Realtor: Nothing Sells Like Bad News
I read with disdain the front-page story “Housing Sales Rise, but Prices Keep Dropping” (May 5). One of the biggest problems the real estate industry faces is that there is a dearth of good data. Both DataQuick and the California Assn. of Realtors quote home sale price trends; however, their data only reflect the sale prices of homes that sold in a particular month. Therefore, in a recessionary period when people are buying less expensive homes, the data indicate that home prices are down. Only one organization, the Real Estate Research Council, calculates prices three times a year on hundreds of sample houses. This is the only accurate method of calculating the direction of prices.
It is true that in areas where there are large pockets of foreclosed properties, prices are still dropping, but for each of those areas, there are other areas where prices are actually moving up. Prices on high-end properties in the Beverly Hills and Bel-Air areas are actually up about 10% from where they were two years ago. The same is true of Calabasas, Pacific Palisades and Brentwood.
For you to describe me as one of the few “die-hard optimists” and a “real estate agent” is totally inaccurate. I head the sixth-largest real estate company in the nation and the largest independent real estate company in the state of California.
I can hardly be described as an optimist when I was the broker who in 1991 sent out letters to 5,000 property owners of our exclusive listings, telling them that the real estate market was going to get much worse and that they should either take their home off the market for three years or drastically reduce the price should their agent feel it was needed.
The story of this letter was carried nationally by the media because nothing sells like bad news. I didn’t sound like a die-hard optimist to the national media, and I certainly didn’t sound like one to my competitors, who in hindsight look like Pollyannas.
To prove that the media likes bad news, I recently was interviewed by The Times regarding a new letter I sent out to clients saying that the real estate market is now in recovery. It is interesting to note that the local media was not interested in the story, but it was picked up by a national publication. As we know, good news is not as exciting as bad news.
The reality of the real estate market is that there are still regions that have a high percentage of foreclosed properties, such as the Inland Empire, where prices will continue to fall. However, there are many other areas that will see price appreciation equal to the inflation rate by year’s end.
FRED SANDS
Founder and president
Fred Sands Realtors
