Blame Television for the Bubble

[question everything]

JANUARY 3, 2009

Blame Television for the Bubble
The real housing villain is on cable.
By JIM SOLLISCH
WSJ

So now we know what happens when too many people who have too few assets buy too much house with the help of too many risky mortgage products and too little oversight. And while there's plenty of blame to go around -- unethical mortgage brokers, greedy bankers and irresponsible homeowners -- one culprit continues to get off scot-free: HGTV.

That's right. The cable network HGTV is the real villain of the economic meltdown. As the viewership reached a critical mass over the past decade -- HGTV is now broadcast into 91 million homes -- homeowners began experiencing deep angst. Suddenly no one but the most slovenly and unambitious were satisfied with their houses. It didn't matter if you lived in an apartment or a gated community, one episode of "House Hunters" or "What's My House Worth?" and you were convinced you needed more. More square feet. More granite. More stainless steel appliances. More landscaping. More media rooms. More style. You deserved it.

If you had any doubts about your ability to afford such luxuries, all you had to do was look at the 20-something couple in the latest episode choosing between three houses. Should they go for the fixer-upper, priced at $425,000? Or the one with the pool for $550,000? What about the one with room to grow for $675,000? "How much money can these people possibly make?" I shout at my wife before wrestling the remote from her house-hungry little hand and switching it to the nearest sports program. "The guy can barely string together two sentences!"

And yet on episode after episode for this entire irrational decade, HGTV pumped up the housing bubble by parading the most mediocre, unworthy-looking homeowners into our living rooms to watch while they put their tacky, run-of-the-mill tract homes on the market for twice what they paid and then went out and bought houses with price tags too obscene to repeat. You couldn't watch these shows without concluding that you must be an idiot and a loser if you lived in a house you could actually afford.

HGTV is an evil empire that never rests. You can loathe your current domicile 24/7 with programs such as "Stagers" (move a few things around and double the value of your home); "Designed to Sell" (you can sell your house, even if the house next to yours is in foreclosure); "Design on a Dime" (see, it's cheap); and "Property Virgins" (losing your virginity was fun, wasn't it?) Every show features highly attractive hosts who show you how to "unlock the hidden potential" in your home, how to turn a $10 thrift-store table into a "wow" media center, and how to make everything "pop." Pop is the word of choice on HGTV. Ironic, isn't it, given the fact that pop is the sound we keep hearing from the McMansion-sized housing bubble HGTV created.

http://online.wsj.com/article/SB123094453377450603.html

[w4rma]

1. A single home shopping network is the cause? No. Not even a major cause. (nt)

[Idealism]

2. Dammit, and I thought my laundry list of blame was finished...

Alan Greenspan
George Bush
Phil Gramm
Chuck Schumer
The jackass who came up with "McMansion"
Washington Mutual
HGTV

Oh and my neighbor. He knows why.

[NJCher]

3. I agree

I can't tell you how many people I know that talked about these shows back during the housing bubble.

Absolutely it had an influence; certainly not the major cause but a definite influence, right along with real estate agents.



Cher

[Mind_your_head]

7. What's 'wrong' with real estate agents?

Agents, by definition, only help put buyers and sellers ~ and ultimately a "deal" together.

Why blame/what's 'wrong' with real estate agents?

[Idealism]

14. Many lie about their product to get the sale

They are no less complicit than anyone in the ponzi scheme known as the residential real estate market from 1999-2006

[Merlot]

16. They pushed the mortages on people who couldn't afford them

or in my case, tried to. I didn't buy but was amazed at how they kept pushing me and telling about all these great mortages made for "people just like me."

[NJCher]

21. hyping the value

around here some real estate agents use scare tactics to get the buyer to sign. They also use manipulative tactics with the buyers. No matter whether it's an up or a down market, I see them using these tactics. Your definition ("Why blame/what's 'wrong' with real estate agents?") would be in the dream world.

In a hot market, it's "buy now--it will be up 4 per cent next month!"

In a down market, it's "this is as good as you're going to do. Better take the deal."



Cher

[question everything]

23. Many years ago we visited an open house. The agent really trashed

the place.. look at this and look at that, hinted about the owners' need to sell - all to convince us that this would be a deal, if we were just willing to put a (low) offer.

The thing is, that agent represented the buyers! She had a fiduciary responsibility to have their best interest in mind. I don't know, perhaps they would have approved of such a tactic but we just left in disgust.

[Alcibiades]

22. There are good ones and bad ones

But the industry itself is an iron triangle that controls the regulatory process. Realtors have a powerful lobby, and, along with banks and developers, helped to fuel this bubble through the political process.

They make their money off sales. Period. They had no long-term incentive to make sure folks could make payments--heck, if they couldn't, they would make money when the folks resold the house to stave off foreclosure. They (by which I mean the industry as a whole, not necessarily individual realtors) bought their own propaganda in defiance of all common sense, and thought the market would boom forever. They also did help fuel the phenomenon this article is addressing, which is the "upscaling" of the housing market: if you make a fixed percentage off of a sale, that's a powerful incentive to make sure everybody buys the most expensive home they can afford.

[Donnachaidh]

4. HGtv was an enabler of greedy mortgage brokers and banks

Which, BTW, were ADVERTISING on EVERY channel, way before HG even came into existence.

This is like blaming one chain smoker on main street in PodunkTown, USA for the thousands of lung cancers developed globally.

ADVERTISING and MARKETING, and every single channel that carried ads for easy mortgages, or new housing developments are far more to blame that HG.

Frigging LUDICROUS piece -- but hey, doesn't Rupert Murdoch now own the WSJ? Of course he's going to play pin the tail on the scapegoat. Of course, I'd like to review his books to see just how many Mortgage loan ads he ran on Fox Television stations for the last ten years. And I'd LOVE to see exactly how MUCH he made from them.

[question everything]

6. You did realize that he wrote it with tongue firmly in his cheek?

No, of course it was not the main cause, but it certainly seduced many people to follow what the channel suggested.

[Donnachaidh]

11. all the while giving a total PASS to the networks and cable channels

For decades of advertising sold to banks, realtors, and anyone else who made fortunes from the market.

Yeah, his tongue was *somewhere*. But I'll refrain from saying exactly WHERE.

[DJ13]

5. At the high of the housing bubble HGTV was like crack for housewives

I know my wife wouldnt stop watching those house flipping shows, and it made life kinda rough around here when she wouldnt stop complaining about our house compared to those mini mansions they kept showing.

[question everything]

8. That's sad. I hope that she has now overcome this addiction (nt)

[Dr.Phool]

25. My wife STILL watches that stupid shit.

Even though she drives past houses in our affordable neighborhood that have been foreclosed. There's one riverfront place down the street that flipped 3 times in less than 6 months, 3 years ago. It's been vacant, for sale or rent, since then. I could have bought the nicer place, 2 doors from there, 6 years ago, for less than 1/3 of the last known listing price.

[BlooInBloo]

9. No matter what, it's never the person who signed the papers' fault. Welcome to America.

[PSPS]

12. Yes, heaven help us if we blame the liar for getting the liar's loan.

Time for another bailout to keep that $25K/year worker in his 750K McMansion!

[snot]

10. b.s.

HGTV didn't force banks to make bad loans.

[LibDemAlways]

13. "House Hunters" is a fraud. I personally know a couple

who appeared on it a couple of years ago. Their choices were represented as a high rise Tampa Bay condo and two swank homes. In reality they had already purchased the condo before they filmed the show. The other two homes were "shills" that happened to be on the market when they began filming.
All of the "Which home will they choose?" drama is fabricated crap. They've already signed on the dotted line before the cameras rolled.

[KT2000]

15. How dare anyone live in a house

without granite counter tops!
No stainless appliances? shame on you!

HGTV sells what everyone else is selling - dissatisfaction with what you have or are.

[Fearless]

17. And the scapegoatting continues... sigh

:eyes:

[silverojo]

18. One thing HGTV *is* responsible for

People decorating their homes in incredibly bad taste. Clashing patterns, dark paint on walls, butt-ugly chrome kitchen appliances, hideous stone tiles...I swear, this has nearly topped the 1970's as The Decade That Taste Forgot.

Can you imagine, when people finally come to their senses, how they'll be frantically painting, replacing, taking sledgehammers to the stone tiles...ANYTHING to make their houses look like homes again.

[Festivito]

19. "Pay no attention to the man behind the SEC curtain!" Move along.

Nothing to see here.

NO NO NO

Don't look at an April of 2004 rule change un-limiting big banks from how much they can lend per dollar in their bank.

Nope.

Don't look there. Find a bunch of other things to blame like Freddy and Fannie, or, um, HGTV, yup, there's the ticket. Hmmm. Must be those home buyers and resellers and those convincing others to buy houses.

Set the meme: both sides do it. Shhhh. So people won't retain the idea that Republicans did it.

[muriel_volestrangler]

20. "Mr. Sollisch is the creative director at Marcus Thomas LLC"

Cleveland’s integrated marketing communications agency. Marcus Thomas offers full service advertising agency, public relations, interactive and research for business-to-business, business-to-consumer and nonprofit organizations

http://www.marcusthomasllc.com/index.php

So there's no possibility at all that Mr. Sollisch might himself be responsible for overselling the consumer lifestyle to the public, is there? :sarcasm:

[Still Sensible]

24. Such Pure Horse Shit

Anything to misdirect blame from greedy pricks that couldn't find a way to maintain their growth without creatively enticing people to borrow more than they could afford... and getting regulations modified and/or ignored to make it easier to do so. Screw that.

[roseBudd]

26. a year ago it was "Flip That House"

[Miss Authoritiva]

28. Those house flipping shows were insane.

OMG, those programs that showed rank amateurs flipping houses were terrifying to watch. Those idiots would buy houses with structural defects and think they could get away with just fresh paint and a new granite countertop. Oh, and every house was priced well over $600,000. At least I learned what an asset bubble actually looked like.

[tabbycat31]

27. i agree

and my mom watches HGTV so much that I've had the cable company block it for me so I don't even stumble across it.

I said for a long time that they're partially responsible for this housing bubble. Now someone finally agrees with me.

[Phoebe Loosinhouse]

29. HGTV acted as an accelerator for the general More, More, More housing zeitgeist of the bubble

I admit that I am also hopelessly addicted to HGTV, but more in the way that people are addicted to rubbernecking highway accidents or watching Cops to see what new horror is being perpetrated by a beer gut guy in jeans with no shirt.

There are some "housy" shows that are great - "This Old House" an old PBS staple for example, where one could actually learn about structure, building and restoration techniques and architectural vernacular. These shows are the exception.

The house shows on HGTV do something more insidious. They celebrate consumerism. Wretched, excessive, self-destructive, addictive,
budget busting Consumerism.

They CONSTANTLY tout size as triumphant and the ultimate signatures in luxury that should/must be desired by everyone are: granite countertops, stainless steel appliances, and HIDEOUS Terrazzo tile on floors and in bathrooms. "How much did you spend to redo this kitchen?" asks the appraiser. "Oh, about 80K" chirps back the homeowner. "Well, you'll get every penny of that back. THIS is what todays buyers want." Or the appraiser acts as an Inquisitioner -"May I ask why you didn't go for double sinks? There's clearly room if you had just knocked through this back wall and added 4 ft. That's going to hurt you."

They also advise people to use what little equity they have to add more square footage and more refined finishes. They have never heard the term "over improved". Equity is presented as something people draw from to replenish the housebeast's insatiable appetite. More must be bought. There are outdoor kitchens to install, faucets to be put over stoves, concrete driveways to be stamped, get with it! Your neighbor will surpass you! They are installing TRIPLE SINKS! It's what today's buyers want!

What today's buyers want, or are told they want, will become tomorrow's cliche.(In one of life's great ironies, we now find out that some granite countertops leach radon. Do today's buyers really want portable oxygen cannisters in their later years?)

The next round of shows will show the new buyers curling their lips and saying, "It's nice, but the terrazzo is so 15 minutes ago. We'll have to gut this whole thing."