Read the Media Carefully

The MN REALTOR® Resource Update distributed by e-mail today to subscribed REALTORS® had a great article by Chris Galler, MN REALTORS® Senior Vice President.  Chris' conservative reputation and outspoken opinions have become legend among Minnesota REALTORS®.  Never afraid to forecast doom and gloom, Chris was shouting warnings of a market turn before it ever happened. 

Today, Chris published an article geared to help Minnesota REALTORS® understand the current economic turbulence.  Excellent in its entirety, the article gave a basic explanation of the current situation without inflammatory and hair raising scare tactics.  It helped me to understand another aspect of what is happening in the market today without panicking.

Quotes from Chris' article include the following:

• "The vast majority of people are not in trouble. About 3% of total households are behind on mortgage payments (33% of households have no mortgage) and about 1% eventually go through foreclosure.
  
• Most homes are not mortgaged over their true value. The national number is that home owners have a 71% LTV mortgage on the property (2006).
  
• The foreclosure level of today is very similar to the foreclosure level in 1986 from a national perspective. MN did better that time around."

Doesn't that sound reassuring?

Ah, well, never fear.  Panic can be restored by the third article in the same publication.  Don Smith, Esq., legal counsel for Minnesota REALTORS®, introduced an article on short sale strategies with this sentence:

"The growth of short sales (i.e. circumstance where mortgage debt exceeds the fair market value of the house and necessitates the lender discounting the mortgage to effectuate a sale) has reached epidemic portions [sic] in Minnesota and throughout the country."  (Bold emphasis is mine.)

Here I was feeling a bit relieved reading from Chris Galler that only 1% of mortgages will default, and since only 2/3 of the population even have mortgages, our nation might survive, only to have that hope poppped with Don Smith's frightening words aligning short sales with THE PLAGUE!

Our  words are so powerful and can be so loaded with emotional meaning.  No wonder published works have so much impact!

Comments

[realestateinvestingshortsaleforeclosure]

Well, be careful and find great deals that suits your interest and money.

[Lease Option]

I think it is pretty bad. But to fix problem, by trying bailout the banks, SO THEY CAN MAKE MORE LOANS, may not be the best answer.

[Josh Neumann]

I guess we will have to wait and see how this all plays out. I personally don't feel it's as bad as the second article seems to imply, but again, I'm not a realtor, so what do I know? Still an interesting read though.

[Teri Eckholm]

Hey Bonnie--I too read both articles and loved Chris' take on the stats but didn't catch the epidemic/plague reference in the one on short sales...I can almost hear you pointing that out in real life. Thanks for the laugh on a not-too-funny subject. :)