We’re easier to blame than good old economic theory

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Lawrence Yun, the National Association of Realtors head Economist had some interesting comments that were highlighted by our friends over at Housing Doom. Yun in an article titled “The Wrong Correction” blames the bloggers and mainstream media for over-hyping the housing market collapse and subsequent consumer inaction due to “unfounded” concerns.

Consumers are hearing a lot in the media about the correction in housing, and theyâ€™re understandably concerned about whether now is a good time to get into the housing market. This hesitancy is evident in home sales volume: Even though interest rates fell to 6.2 percent in early 2007 from 6.8 percent in August 2006, and the economy added 3.5 million new jobs, existing-home sales were down 8.5 percent in 2006, with further softening expected in 2007. The irony, of course, is that although declines in sales volume have hurt real estate practitioners, they may be a plus for consumers.

To a great extent, we can thank steady media coverage of the real estate market â€œcorrectionâ€? for unfounded consumer concerns.

I love being blamed for actually causing the housing and mortgage market meltdown. It makes me feel important; although we know it is completely false and inaccurate. Is this guy for real? I would say that being afraid of paying tens-of-thousands of dollars more for a home than it ends up being worth is definitely NOT an “unfounded” concern. It seems like good, common sense to me.

The mainstream media, bloggers and anyone else not classified as a “shill” had nothing to do with the housing market meltdown. It has to do with simple economics. Things like supply and demand, inflation, speculation, unsustainable growth, take your pick from the buffet - those are the causes.

Twist from Housing Doom said it best in a yet-to-be-published podcast with me (coming soon) that if the housing bubble bloggers caused the crash it would have been triggered a year ago. The mainstream media is only focusing on the story because the number of cases of disenfranchisement, home-price slashing and mortgage company meltdowns are growing everyday. What was a low din is now a loud roar; and its not the media’s fault. I blame everyone that pumped it on the way up whether that be shills, mortgage loan officers, real estate agents, pundits, consumers, government, the federal reserve, whomever - it takes a lot to get things this out of whack; it definitely isn’t just because of a few journalists and bloggers.