Envy, nuanced reporting and pajama journalism.
Ever wonder why every celebrity—every industry—seems to have a love/hate relationship with the media?
Whether you're a flashy twenty-something in the fast lane to fame, or an industry populated by paunchy fifty-year-olds just trying to make their car payments, the media is happy to give you a quick boost on your way up. You're new news, grist for the 24/7 media mill. But once you're up, watch your back. Because now you're old news, and the media can't use old news. No sir. Don't need it, don't want it. The media needs new news. And once you're up, the only way you can be new news is when you're on your way down. And the media will give you a quick shove in that direction too.
These cheery thoughts were sparked by an April 10 article by Marc Davison for Inman News. Davison, who sells software to the real estate industry and is therefore something of an industry outsider insider, reports that "while delivering a recent speech to the Women's Council of Realtors, I predicted that within five years real estate will no longer spend a dime on print media advertising. That prediction received a standing ovation."
Why the rousing response? I can instantly think of 515 reasons, which is how much it cost me in US dollars last month to run a quarter-page color ad for a listing in a local newspaper whose circulation will never rival that of The New York Times or even Philatelist's Monthly. That's almost 10 percent of what I'll net from the heroically successful sale of that condo after commission splits and taxes. And whatever benefit I get from that ad will be hard to measure. It didn't sell the listing; the Internet and another agent in my office did. It didn't make my phone ring, but then no newspaper ad ever has and, besides, most of my business comes from referrals. Maybe the ad will help me get another listing down the road, but that's a definite maybe and even then my new client may not know why I look so familiar. Meanwhile, I'm definitely $515 poorer.
But as Davison points out, the real estate industry's resentment goes far deeper than that.
On the surface, the print media is fairly respectful of the real estate industry. Sure, I'll occasionally see some variation on "Ten Things Your Real Estate Agent Won't Tell You" in a newspaper or magazine. But the print media leaves most of the conspiracy theory stuff to the Internet—including the print media's own Web sites. And sure, the consumer finance magazine I faithfully subscribed to for years suddenly decided to make amends for getting caught in bed with Wall Street during the dot-com boom by taking a dull and rusty hatchet to the industry currently in the spotlight, real estate. But this kind of nakedly transparent opportunism is rare in the print media. Or at least it's usually not that naked. Looks like we can depend on the Old Boy network that owns the print media to stick to the Old Boy code of conduct.
What isn't so rare is the ham-fisted, naive and supercilious reporting that characterized the print media's coverage of the real estate boom, particularly during the early years. Reporters who had never covered real estate, an industry far more nuanced than most reporters (and readers) realize, I say reporters who, given their salaries, had themselves probably never even gone through the home-buying process, were noisily pontificating on the state of real estate.
Not that vacuous reporting is entirely the reporter's fault. Reporters are only the foot soldiers, sent by their editors to wherever fighting breaks out. No general assignment reporter can possibly cover a different topic every day expertly and insightfully. And I don't expect the print media to put a disclaimer to this effect on every article they run. No, the problem is systemic: reporters spread too thin and under deadline, and working with the same limitations we'd all have if we were thrown sink-or-swim into the complicated and compartmentalized world of real life. When it occurs to me that I came within one filled class of majoring in journalism, I realize that this could be me I'm talking about. The wonder is that this improbable system has sold as much product as it has, and has what credibility it still has.
As I pondered this it occurred to me that I'd found a great topic for a Web site article. "But", I realized, "I'll need fresh examples of misleading real estate reporting, and from what I've read lately, real estate reporting is a whole lot better than it used to be. Jeez, what if the media finally figured it out, and from now on all its coverage will be nuanced and balanced? I'll be up a creek." Fortunately (and predictably) I didn't have to worry. Two usable examples came forth immediately.
First was "Market Chill Settles Over San Francisco Bay Area" by an local independent real estate writer. The article appeared online but I'll file it under print media because it's syndicated and because the writer once wrote for a major local newspaper. "Market Chill" is one of the better examples of professional real estate reporting; it's not "citizen journalism". But the first problem it has is the headline: there is no such thing as a San Francisco Bay Area real estate market, at least not qualitatively.
Sure, it's convenient to lump together the real estate statistics of nine contiguous California counties whose common denominator is a large geographical landmark called the San Francisco Bay and step back and call it a market. It's a great way to manage data quickly and efficiently and present it to the largest number of paying consumers sharing a common and marketable interest. Do you write a nuanced real estate article for the Contra Costa market that's read by ten people, or do you write a black-and-white serves-'em-right morality play on the "Bay Area market" that's eagerly read by ten thousand or a hundred thousand?
But simplification and generalization aren't the best way to describe a nuanced (there's that word again) regional market with hundreds if not thousands of micro-markets. Moving at random from east to west across the breadth of the Bay Area, Antioch isn't Walnut Creek isn't East Oakland isn't Palo Alto isn't La Honda. In fact, Palo Alto isn't Sunnyvale, fifteen minutes to the south, or Redwood City, fifteen minutes to the north, or Fremont, fifteen minutes to the east, or Skyline, fifteen minutes to the west. Different agents, different buyers and sellers (even when price ranges overlap), different expectations and attitudes, different comfort levels, different market movers and different ways of doing business. Micro-markets, in other words. Ethnicity, education and income often play a role in these differences, since unfortunately they're still so often linked, but they are by no means the only determinants. The college-educated White Anglo-Saxon Protestant mid-level programmer who pays $1M for a home in Palo Alto is rarely the college-educated White Anglo-Saxon Protestant mid-level programmer who pays $1M for a home in Sunnyvale or Redwood City or Fremont or La Honda. Any home-buyer looking in all five of these areas simultaneously is either a remarkably blank slate or a long way from buying a home.
While the "Bay Area real estate market" misconception is common among reporters, misconception is never a good basis for good reporting. Let's read further in the article. According to the lead-in, "The nine-county San Francisco Bay Area housing market is taking it on the chin." "(S)ales...plummeted to the lowest level in 11 years." Contra Costa County, with home prices down 5.5 percent and sales down 18.7 percent year-over-year, is held up to us as the poster child for "the after effects of unsustainable appreciation during the boom years...with sellers (now) refusing to lower prices and buyers stubbornly tightening the purse strings". The first clue that Bay Area real estate might still have a pulse is way down in paragraph sixteen. Paragraph seventeen even concedes that "Silicon Valley is a mixed market". But to get to paragraph sixteen you have to wade through fifteen paragraphs of unrelenting real-estate-is-kaput, and how many readers read more than the headline and maybe the first paragraph or two?
What struck me about "Market Chill" is that only a few days before I'd happened to see a KGO-TV report on the Contra Costa real estate market that had been careful to point out that the county "is a land of real estate microclimates, and what's happening in the Walnut Creek corridor is drastically different from the housing market to the east in places like Antioch". According to this KGO report, real estate in the western half of the county has cooled but is still solid. Some cities even have a shortage of inventory that occasionally leads to good old multiple offers. "Market Chill" itself quotes an agent in Concord, next door to Walnut Creek, as saying that "prices are not crashing, they're leveling out".
It's the eastern part of Contra Costa County that's hard hit, with prices dropping about 14 percent according to the KGO report. That's the eastern part of Contra Costa County, the part that's more Central Valley than Bay Area. The part where over-extended home builders slash prices so deeply that they compete with sellers of older homes. The part that has a glut of new homes for sale because land is cheap. The part where land is cheap because it's a long way from what attracts buyers to the Bay Area. That part of Contra Costa County. Wouldn't that be good information for someone buying or selling in Contra Costa County, or for someone trying to extrapolate this grim but anomalous market to his own Bay Area neighborhood?
Weekly market reports from the offices of Coldwell Banker's Northern California Region also paint a picture more nuanced (there's that word again) than the one presented by "Market Chill". Many offices see the pace picking up, and some parts of the San Francisco Peninsula, including my own, are red hot. Many offices complain of lack of inventory, which could be one reason "sales...plummeted": if you don't have many homes to sell, you don't sell many homes.
Well, enough of that. Weeks pass, as they often do, and one day I see this headline in the San Francisco Chronicle: "Realtors Predict Prices Will Fall". "The housing bubble has truly burst...California's struggling housing market weakens as lenders tighten underwriting standards...statewide drop of 6 percent...mounting foreclosures...". For any would-be Palo Alto buyer the icing on the cake is the accompanying photograph of a "price reduced" sign and the caption: "This Palo Alto home is being offered at a reduced price, one indication of stagnating prices". (By the way, the reason you go to journalism school is so that you can throw a gratuitous "being" into your finely-wrought sentences.)
So if you're a reader considering buying in Palo Alto you'd naturally think, "Now that the market has cooled off, now would be a good time for me to get that good deal in Palo Alto."
But if you're thinking that, you're not catching the nuances of the photo and the caption. That house with the "price reduced" sign? It has the formal pre-war architecture of Palo Alto's top-end neighborhoods. Prices in those neighborhoods have indeed flattened since early 2005. Now here's where we get into semantics. If you're a seller or an agent or some other real estate market well-wisher, you say that "home prices are holding". If you're a bubblehead or a bargain-hunter or a Chronicle caption writer, you say that home prices have "stagnated". But someone thinking of buying in Palo Alto isn't into semantics. Someone thinking of buying in Palo Alto just wants to know what the heck the Palo Alto real estate market is up to.
The Chron's article doesn't tell the reader who might be considering buying in Palo Alto the startling news that entry-level Palo Alto neighborhoods are more competitive now than they were even in the boom market of early 2005. The reader would indeed know that sales in entry-level Palo Alto are down, but not that entry-level inventory is down even more. The reader would have no way of knowing that entry-level Palo Alto homes are selling with multiple offers for an average 9 percent over list, and at an average sales price 13 percent higher than Q1 2005. But wouldn't that be good information for the reader considering buying in entry-level Palo Alto?
And the reader who might be considering buying in Palo Alto couldn't tell from the Chron's article that "price reduced" signs aren't exactly mushrooming all over Palo Alto. Of the ninety-five active or pending listings of single-family homes in Palo Alto as of April 14, 2007, only eleven have had price reductions.
Here we have two real estate articles that get the facts right and still manage to mislead. And by misleading, make life more difficult for the buyers and sellers the media supposedly informs and for the agents who work with them. "I know real estate is in the tank! I see it every time I read the newspaper! So why are you telling me this house I like will sell with multiple offers for way over list?" Or "we'd like to sell but we hear the market's terrible". Or "I'd like to sell and retire to a cheaper area but now it looks like I can't". Or even "since the value of my house has dropped so much, should my other investments be more aggressive?"
How can this happen?
Meet pajama journalism.
Pajama journalism is journalism that can be written in your pajamas. Pajama journalism is journalism that can be written without leaving your computer or spare bedroom. Pajama journalism is journalism by press release. "Market Chill" is based largely on a monthly press release from DataQuick, a real estate data aggregator. Of the four quotes in the article, one is from the press release. The others are from market condition reports written by real estate agents and posted online on the same Web site that posted "Market Chill".
Not only could you write this article without leaving your spare bedroom. You could write this article without talking to anyone except your cat.
The sources for the Chronicle article are a little less transparent. They seem to come from press releases put out by DataQuick, the National Association of Realtors and the California Association of Realtors. Economy.com, also quoted in the article, lets only subscribers see its market updates, so I can't tell if the quotes attributed to its economist Mark Zandi are canned or live. Two or three of the other quotes in the article may come from telephone interviews. The only clue that Bay Area real estate might actually have a breath of life comes from a surprising source, the anti-Will Rogers of real estate economics, economist Kenneth "I Never Met A Real Estate Market I Liked" Rosen of the Fisher Center for Real Estate at UC Berkeley, who's quoted as saying that "home prices could appreciate 1 to 3 percent in the Bay Area this year".
Ken, take that lampshade off your head!
Of course, there's nothing inherently wrong with, or dishonest about, pajama journalism. I may or may not be in my pajamas right now. No one is lying in either of the articles I've quoted. Both articles are actually some of the better examples of real estate reporting.
But when I get dressed I'll go out into the real world using real, not digital, transportation and I'll use real roads, not the Information Superhighway. I'll talk to real buyers and sellers, make and get real offers, interact in real time with other agents, and in general make like a real estate insider. I'm not asking for a medal for this. It's not hard to be a real estate insider. All you have to do is find a real estate broker to hang your license with and some real live real estate clients to work with.
But when a buyer or friend or family member or neighbor or stranger in an elevator asks the inevitable question, "How's the market?", and I answer honestly that most of the market in my area is as hot as it's been in years, that buyer, friend, family member, neighbor or stranger in the elevator will be disinclined to believe me. Because their question was really a leading question, a test—they're "well-informed", they already "know" the answer—and by answering honestly I've failed. "Jeez, these agents always lie. Don't they know that's why nobody trusts them? Don't they think people can read? Don't they ever stop spinning? It's pathetic." The real estate writers, on the other hand, have no discernible agenda. Their word is gold.
This could be where some of that resentment the real estate industry feels toward print media, the resentment Marc Davison picked up on, comes from.
But is the print media's real estate coverage really without an agenda? Davison's wife owns "a small real estate writer's syndication firm" and at his prompting used her contacts to poll twenty-five newspaper editors on their attitude toward, and coverage of, the real estate industry. Does the media have a vendetta against the real estate industry? The editors' responses are interesting and, I think, unintentionally revealing.
Some of their responses can be summarized as Real estate agents are wonderful people. That's my story and I'm sticking to it. Now go away. Okay. Fair enough.
Here's a more expansive and telling response: "News is about what's new. Traditional anything isn't new. It's therefore going to be judged as what it is: old." And they say that newspaper reporting is superficial. Note the interesting choice of words here. Anything traditional (i.e., not new) will be judged. Judged, not presented to the reader for he or she to judge, but judged by the media, as in judge, jury and executioner. Also note that anything traditional will be judged not, say, as time proven, but as old (i.e., obsolete and in the way). And there's very little we Americans dislike more than old or obsolete. Okay. Now we're getting somewhere. Now we've peeled back a few layers of meaning.
"Realtors have it coming. They've been stroked forever, but these days their value is limited despite their belief. Everything they do is for their own benefit. Listen, the discounts (sic) offer something new, different. Realtors don't and that's the story. Period." Now there's an inspirational lack of bias. I wonder how this guy's bubble blog is going. And again note the media obsession with "new", not for any intrinsic goodness it has, but for its novelty value. Also note that this editor shows his familiarity with the real estate industry by calling discounters "discounts". A real real estate hepcat. A little thing, but telling.
Several editors made comments such as "real estate people own the real estate section" and "the demands they make of our paper are worthy of its own story". Let's use the example of that local newspaper I mentioned, the one that won't ever be confused with The New York Times. It comes to me in two sections of equal size. The first is local news with a scattering of non-real estate ads. The second is the real estate section, which is about 95% real estate ads. Without real estate advertising, not only would the second section of that newspaper go away. So would most of the first. In fact, my local newspaper would go back to where it was thirty years ago: one housewife and a mimeograph machine. So when brokerages and individual agents contribute that much to a medium's salaries and profits, they expect consideration. I'll bet you would too. Does that stifle any serious real estate reporting? I suppose it could, if the print media was capable of serious real estate reporting. Unfortunately, the average reporter looking to "blow the lid off real estate" isn't equipped for that kind of heavy lifting, so instead he dips deep into the bag of urban legend they keep over in a corner of the copy room. In so doing he succeeds only in riling up the real estate community without educating his readers. So perhaps it's best that the status remain quo. Is the real estate industry unique in having this kind of leverage? Remember that consumer finance magazine I mentioned, the one that tried to salvage its credibility by unloading on real estate? Before that it went after Wall Street with the true zeal of the crusading consumer advocate...until someone in management remembered that most of its advertising comes from Wall Street and none of it comes from real estate.
"There is this really weird defensiveness that Realtors have when it comes to objective reporting of any kind. They have trouble accepting challenging points of view. I have no idea where this comes from or why they are like that. We are just a newspaper covering a story." Unfortunately, this statement is partly true. I saw it first-hand when a former head of our region conceived an extreme dislike for a Chronicle reporter who was, as far as I could tell, presenting the news objectively. It's the job of the highly-placed real estate executive to be a cheer-leader for his industry (I guess). It's not the job of the reporter. On the other hand, an agent working pressure-packed sixty-hour weeks might get a little testy when some wet-behind-the-ears reporter tells the public that full-service agents have just been disintermediated by one of Zillow's laughably inaccurate Zestimates or superseded by some slapdash discounter. And real estate isn't the only industry to "have trouble accepting challenging points of view". In fact, plenty of industries, groups and public figures, all the way from oh, let's see, the current Administration down to the lowliest organization's board of directors, have that trouble. Ain't nuthin' new here: this kind of defensiveness goes all the way back to "Am I my brother's keeper?" Any editor who doesn't know "why they are like that" doesn't know much about human nature and organizational behavior. Any editor who has "no idea where this comes from" doesn't read his own newspaper. And it's ingenuous to say that "We are just a newspaper covering a story". Apparently it hasn't occurred to this editor that businesses will pay to get their name and business model in the advertising section of his newspaper, and that breaking out beyond the confines of the advertising section and into the editorial section is a real coup for any business because it implies the endorsement of the newspaper. And at this point you might not be surprised to learn that sometimes that endorsement is more than implied.
But here's the capper. "Reporters are not biased in the least. They are just people. They make $50,000 a year. They report on this industry and see people with far less credentials earn three to four times what they do. Perhaps some let that affect their perspective. Not at this newspaper however." Obviously not. So what gaudy credentials do you need to write for a newspaper? A B.A. in Journalism? And when was that ever supposed to be a license to print money?
These responses suggest that the typical member of the media might have a few things to learn about being interviewed. You wonder how well these editors would hold up themselves under their own rubber hoses and hot lights; about as well as the typical real estate agent, apparently. A few more minutes and one of these editors would've confessed to the Lindbergh kidnapping.
Lest anyone think that print journalists are the only journalists feeling abused by real estate, I'll mention the local TV reporter who ended an in-studio report on the softening real estate market by bursting out, "Now we ordinary people have a chance too!" I don't know what shocked me more: that no one had told her to keep up the pretense of objectivity, or that a TV reporter would think of herself as just another working stiff pulling a shift down at the mill. Even the news anchors were momentarily speechless.
What's ironic about this silent, deadly and essentially meaningless war between journalism and the real estate industry is that both sides face the same concern: "disintermediation" by the Internet. That the real estate industry has prospered in the face of this challenge while mainstream journalism rapidly withers away may be one source of the "who, me?" envy we've just seen. It may also indicate which industry is more relevant.
So are there any bad guys here? No, not at all, but there aren't many heroes either. We seem to have a media whose economic realities make it prone to generalizing even when it's not consciously or unconsciously trivializing or distorting. The essential partner in this dance is the consumer who keeps coming back for more. Perhaps all we can safely say is that "information", however packaged, is the product of imperfect systems and people, and consumed and interpreted by imperfect people—imperfectly. A number of industries might fit this description—no names, please. And while this seems to present a compelling case for the "citizen journalist" close to the story he or she covers, the consumer of citizen journalism pays a very high price for this closeness because it's illusory. Every real estate citizen journalist I've read on the Internet isn't close to his subject, he's just obsessed by it.
But come to think of it, there is one hero here: the TV reporter, working from the same press release that spawned "Market Chill", who got in her car, went to the scene, talked to a buyer, talked to two industry sources (neither of whom spun or kidded her, so there's two more heroes), talked to an academic for a neutral opinion, and wrote and delivered a nuanced (there's that word again) and balanced report under deadline.
She works for the same local TV news I watch every night. Up 'til now I'd always felt like I was slumming when I turned on the 6:00 News, because everyone knows it's the print media that tackles the hard news. Woodward and Bernstein and all that stuff. Everyone knows TV news is just a High Def candy store for people with short attention spans.
That's an idea I'll have to rethink.