Newspaper, Bubble Blogs Feed the Real Estate Obsession

Have you ever gone to an open house even though you weren’t interested in buying the property? Have you ever pored over housing price data on Zillow or read through housing ads on Craigslist just for fun? You are not alone. There seems to be a growing obsession with real estate in the U.S., as home prices have soared in the past few years, only to come back to earth a bit in the past year.

But during that boom — and the current correction/bust — blogs of all stripes have sprung up to feed the need for instant real estate information, photos of noteworthy homes for sale, and the off-color stories related to city living. While some newspaper sites have had some recent success with real estate blogs, independent bloggers who have called the boom a speculative bubble — a.k.a. the bubble bloggers — have found a rabid audience for their bearish views.

“Bloggers have moved into bubble coverage because the media hasn’t done a very good job of covering the reality, and reporters are more conventional and look for the story of the hour and what the statistics are,” said Carol Lloyd, who writes the must-read Surreal Estate online column about the San Francisco Bay Area market. “And some of the statistics are produced by the NAR [National Association of Realtors], and they look like they’re just covering the industry for the industry.”

Lloyd wrote a fantastic primer on bubble bloggers, who she says “have become the sages of the day.” Matt Carter, a reporter (and blogger) for the real estate trade site InmanNews, says the bubble bloggers’ popularity can be traced to a bad case of schadenfreude among some in the public.

“The bubble blogs feed the intense desire many people have — including those who got burned investing in real estate, and first-time home buyers who feel they’ve been priced out of the market — to see housing prices crash,” Carter told me via email. “As was the case during the dot-com bust, people who got left behind want those who were riding high during the boom years to feel their pain.”

The three prominent bubble bloggers I contacted — Rich Toscano at Professor Piggington’s, Ben Jones (pictured here) at Housing Bubble Blog, and Patrick Killelea at Patrick.net — haven’t quit their day jobs yet for blogging. But in all three cases, they have built loyal audiences and have made decent money from Google ads, donations and, in the case of Patrick.net, paid subscriptions ($5/month) for housing crash news.

One of the strongest aspects of these blogs is the online community of readers that sprouts up around the subject of real estate. At the Housing Bubble Blog, Jones regularly asks his readers to contribute “Craigslist finds” (listings of interest), and often gets more than 100 comments on each blog post. And Killelea (pictured below) regularly polls his readers at Patrick.net, and even had a Photoshop contest recently.

One of the ironies of the bubble blogs is that some of the money they make is from Google ads for realtors or mortgage brokers who want to sell, sell, sell! In other words, while the bubble bloggers are warning people against buying properties, their ads are promoting buying properties. The irony was not lost on Toscano, who said only a “very small proportion” of visitors actually clicked on the ads.

“If people want to click through and see what’s being offered, that’s cool by me — my intent is not to get the reader to do this or that, but to provide him with information that will help him make good decisions,” Toscano said via email. “It surprises me a bit, but I guess a lot of people who visit the site are seeking information, and perhaps those ads offer info about what is out there in the mortgage world and so forth.”

Newspaper Blogs as Moderate Voices

Toscano, who is a securities broker in his day job, is one of the more astute observers of the economics of the housing market, sprinkling his blog with a heavy dose of charts and graphs. His latest finding was that the real cause of the last slowdown in real estate in his hometown area of San Diego in the early ’90s was not from unemployment or interest rates, but was the inevitable result of the speculative bubble that preceded it.

Toscano (pictured here) dings mainstream real estate reporters for relying on expert quotes from analysts who are in bed with the real estate industry — meaning, the quotes are likely to give a positive spin to any negative news. “The other [problem] is that they tend to mirror conventional thought and to shy away from contrarian or non-mainstream analysis, regardless of merit,” he said. “As one example of this phenomenon: Despite the fact that we had been in an obvious speculative bubble for a long time, the media didn’t seriously address the possibility of a bubble until AFTER the housing market had slowed down substantially.”

But Inman’s Carter gives the counterpunch to bubble bloggers for also being one-sided in their viewpoint.

“These sites are guilty of the same sin they accuse the real estate industry of: presenting only one side of the story,” Carter said. “They highlight the most dismal news from the most stressed markets — that foreclosures are up, inventories are rising, and prices falling — without providing any context. A lot of these blogs would have you believe that all of the runup in prices was artificial, fueled by speculation and the easy availability of credit. The fact is, housing prices remain stable or continue to appreciate in areas where jobs are plentiful and housing is scarce. There are sound fundamentals in some markets, but you would never know it from reading the bubble blogs.”

Perhaps that’s an opportunity for newspaper bloggers, who can balance the bears in blogging with the bulls in industry. Many newspaper reporters and columnists that cover real estate are now becoming bloggers themselves — and they’re trying not to take sides in the bubble debate. Newspapers have been super-sizing their online real estate coverage as interest has grown. In fact, newspapers’ print real estate ad revenues were one of the bright spots on a recent economic report from the Newspaper Association of America. Print real estate classifieds were up 10.5% in the third quarter, while all classified ads in print were down 3%.

The Orange County (Calif.) Register and Palm Beach (Fla.) Post have had success with real estate blogs focused on their communities, while the New York Times actually shuttered its real estate blog because it had too much of a national focus. Jon Glass, the Palm Beach Post’s online editorial director, told me their group real estate blog, The Real Deal, was consistently in the top three or five blogs in traffic out of the site’s 30 blogs.

“We launched [the blog] in May of this year, and the inspiration was our market,” Glass told me. “Palm Beach County remained a hot market longer than the rest of the market. Come about May it finally caught up to us. We wanted to provide an outlet to talk about real estate in our community…The blog took off immediately, you can tell by the number of comments and strength of the threads. We wish we had started it months before or the year before.”

I asked Glass if the mainstream media was guilty of not predicting the bust ahead of time — similar to accusations that the media had ignored warning signs around the dot-com bust — but he deflected blame. “We covered the real estate market with an ongoing series called ‘The Housing Boom,’ which shifted at some point this year to ‘The Housing Squeeze,’” he said. “I correlate this with patterns of housing costs and values in our market. The story went from how people were making beaucoup bucks to how people couldn’t afford to live here.”

At the Orange County Register, columnist Jon Lansner’s real estate blog, launched this past February, has been the No. 1 blog on the site in traffic “by about four-fold,” according to Lansner (pictured here). He explained the natural attraction people have toward real estate stories and how he’s trying to differentiate himself from the bubble bloggers with a moderate bent:

Let’s face it. Real estate has a natural hook. For many folks, it’s their most valuable asset!…Blogging probably works with this topic because there’s a grand bubble debate — crash coming or not. My blog features hearty arguments supporting and deconstruction of both sides of the argument. That creates an amusing forum that those who just care to watch — the so-called ‘lurkers’ — seem to enjoy.

The most energetic real estate bloggers are decidedly bearish in their outlook. They feel traditional media outlets are too pro-real estate — something I think they’re wrong about — so [readers] flock to ‘bubble’ sites where they can rant in unison.

But what will happen if the market does crash and boom again, or whether it’s just a slow poofing souffle? Will people still be enamored with every economic report coming out of Northern Iowa or a suburb of Phoenix? Or does the universality of everyone having a home — whether rental or as an owner or landlord — mean this topic will be fresh for years to come? Perhaps online aggregators that sum up real estate news from all sides, from bear to bull, will be the most valued in the future. Time will tell.

Here’s a smattering of recommended real estate blogs to check out:

Billings (Montana) Housing Market

Bubble Meter

Carnival of Real Estate

Curbed

David Lereah Watch

Flipper Nation podcast

Future of Real Estate Marketing

House Falls

Housing Doom

Housing Panic

Inman Blog

Lansner on Real Estate

Miller Samuel’s Matrix

New Jersey Real Estate Report

Patrick.net

Professor Piggington’s Econo-Almanac for the Landed Poor

The Real Deal from the Palm Beach Post

The Real Estate Bloggers

Sellsius

SocketSite

What do you think? Which blogs or websites do you use to follow real estate news? Share your thoughts in the comments below, and I’ll update the list with any missing important sources.

UPDATE: I received an interesting email from Doug Armknecht, who was inspired by The Housing Bubble Blog to create his own web page with statistics and analysis for the Billings, Montana, housing market. He also created an informative 20-minute mini-documentary that you can watch on Google Video about the Billings market. It’s another example of an independent citizen countering the relentless positive spin of the real estate industry with some real research. Here’s what Armknecht told me:

When I hear friends talking about housing or talking about buying, I refer them to my page just so they will have all the facts and be able to approach the market with more information. If in fact real estate is in danger of a bust, then a lot of first-time homebuyers could get burned. And who can they ask about the market, except for realtors who are happy to say, ‘It’s a great time to buy’? My site provides an alternative.

It is my hope that more people will do this type of thing in their local areas, especially smaller cities. The housing market is very important and affects so many people. The best we get from the Billings Gazette is a puff piece, No Bubble in Billings with realtor optimism and no analysis of current trends…So far my video’s created a bit of a stir with the realtors around town. Several e-mailed me to say that I’d nailed the market that they were seeing. A local TV station is doing a story on it next month. And I will continue to analyze this market and produce updated videos as long as I feel that media and the realtors are not telling the whole truth about the market.

By the way, I looked at newspaper articles right before the 1986 crash here in Billings. Headlines screamed “BUYER’S MARKET” and one realtor said, “The days of boom and bust are over.” I think history may repeat itself.

UPDATE 2: Finally, we hear from someone on the realtor side of the equation, who retaliates against the strong rhetoric from the bubble bloggers. Jonathan Dalton, a realtor/blogger in the Phoenix area, breaks down in a rather tongue-in-cheek fashion what he’s learned from bubble bloggers. His conclusion:

There are some in the bubble community who actually are capable of presenting logical arguments and add to the general real estate arguments. I’ve enjoyed conversations with more than one as at least these are the folks who take the time to read the other side of the debate, even if they don’t agree.

There are others so busy basking in their blog-generated fame that they forget their irrelevance to the industry as a whole and would rather blame real-estate agents for everything up to and including acid rain. They lack the sense to know the difference between a realtor and a lender, for example, and rant rather than educate their disciples. And should they turn out to be wrong? What will happen to those who blindly followed them? Frankly, my dear, I doubt any of them will give a damn.