As you know, NAR has been criticized in the news media for our “rosey” outlook for the real estate market. More often than not, they say we are too positive about the prospects for housing values in the future.
Well, Terry Forsberg, a REALTOR® from Scottsdale, Arizona, decided it was time to turn the tables. Terry gave his clients and agents a look at how accurate the news media has been about previous housing cycles. Below is the e-mail he forwarded to me, which shows how various media outlets have consistently predicted a long-term decline in home values since the 1940s. Yet, every time, the so-called decline was short-lived. Many thanks, Terry, and many other REALTORS® who are putting the current headlines in perspective. This is exactly what we need!
As his e-mail points out, homeownership has always been one of the best financial and personal investments a person can make. With pent-up demand growing, there is no reason to believe that’s going to change anytime soon.
Likewise, REALTORS® have always been the first and best source of real estate information. That’s not going to change anytime soon either. – Dick Gaylord, 2008 NAR President
From: “Terry ”
Sent: 02/29/2008 09:05 AM MST
The Media’s Attack on the Real Estate Industry
The Media’s attack on the real estate industry is nothing new. For decades they have practiced doom and gloom tactics and in some cases have actually caused real estate prices to decline short term. The good news however, is each and every short term decline has been temporary and has been followed by long term price appreciation.
Today we are in the middle of a window of opportunity to purchase attractive real estate at the best prices we may see in our lifetime and to receive “incentives” on our purchases on top of it! The incentives, which are being offered by builders and developers, will not last any longer than they need to. Once the market begins showing signs of a rebound, these incentives will dry up.
Sit back and enjoy some of these dire media projections from yesteryear and allow them to mirror the wide variety of “fear factor” type “media” comments that exist today.
“The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline.”
– Time Magazine, 1947
“Houses cost too much for the mass market. Today’s average price is around $8,000 – out of the reach for two-thirds of all buyers.”
– Science Digest, 1948
“The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs about $28,000.”
– Business Week, 1969
“You might well be suspicious of ‘common wisdom’ that tells you, ‘Don’t wait, buy now… continuing inflation will force home prices and rents higher and higher.'”
– NEA Journal, 1970
“The median price of a home today is approaching $50,000… Housing experts predict price rises in the future won’t be that great.”
– Nations Business, 1977
“The era of easy profits in real estate may be drawing to a close.”
– Money Magazine, 1981
“The golden-age of risk-free run-ups in home prices is gone.”
– Money Magazine, 1985
“Most economists agree…. [a home] will become little more than a roof and a tax deduction, certainly not the lucrative investment it was through much of the 1980’s.”
– Money Magazine, 1986
“Financial planners agree that houses will continue to be a poor investment.”
– Kiplinger’s Personal Financial Magazine, 1993
“A home is where the bad investment is.”
– San Francisco Examiner, 1996
“Home prices experience historic drop.”
– CNN Money.com, 2007
Each and every negative prediction by the Media was short-lived. At the time such predictions made it appeared real estate would never go up again in value – similar to the way it feels for many now. The good news is found in the few lines below. This time is no different than times past!
FACT: National real estate values have appreciated
• 88% since 1996
• 340% since 1977
• 685% since 1969
• 2650% since 1948