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Real estate after the downturn

forclosureBy Stephanie Riel

Covering today’s real estate market requires a new set of skills. With foreclosures saturating community markets, business journalists have to find fresh sources to help make sense of the downturn.

Seasoned real estate reporters rely on a variety of databases and sites to keep focused on sales, foreclosure and delinquency rates for better coverage on the beat. These new sources also can serve as a predictor of when local markets could improve.

Shifting Sources

With the proliferation of information on the Internet, some business journalists have found themselves searching for a new Rolodex of sources that are proficient in explaining the ins and outs of housing foreclosures, mortgages and delinquencies and distressed properties such as short sales.

“The first thing you’ve got to have is the broadest toolbox possible,” said Jon Lansner an OC Register business columnist and real estate blogger.

Lansner, who has been with the California paper for more than 20 years, said that a key element of covering today’s residential real estate market is to be open to reporting information from a variety of databases because no one database is perfect.

“The real estate market has changed,” he said. “In the old days it (sourcing) was a real estate agent and then one analyst.” But now with Web sites like Zillow.com, he said real estate coverage is becoming more like the stock market, where stories use information from the various exchanges to report the full story for each day.

“There’s nothing wrong with reporting four different opinions in the market,” said Lansner. Since the market is confusing at this stage, coverage should be broader so readers can get a flavor of the full climate of the real estate market in their area so they can make educated decisions, he said.

For Jamie Smith Hopkins, regional economy reporter for the Baltimore Sun, covering the drop in the housing market in Maryland has been similar to tackling the market upswing just a few years ago. One change – she’s relying more on delinquency and foreclosure rates than before.

Data Crunching

No matter what trend the real estate market is experiencing, comprehensive data is key element for solid housing stories.

Smith Hopkins said there are a lot of sources for data, but reporters have to be careful of companies they are retrieving information from because some are not as reliable as others. The best way to verify the figures is to compare them with research from other sources like public records or auctioneers in your community, she said.

Gerri Willis, personal finance editor for CNN Business News and host of CNN’s “Your Bottom Line” says that although the beat has gone from covering a huge expansion to a huge contraction, reporters still have to “look into those sources that have sophisticated data.” She recommends paying attention to home prices and Web sites like Moody’s Economy.com and the National Association of Realtors’ Web site for strong data on the trends of the market.

Also for improved coverage, Willis suggests reading trade publications to keep your brain sharp on the industry’s language and seeking out residents impacted by the housing slump in your community for a local snapshot.

Smith Hopkins said to look at sites like the Federal Housing Finance Agency , the revamped Office of Federal Housing Enterprise Oversight Web site for housing stats that “try to compare home sales apples to apples, comparing a house sold to that same house sold previously” for their data. Other web resources include the Metropolitan Regional Information System, which is the largest MLS is the nation. And the Mortgage Bankers Association that tracks state delinquency rates quarterly.

Noticing the Next Boom

Speculation that the national market is trending upward increases the pressure for reporters trying to gauge the progress of their community’s housing market.

Dow Jones real estate reporter, Dawn Wotapka said to look for local price stabilization, and sale increases as beginning signs of a turnaround in your local area. Also, keeping up to speed on the progress of new home construction is another good indicator of an upswing in the climate of your coverage area.

According to some, sales may be one of the best indicators of market strength.

Smith Hopkins said keeping an eye on sales and not just prices will be a preliminary indicator of an upswing in your market. Due to an increase or decrease in the demand, a movement in sales will trigger a respective shift in prices.

Monitoring foreclosure rates is another indicator of the climate.

Finding what percentage of sales are short sales and foreclosures on your beat is another good way to chart real estate activity in your area. “If fewer are distressed properties then foreclosures may be clearing out,” Smith Hopkins said.

Also observing the delinquency rates can help gauge what is to come.

“It is important because not all of them are foreclosures yet,” Smith Hopkins said. But since owners of those properties are behind on their home payments, the properties could still end up going back to the bank. Watch those statistics because they can serve as a good predictor of what is on the horizon for your community’s housing market.

Need more data on real estate activity in your community? Check out the following Web sites that reporters on the beat find helpful:

Stephanie Riel is a former intern at the Reynolds Center.

In Basics, Beats.

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