Real Estate TV Shows Can't Keep Up With The Plunging Market

Posted by: Chris Palmeri on August 27, 2009

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On vacation last week I watched a lot of real estate reality shows and realized just how quickly they can get outdated in this horrible housing market.

Some of the shows do reflect the post-bubble reality. A show on HGTV called Real Estate Intervention follows a guy who looks and acts like a tough-as-nails police detective as he convinces homeowners that they can’t sell their house at the high price they hoped.

The worst example was HGTV’s House Hunters International which told the tale of a couple selling their small condo in Carlsbad, Calif. for an expansive townhouse at a new beach development in Mexico. I kept watching, thinking the show would end in disaster. Pay $400,000 for a townhouse in an empty, half-built development in another country? And they had young kids! Yet, by the end of the show the couple was shown happily enjoying dinner with their new neighbors, even though, oddly, neither family spoke the others’ language.

Sure enough I Googled the development, Loreto Bay, and found out the developer has since defaulted on the property and there are many unhappy owners wondering what will ever become of their homes.

I’ve always thought the best of the real estate shows was Bravo’s Flipping Out. This season is definitely reflective of the bust. Star flipper Jeff Lewis says he sold his last two properties at a loss and he’s been forced to take humbling remodeling jobs to make ends meet. Even still the season opener seemed out of date on the day it aired. Lewis is forced to live in his last remaining house, which he is still trying to sell. He tells his Realtor “No more giveaways” and “I’m going to build a wheelchair ramp,” meaning he’ll live there forever, if need be.

When the Realtor suggests listing the house in the “mid to high 2s” –meaning $2 million—Lewis says high, not mid. But check out the property’s current listing. Lewis has already had to lower his asking price from $3.1 million in April 2008 to $2.29 million today. Considering that he paid $1.7 million for the house in 2007 and did a ton of remodeling, he’ll probably take a loss if he sells it now.

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Worse still was the overall sadness of what used to be a funny show. Jeff and his sidekick Jenni don’t spar in a good-natured way like past seasons. Instead, they just fight. Hard times will do that to people.

Reader Comments

Commie Stooge

August 27, 2009 8:29 PM

One of the primary culprits for the Real Estate Bubble surely is Cable TV.
Ever since we got Cable in our house in the early 80s (my section of Long Island NY was one of the last wired); I've watched as infomercials (Be a Credit Card Millionaire - by buying homes at no money down and renting them!) and plenty of others have pitched Real Estate as the way to get rich.
If I could, I'd get EVERY one of those shows off the air - period.
A house is a place to live; not a place to flip as an investment.

Ballbuster

August 28, 2009 4:59 AM

These misleading real-estate TV shows reflect the massive scam played upon the gullible. Their diversity range from selling Get-Rich-Quick Through Real Estate on cassette tapes to DVDs study guide, PC software and TV reality shows. However diverse, their common technique is to use misleading idea about real estate to appeal to the human greed. While Palmeri has identified several laughable real estate TV shows, he failed to see his own BW column joining that same rank. Indeed, some of Palmeri's nonsense at times is worse than any of the charade broadcasting the virtue of real estate ownership. Both Palmeri's articles and these real estate TV shows promote real estate ownership as the road to riches when in fact real estate only makes the land developer and banks wealthy. The retail buyer is stuck with a 30 year loan, maintenance cost, and property taxes. The sponsors of these TV shows as well as Palmeri's column have vested interest in selling real estate for profit rather than making the ordinary American consumer a millionaire. Any time someone like sleazy Palmeri or land developer wants to make you wealthy through real estate out of the goodness of their heart, watch out!

edy

August 28, 2009 11:56 AM

every home seller would be much happier if they face the facts of the current housing market & stop being in denial.

You aint getting the price you want for your property.

Squeezebox

August 28, 2009 1:17 PM

I see this as a good thing. I was getting sick and tired of people getting mortgage interest deductions on houses financed by interest-only loans. These people were basically living in expensive homes at taxpayer expense! Not anymore. The party's over!

Old Tom

August 29, 2009 12:23 PM

The world is not going to end before the boomers check out. We the boomers are still the richest generation even after the adjustment of 2007-2009. I am hedging against the Jimmy Carter style of double digit inflation 3 to 5 years down the road by locking in second home at today's price and interest rate with my excess income today. Surely there are enough like mind sucker-like-me around. All you hot-shot needs to do is identify today's need and fill it. Yesterday's bubble is history. There is always a bull market some where. This is America. Get going!

John

December 6, 2009 4:21 PM

Old Tom if u must reflect on the Jimmy Carter era (although due to your age as a boomer ,or downright stupidity as your generation was the one responsible for letting govt shove socialism down our throats and spawning gen x ers} During periods of great inflation a home is hardly a hedge due to the fact that people cannot afford larger mortgages when interest rates are high, simply put it generates more downward pressure on a slumping realestate market that is on govt life support via the 8000 dollar tax credit. Thanks for reminding me that the baby boomers are still the most foolish bunch of arrogant jack asses who think they know it all shouldve bought gold or commodity stocks as a proper hedge

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About

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.

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