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Lonwontbuy

HPI media bias

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So I've been lurking here a couple months - one thing that has stood out the most for me is the almost complete one-sided coverage of HPI and the housing market in general by the media. Sure, when I read articles before, I would take any quotes from Estate Agents with a huge dose of scepticism, but, for example, the huge decline in sales has barely been reported in the last few months, while the media are quick to play up any small increase in prices as meaning the market is buoyant since the Brexit vote. This is the kind of thing I was oblivious to before I started reading these forums.

I came across this article today, which is typical...

http://www.theweek.co.uk/house-prices/61987/bank-of-england-confirms-house-price-recovery

"Mortgage approvals are now at the highest level since March" - presumably this is mostly re-mortgages?

"According to a study by the National Association of Estate Agents this week, there are now more than ten buyers for each property for sale in the UK". 

So my question to you HPC veterans is, what are the most common ways that media outlets misreport or mislead with the data? Are there any that have started to step back from such blatant bias now that the market is cooling? The BBC coverage is very geared to ramping, I've found only the guardian and independent have been carrying stories about the cooling market.

 

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seems it is often subtle but no less effective in supporting sentiment. Expressions like "the market is pausing for breath"...the implication being that it has been running up strongly and will run off again soon...dont worry...

I think the most damaging message however is that all the offices of state have your back...dont worry we will prevent a correction even if it means the end of our civilization.

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Firstly, the 10 buyers per property is ********. There may be 10 offers per property that is sold but that is not the same thing. Even in the most bullish of markets, only 70% of properties marketed sell, and it can be as low as 5% and yet still prices increase.

The rest are kite flyers who get no offers at all and eventually either they catch a fool, prices catch up to the point of value, or they give up and take it off the market. Most people fail to sell their house, that's a fact borne out by years of research on my part.

Rightmoves "time to sell" is a good example of how this fact is twisted to give a false impression of the market. A house has to sell before being included in the statistic. It is represented as a measure of demand but it excludes the overall time on the market, including property that does not sell.

The kite flyers serve a purpose though. I suspect they are even enlisted deliberately by estate agents for that purpose. Properties the agent knows will never sell at that price, but make other properties look cheap in comparison. Their function is to give the impression that property is worth more than it is - an advert. 

As far as media memos go, yes I agree "pausing for breath" is a good one. It serves the dual purpose of implying that the market is a being, willing higher prices but sometimes running out of breath, only to inhale and the blow some more, plus the implication that this pause represents the ideal buying opportunity.

There is NEVER a bad buying time according to the media. If prices are rising, it is an opportunity to buy. If prices are falling, it is an opportunity to buy. Look out for "relief for first time buyers as house growth slows". Where is the relief? The urgency to buy must be the only relief but the implication is that there is an opportunity to buy.

There is also the tendency to only report on regions where prices are rising. Part of a greater narrative that rising prices can only be good. Homeowners Rejoice as prices rise!

About a year ago, the BBC had an article about where in the country prices hadirectly risen the most. In the top 5 was Merthyr Tydfil. Prices had fallen in Merthyr that month, but in the same month a year ago they had absolutely collapsed. Prices were down massively on a timescale of more than a year, but because they'd not fallen quite so much in the same month that year, it made the top 5. A statistical anomaly, reported as a house price boom. 

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Speaking as an example general public HPI fanatic, a commonly cited response in Comments Sections to articles that posit that a HPC is possible goes something like this:

"Gee, this article seems to think that a HPC is possible, with prices dropping 30%, 40% or even 50% in a relatively short time. I can't wait, my family and I would really like to get on the housing ladder, but not an insane price. This would be such good news for myself and many others like me."

Response from HPI'er is immediate and goes as follows:

" I fear that what you expect to happen simply will not happen. If House prices crash then all bank lending for any mortgages will cease, while deposit requirements will increase enormously. Such a HPC would also mean a general depression in the economy, so that you would find that you may very well lose your job, not be able to find another one, or at the very least you will take a very big pay cut. In other words, a HPV will not mean that you could afford a house, it may even make it much more difficult for you to own a house. It would be much healthier for all of us if the Property Market continued to boom."

Basically, HPI fanatic is saying that we are all in the same boat together, and if you try and change course, then you will sink the boat, along with your family and the country. Hence, you MUST support HPI forever. Any sentiment to the contrary is worse than reckless, it is insensitive and even possibly evil, as it is consciously dangerous.

Its a complete ******** argument by HPI'ers, but its very common to see it in Comments, and I've even occasionally seen it cited by financial journalists.

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