drumbeat of the media asking in headlines:

"When Will the Housing Boom Turn Into a Bust?"

Some of my friends in the residential real estate world feel that the media treatment of this subject was a self-fulfilling prophecy. That the media, by asking this question over and over in the news (note the text - not if the boom turns into a bust, but when) created anxiety in home buyers which in turn caused them to stop buying -- the result being the beginnings of a bust.

Whereas I feel that the criticism of journalists is a bit harsh (the major reason for the housing bust was the large number of nutty mortgage loans being made), there is something to it.

The thing about housing is that it is a very subjective purchase. And when the media harps on a subject loud and long enough, people get spooked. And when spooked, people modify their behavior and in the case of the housing world, that means less or lower offers to buy.

Journalists don't care about the housing market - and nor should they. It is not their job to prop up the economy. But, where I think there is merit to the criticism is in the grey-area intersection between reporting the news and selling stories.

The media knows what grabs people's attention (and the more attention you have, the more advertising you can sell). If, by way of a simplistic example, the headlines were:

"A Review of the Housing Market and Its Future for Growth."

fewer people would have bought papers, clicked on the story, or stayed tuned for a newscast. And, just maybe, the eventual bust would have been a little more gradual than a step off the edge of a cliff.

I am not sure where the line is between responsible journalism and marketing news. But, at least as applies to the housing crisis, the media may have pushed the process a bit but it was not the cause - and nor will it be the solution.

Jim Randel is the author of the new book, The Skinny On: The Housing Crisis (Clover Leaf LLC) and the about-to-be release book, The Skinny On: Willpower (Clover Leaf Publishing LLC)

An Excerpt from The Skinny On: The Housing Crisis (Clover Leaf 2008)