Let's apologize media: There really was a housing bubble

A recent reader of my blog — check one post down — took me to task a bit, asking me, in essence, why the media so often get a free pass for the role they played in the housing boom and bust that sent the country into the Great Recession.

Well, that reader is right. The media didn’t do their job — well, many of them — in warning consumers that it was highly unlikely that housing prices would continue to soar as they did up to about the mid-point of 2006.

A whole host of economic and housing experts before 2006 boldly predicted that there was no such thing as a housing bubble. As anyone trying to sell a home today knows, those experts were wrong. Housing values have collapsed. Some homes will never again be worth what they were on Jan. 1, 2006.

And many real estate reporters — myself included — did precious little to press these economic superstars on why they thought real estate was immune to crashes. It was easier to constantly report on the rising home sales and home values throughout the early 2000s. What can I say? Reporters are fairly lazy.

Anyway, there have been since the housing crash some interesting looks back at the bold “no bubble” promises made about housing. AOL Real Estate a couple years back ran this story commemorating the fifth-year anniversary of Alan Greenspan’s pronouncement that there was no housing bubble. If you go all the way back to 2005 — if only we could — you can read this story in the Washington Post about Ben Bernanke’s theory that a housing bubble did not exist.

But here’s one of my favorites: It’s old, from 2008, but the Economics of Contempt blog provided a great look back at the many pundits and experts who were fantastically wrong about the housing bubble, and the media outlets that spread their theories to home buyers and sellers.

So, yes, the media bear their share of the blame for the housing crisis. The question is, when housing prices finally to start to rise again — far, far in the future — will members of the media have learned their lessons?


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