Tired of hearing about gloom and doom in the real estate market
By Dan Gainor

The news media have been living in a bubble since before 9/11. Despite facts that indicate the real estate market is cooling as many experts had expected, some journalists insist there is a crisis.

NBC "Nightly News" did a May 25 report about "housing on the bubble" that warned about the danger of rising interest rates to people with adjustable-rate mortgages. But the graphics told the real story. Little bubbles bounced across the screen filled with dollar signs as reporter Ron Mott told of people in danger of losing the roofs over their heads.

The report highlighted a woman unhappy about her higher mortgage payment from $1,300 to $2,000-- for a $129,000 house. A normal loan for the entire amount would be a little bit more than $800, but no one at NBC did the math.

Meanwhile, industry reports from Aug. 1 that pending home sales, what the group calls "a leading indicator for the housing sector," have risen the past two months. While that is lower than 2005, last year's sales were an alltime high. And still, prices are up from last year. The national median existing-home price was $231,000 in June, up $2,000 from last year.

ABC took a more upbeat tactic with the July 30 "Good Morning America" declaring the current market as "good news for buyers." Anchor Kate Snow then followed with a mistake as big as a house about the mortgage rate.

"We heard Betsy Stark mention in the piece that the 30-year rate I guess is at its highest ever, so what does that mean?" Snow asked realtor Allyson Bernard, who was savvy enough to correct the error. The current rate stands at about 6.7 percent. "My first home, I had a 21-percent mortgage rate. So these rates are nothing," said Bernard.

Snow tried to laugh off the mistake: "Yeah, I shouldn't have said 'ever,' but its highest rate in several years. I exaggerate a little bit," she said, chuckling.

Too bad all of the network guests weren't like Bernard.

Look at Dean Baker from the Center for Economic & Policy Research. Back in August 2005, he went on "CBS Evening News" and warned, "We are seeing a bubble." He didn't stop there. "It's very, very risky. You know, this is just like buying into the Nasdaq in, you know, late '99."

This wasn't anything new for CEPR. In March, Baker warned, "Like the stock bubble, the housing bubble will burst. Eventually, it must. When it does, the economy will be thrown into a severe recession, and tens of millions of homeowners, who never imagined that house prices could fall, will likely face serious hardships."

While Baker might be disappointed because we haven't had an economic meltdown, why don't the media ask him some tough questions? He's been called a market pessimist or bear, but he's been singing the same song since the initial bubble predictions of 2002.

The media have been warning of a housing cataclysm for nearly five years. Maybe it's time for a "bubble wrap."

Gainor is a career journalist and Boone Pickens Free Market Fellow. He is director of the Media Research Center's Business and Media Insti- tute www.businessandmedia.org.