The Media’s Fixation with Foreclosures

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Let’s face it - negative news sells!  Very seldom are headlines written by the media that have to do with positive things that happen in our society.  The real estate foreclosure situation is another event in a long line of stories that the media is sensationalizing to sell their product.  The problem is that consumers are actually buying into what the media is spewing forth as the next coming of the Black Plague.

Before I get too far into this post, I want to make two things very clear.  The first is that I want to disclose up front that I’m a real estate broker who makes his living listing and selling real estate.  I have a biased interest in promoting my product.  Secondly, I don’t want to make light of the fact that foreclosures are a terrible thing.  When a person loses their job or some catastrophic event occurs in their lives that prevents them from paying their mortgage, my heart goes out to them.  Now that my cards are on the table for all to see, let me hop up on my soapbox for a minute.

Real estate foreclosures across this nation are up.  There – I said it.  I agree with the media.  According to the latest statistics compiled by Realty Trac, a well-respected web site that tracks real estate foreclosures, they are up nationwide in November of 2008, 28.9% from the previous year.  As a consumer, if I heard that figure, it would cause me to sit up and take notice.  But what the media fails to point out are ALL the figures behind the increase.  When Realty Trac crunched their numbers for Pennsylvania, they calculated that .073% of households were involved in the foreclosure process at the end of November 2008 (No - I didn’t put my decimal in the wrong place).  Put another way, that’s about 1 out of every 1,300 households in the Commonwealth.  Do these numbers indicate that foreclosures are up in our state?  Absolutely.  But does this in any way sound like a financial epidemic of epic proportions?  There is no question that some areas of the country have been hit harder than others, but Pennsylvania is just not one of them.  In fact, Realty Trac has determined that only 5 states (California, Florida, Michigan, Nevada and Arizona) account for close to 60% of all foreclosure activity.  As mentioned previously, real estate foreclosures are not pretty.  But what is disconcerting to those of us in the real estate business is that the mass media is proclaiming that foreclosures are running rampant when in fact, especially in Pennsylvania, that just isn’t the case.