Are the headlines ahead?

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November 17, 2005

Are the headlines ahead?

Chris Palmeri

A headline on the front of today's Los Angeles Daily News caught my eye. "Housing sales finally slowing," it said. It almost sounded like relief. The information in the story wasn't necessarily discomforting for home owners. The paper said home sales in LA's San Fernando Valley had dropped 16% in October. Prices though were up 26% year over year to $600,000. One of the complaints I often hear is that the media creates trouble that isn't really there. Maybe the Daily News' headline was leading a little bit in the direction the paper's editors thought it should. I think the surge we've seen in real estate prices wasn't created by sensational headlines however. If anything the media was kind of late in reporting on the phenomenon of the housing boom. Home prices climbed more because of word-of-mouth, cocktail party chatter. Published reports of surging prices added fuel to that already lit fire. I'm not sure if dramatic headlines like today's Daily News will cause prices to fall. They may. Or maybe they will only reinforce what people are thinking--and the market is doing--anyway.