We all need to stop, think and let our emotions subside. Real Estate articles and headlines continually press the housing bottom issue with catch phrases, buzz words and faulty property data from public records that stimulate irrational responses. But along with Real Estate being Emotional, it is Cyclical and Seasonal as well. As the public, it is our job to filter through the news that is being presented to us. But sometimes it gets tricky. Here are some tips on how to read between the lines of real estate.
Read the Entire Article: I know it sounds like common sense, but most readers fail to read an entire article and are only left with the impression of the headline and the first two paragraphs. Article headlines are deliberately written in a way to draw readers in, despite whether the headline makes any sense or not. Since most real estate articles are written like feature stories in a narrative manner, the real value of the story – or the nut graph – doesn’t appear until 3 or 4 paragraphs down. Usually, this is where the headline is either proven to be false, exaggerated or irrelevant.
Watch For Buzz Words: When words like “soar” “plunge” and “boom” are used, watch out. Look at the data being presented (if there is any) and determine if these words hold any merit. If home sales had an uptick of 1% month-over-month, in a seasonal cycle with an $8,000 tax credit incentive, is “soar” the word to be using? The same goes with economists “forecast” “predictions” and “projections”. If construction was projected to drop 17% and it only dropped 15%, we are not doing “better than expected.” All of these cases are subjective. Don’t get overwhelmed with emotional expressions and confusing jargon. If the validity of the writing is in question, then the validity of the data can be questioned as well.
Use More Than One Source: If an article is making claims without multiple accurate and sufficient sources of data to support it, counter the report with another of the same topic. Usually you will find two different spins on the same data reports everyday. Our recent article on the Real Estate Mania of the Case-Shiller Index touched on this situation. As the old saying goes, there are three sides to a story; one side and the opposing side, with the Truth lying somewhere nestled in the middle.
Do Your Own Research: What good is it to receive information if we don’t bother to determine our own interpretation? People share stories to get another viewpoint. If you spit out verbatim to a person sharing a story or experience, you haven’t added any value to their perspective. After viewing two opposing viewpoints, search the web for the direct source of data. See how they spin it, look closely at that data and ask yourself questions for clarity. If the clarity you’re looking for can’t be achieved, then something is wrong.
See What Others Think: Individuals are smart, it’s only People who suffer from lack of reasoning and understanding. With the surge of Social Media, it is easier than ever to see what other people think on a particular situation. Many times, a bogus article is flagged right in the comment section following it. Gather the opinions of your peers in the comments and scour the social media networks for recent conversations.
As we head into the fall and winter seasons of Real Estate, it is important to decipher the news being fed to us everyday. Even prominent news sources can’t be taken for face value. Stop, think and let the emotions subside.