According to Bernice, much of what is published in the media today regarding real estate has been gleaned from the S & P/Case Schiller Index. This index has only been resourced by the media in the last couple years. The S & P is full of doom and gloom regarding the real estate market, but conflicts with the figures published by the National Association of REALTORS® (NAR), the Office of Federal Housing Enterprise Oversight (OFHEO), and Realogy. According to NAR, OFHEO, and Realogy the real estate market is stabilizing, some markets have shown signs of improvement, and prices have fallen less than 1% nationally. (New figures from OFHEO are published here.) The S & P reports between a 12% and 13% decrease in prices. The S & P includes jumbo loans and lends "weight" to certain factors before calculating its formulas. The other three agencies do not. As Bernice says, "weighing" factors is done by human judgment and human judgment is not necessarily unbiased! Scientifically when data produces differing results, it is compared with other sources. In the case of our real estate market, the S & P index is the odd man out producing results that drastically differ from the other three agencies that are reporting on our housing market.
Why is it that the media has picked up the negative story to publish instead of the more positive ones? I'm told it's because bad news sells! My question is whether this bad news can produce a Pygmalion effect on our market.