How to Win the War against the Negative Real Estate Media (Part 2 of 2)

by Bernice Ross, Ph.D. MCC
Owner, Teleclass4U.com, LLC and RealEstateCoach.com

Copyright © 2007
RealEstateCoach.com and Teleclass4U.com
All rights reserved in all media.

Are we going to let the negativity in the media continue to create irrational fears in our clients? Or are we going to fight back and tell the truth about all the good things that are happening in today’s real estate market?

There are over one million Realtors® in the U.S. and approximately two million people who hold licenses. What can we do to counteract the flood of negative press? Here’s how we can put a stake in the heart of the negative media.

1.  Stage a frontal attack
Whenever you read or hear a piece of news that uses a percentage, remember there are two ways to view that percentage. Take these two examples:

Negative Media: Twenty five percent of the sub prime mortgages in the U.S. are not performing.

Positive Realtor Response: Sub prime mortgages represent 25 percent of all mortgages in the U.S. Of these, 75 percent are performing. This means that only 6.25 percent of the total loans are NOT performing (25 percent of total loans that are sub prime) X (25 percent not performing) = 6.25 percent.

Negative Media: Prices are down in 15 states
Positive Realtor Response: Prices are stable or increasing in 35 states

I find examples like these daily. Take the negative example and make it positive. To do this with percentages, simply subtract the negative percentage from 100 percent. Using the example above, if prices are down in 15 states, the percentage of states with a decrease is 30 percent. To find the percentage where property values are flat or unchanging, subtract 100 percent minus 30 percent. In the example above, prices are stable or are increasing in 70 percent of the states.

Once you calculate this number, share it in your blog, in your marketing materials, and talk about it at every possible opportunity. Not only will you help stem the tide of negative news. You will also attract more clients.

2. Go Long Term, Not Short Term
There’s no doubt that many areas are experiencing a slowing market. We have been doing business in a paradise of exceptionally low interest rates, easy lending, amazingly high demand, and a flood of money created by the strong economy and lower tax rates. These factors lead to unprecedented numbers of sales as well as extraordinary appreciation in some areas.

For example, my father died in 1998. His house in Los Angeles was worth $168,000.  According to the comparable sales data, it was worth $600,000 at the beginning of 2007. Based upon current sales data, it’s currently worth about $575,000. Thus, the value is down $25,000 from January 1, 2007. Here’s how the negative media would spin this vs. the more accurate long term assessment of the situation.

Negative Media: “Owners Face Massive Losses as Values Plunge by over 4 percent in just 10 months.”

Positive Realtor Response: “Property Values Soar 300 Percent over the Last Nine Years.”

With the exception of a few states that have experienced massive job loss in the manufacturing sector, most areas have seen a substantial increase in property values. All markets go up and down. The larger and quicker the run up, the more likely it is that there will be a downturn. Nevertheless, real estate continues to be a fabulous investment, especially when it comes to the difference between owning and renting. At the NAR Mid year meeting in 2007, Laurence Yung, the Chief Economist for NAR, shared the following data from the Federal Reserve: “The median wealth accumulation for renters from 1995 to 2004 was $4,000. The median wealth accumulation of a homeowner was $184,000.”

3. Record years are always followed by declines
One of the negative media’s favorite ways to tell us negative things about the real estate market is to quote how much sales are down from 2004, 2005, and 2006. We had the lowest interest rates in over 30 years, which in turn, triggered massive numbers of sales and price appreciation. For example, the $400,000 mortgage on my house in 1986 had payments of $4220 per month. That same $4220 buys a $670,000 mortgage at 6.5 percent. When I started in the business in 1978, interest rates were 9.75 percent for fixed rates. They climbed to 13 percent in late 1979. No one ever envisioned the low rates we have today.

The negative media hammer the fact that the volume of sales is down. In most markets, if you compare the volume of sales today with what it was five or ten years ago, the sales numbers look quite good. In fact, with the Federal Reserve cutting their rate to 4.5 percent, we can look for an improvement in sales, provided we get the word out to our clients.

Negative Media: Real Estate Sales Slip 20 Percent from 2006.

Positive Realtor Response: 2007 Real Estate Sales: Fourth Best Performance since 1997.

We can win the war against the negative media by sharing how much prices have increased over the last ten years and that the demand for FHA loans is up substantially. Let everyone you talk with know that places all over the country are reporting declines in listing inventories. In fact, some are still reporting multiple offers.

We need to ban together to get the positive news out there. Write letters to the editor, post the news on your blog, use it in your marketing materials, and talk about the good news to everyone you know. Realtors are a positive force for good in this country—let’s harness our energies to jointly respond to the attacks on our industry and to renew the hope and optimism of the homeowners in this country.