GATEWAY PERSPECTIVES: Stick to the Facts
Richard Haggerty | August 12, 2022
Between screaming news headlines about out-of-control inflation and the negative drumbeat about a slowing economy leading to big drops in home sales, I can’t help but think about the folk tale with Chicken Little warning everyone that the sky is falling.
Too often the media focus is on speculation and opinion as opposed to facts. The rule of thumb seems to be that provocative headlines grab eyeballs, not substantiated facts. Just think about it, when you are scrolling through your news feed online, it’s often the column title that gets you to click on the article, which then translates to increased advertising dollars. However, real estate is a numbers business, and we need to focus on the numbers and not the headlines.
When preparing the recently released 2022 second quarter sales report, HGAR and OneKey MLS fully anticipated that sales would be down when compared to the second quarter of 2021. However, as I pointed out in the commentary accompanying the sales report, any comparison to 2022 sales numbers to 2021 sales numbers was challenging at best. In 2020, the market was hit by a complete slowdown for months in reaction to shutdowns imposed to prevent the spread of COVID-19. In the second half of 2020 and 2021, the market came roaring back, fueled by post-pandemic demand and dramatically increased consumer desire for more space.
We know that the 2022 real estate boom was not sustainable in the long run, and it was time to take a breath. We also know that real estate is cyclical. However, since the recovery from the 2008 recession, which lasted approximately a year-and-a-half, the economy and the real estate market slowly but surely began an upward climb with very few bumps in the road, and folks started to take that positive trajectory for granted. Even when the pandemic slammed into the economy in March of 2020, literally bringing us to a standstill, the recovery was so steep and so quick, folks seem to take it for granted. The 2020 year-end sales numbers barely reflected the fact that the real estate industry was shut down for almost an entire quarter.
My intent in this column is not to sugarcoat the numbers or to suggest we are not experiencing a market correction. Quite the contrary, I think we are seeing a changing market that is being affected by rising interest rates, high inflation (which, if focusing on the numbers and not the headlines—shows signs of ebbing) and continued supply chain issues. However, market corrections have always been part of the reality of this business and, quite frankly, it’s when I don’t see the occasional market correction that I start to get nervous.
On the plus side we are still seeing a strong jobs market, and while I rarely look into my very foggy crystal ball, I continue to believe that the real estate market in this area is going to continue to evidence overall stability. At the end of the day, we know that homeownership is the greatest path to the creation of generational wealth. That’s the message we must continue to hammer home with the homebuying public. We must convince them to tune out the white noise of negative headlines and the doom and gloom of Chicken Little yelling the sky is falling. Focus on the numbers, not the speculation. Focus on the facts, not the opinions. Remember that real estate is a cyclical business, and you, as real estate professionals, play a vital role in keeping the public educated and informed, and focused on the facts, and not the headlines.