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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.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.