The Wall Street Journal reported in yesterday’s edition (11.15.2006) that although real estate inventory in Baltimore increased by 2.1% last month, inventory in Washington DC actually decreased by 3.4%. If there is any statistic that predicts coming stabilization in the Baltimore market, its this one. Many of our new buyers have been coming from Washington, drawn by lower prices and relative ease of commute. If inventory there is starting to shrink, prices will hold, and once again buyers will look to Baltimore as the affordable alternative.
Coming as this does at a time when mortgage rates are holding or lowering slightly, this only makes the possibilities of a turnaround by springtime more likely.
Will the media report this in a positive way, or will they ignore it and go on predicting gloom and doom? Well, the Baltimore SUN has given no play to these stats at all in today’s edition.
I can think of only a couple of reasons why this might be overlooked. One would be that negative, ‘the sky is falling’ stories sell newspapers.
A second reason is a little more cynical, and more plausible. David Lereah, chief economist of the National Association of Realtors, has postulated that the real estate boom of the last few years robbed Wall Street of the investment cash they were looking for to resume the Bull Market of the ’90s. As real estate prices escalated over a period of years, people thought it was a safer bet to buy, renovate and re-sell real estate and so stock prices languished.
Now, as the media has been hyping the bad news stories about real estate, look at what has happened to the Dow. Despite the general feeling that the economy is sluggish, uneven, and not doing as well as the statistics suggest, the markets have been hitting new record after new record. And media companies are, for the most part, public stock companies who have benefitted from the run up in stock prices.
Could it be possible that the media is actively trying to keep the real estate market slow so that their shareholders benefit?