You can’t believe everything you read in the “Mainstream Media”

It is almost like you can't believe everything you read on the internet. Crazy!

Thanks for fact checking Jay, great post.

<abbr></abbr><abbr>D. Patrick Lewis´s last blog post..REALTOR® or Real Estate Agent…there is a difference</abbr>

Looks like they've recycled a story that was written during the period when the Canadian dollar was worth just about as much or more than the U.S. dollar, from the fall of 2007 to late summer 2008.

Not that that's any excuse. I remember Dan Green getting up in arms a while back because the Cincinnati Enquirer ran a Bankrate.com story that had some out of date info about the spread between rates on 30-year fixed mortgages and the 10-year Treasury:

http://themortgagereports.com/2009/03/mortgage-...

You're a top notch journalist Matt (seriously), would you recycle a story containing hard facts without confirming them first? Particularly something like an exchange rate that changes, literally, by the moment?

Seems... I don't know... fundamental. Like something taught in Journalism 101.

How often are stories recycled in the MSM? It's not like there isn't enough fresh news to report without having to resort to dredging up something over a year old.

Jay, newspaper section editors -- especially those who have seen their staffs cut drastically in recent years -- sometimes rely on canned wire stories or "evergreen" stories that they don't generate themselves, but which supposedly provide some useful information to their readers. An editor may spend less than 30 seconds skimming a story and making a decision that it's relevant.

I am afraid the Sierra Vista Herald has committed an even bigger sin in this case. I found the original source of the story -- it's a press release.

http://www.businesswire.com/news/home/200906180...

While some papers use canned ad copy in their real estate or auto sections, they are supposed to be clearly labeled as advertising. No reputable paper would run a press release like this word for word.

very good point, I have noticed a strong decline in the quality of journalism too. Ever since it became glamorous and everybody can do it for free on the internet, its now a fad to be a blogger/journalist. Unfortunately most of the information that you find online now is bunk or misleading.

<abbr></abbr><abbr>Portland Real Estate´s last blog post..Something for Everyone in Lake Oswego</abbr>

To play Devil's advocate, maybe this is a good thing for bloggers, Tweeters and other social media early adopters. The world has become so vast, and at the same time so interconnected, that some day - Lawd knows when and hopefully sooner than later - consumers will realize they can only rely on information offered by people they know & trust via personal relationships, personal referrals or thru SocMedia. A consumer who knows, follows and trusts his/her local Realtor/plumber/painter/mortgage lender/doctor/lawyer/whatever can be certain they're getting the real deal. Maybe the Internet will bring us all back to a time when you poked your head over the backyard fence and asked your neighbor's recommendation on x, y or z.

<abbr></abbr><abbr>Heather´s last blog post..When Is It Monsoon Season in Phoenix?</abbr>

The media's crystal ball has been broken since 2006. :)

What's sad is that newspapers tout themselves as sources of reliable information, but lose credibility when they do things like this.

From a reader's perspective, with all the fragmentation in media, the first thing you need to do before you dive into a story is ascertain its origin. There are several layers of complexity here.

How many times have you seen a blogger referencing some other blog as "having the scoop" on a story, but when you go to that blog, you see that it cites a newspaper article?

If a newspaper is the source of the information, you should immediately be able to tell whether the newspaper generated the story itself (as indicated by a staff reporter's byline or a credit to "staff reports"), or if it was obtained from another newspaper or wire service.

A sophisticated consumer of media will form their own opinions about which wire services, newspapers, and even reporters are the most reliable sources of information. The same is true for bloggers and that neighbor you talk to over the fence.

For any given story, ask yourself whether the reporter has obtained information from many sources or just a few, and consider those sources' motives.

Not every story has to have deep sourcing or profound insights. It's no crime for a newspaper to summarize the relevant claims made by a company in a press release and publish a brief story -- as long as that information is attributed to the company.

What you should never see in a newspaper is a story with no attribution whatsoever, as the Sierra Vista Herald has done here. Newspapers should NEVER run an entire press release that was written to promote a company as if it were an objective article written by a reporter for the benefit of their readers.

My previous comment about the special auto or real estate sections that newspapers put together was maybe too much inside baseball. To clarify, these special sections are sometimes put together a week or two in advance, so editors can't just pull breaking news stories off the wire. They need topical "evergreen" stories that are always relevant.

At a newspaper with a healthy balance sheet and a stable of reporters, editors might have the luxury of assigning reporters to write those stories. Or they might have access to a wire feed that's deep enough to provide them with the copy they need to fill their "newshole." When section editors pull copy from a reputable wire service, they are not going to fact check those stories (Note: I am talking about news services like AP and Reuters -- not public relations services like PR Newswire or Business Wire, the source of the "story" Jay has flagged!).

But many newspapers don't have the staff to generate special section stories themselves, and they may be purchasing only bare bones wire services that give them a very limited number of articles to choose from.

There are companies that will provide newspapers with free "articles" that are actually product placement pieces. Some smaller newspapers will run these stories in special sections because they don't have the staff to produce their own copy. They don't get any money to run these "articles" -- they only do it because they need something to put around the ads they sell. Newspapers should make the source of these articles clear to readers.

Often, newspaper special sections will include paid advertisements that are designed to look like news articles. Those ads should clearly be labeled "paid advertisement."

My guess is that in this case, the Sierra Vista Herald took this press release and ran it pretty much verbatim not because they were paid to, but because they don't have the staff or wire copy to fill their newshole and thought it would be of some interest to their readers. But they have done their readers a major disservice by not making clear the source of the information.

I don't know if it's fair to say there's been a "decline in the quality of journalism" but there certainly has been a decline in the VOLUME of quality journalism produced in this country.

At the same time, there has been an explosion in "Web site content," which can make it harder to find useful information.

Before you waste your time reading something, you have to ask yourself where it REALLY came from.

Jay,

I am new to this site, but already know that I'm a big fan. But seriously, I suspect that most stopped trusting realtor.org years ago.

To me, this is registers rather low on the NAR richter scale of lies and misrepresentations.

<abbr></abbr><abbr>Dave´s last blog post..Banned SNL Bail-Out Skit</abbr>

My company is working with several different groups of Canadian investors that are helping to soak up all of this foreclosure inventory. They are worried about the currency fluctuations between our 2 countries.

<abbr></abbr><abbr>Brewer Caldwell´s last blog post..Brewer Caldwell is the BEST</abbr>

Matt - I sincerely appreciate your insights and contributions here! Thanks for taking the time to give us some great insight into the world of news reporting.

For those following along and that don't know Matt, he is a reporter with Inman News -- a "leading source of independent real estate news, information, advice, research, opinion and commentary for industry professionals and consumers alike".

So he's a "real live" journalist.

Matt Carter, what a GREAT answer!

<abbr></abbr><abbr>Jeffrey Douglass´s last blog post..La Jolla Market Snapshot for June 2009</abbr>

Good catch Jay.

I have to agree with Dave. People who are actually interested in news don't "trust" real estate organizations, but rather, recognize them as the spin machines that they are.

More disappointing than the NAR publishing its own drivel is the willingness of the actual "mainstream media" to publish it month after month. One would think that years of failed predictions and calling bottoms incorrectly would lose you some credibility in the news room. Does anyone have a worse record than the NAR for predicting real estate trends?

<abbr></abbr><abbr>Norm Fisher´s last blog post..Saskatoon real estate: Week in review (June 22-26 2009)</abbr>

Jay,

I represent Canadian buyers and I follow the Loonie as well as anyone and when I read that it was "at par" with the U.S. dollar I said outloud, "That's news to me!" And I did exactly what you did, I went to Yahoo finance and did the conversion, thinking I'd missed some major news event since I'd checked the conversion rate last night.

I went to journalism school at ASU and spent several years as a business reporter. THERE IS NO EXCUSE FOR BEING THIS WRONG. It's such a simple stat to check. And, NAR. Really. You are responsible for filtering real news to 1,126,599 members. I know that's how many members we have because it took me 7 SECONDS to look it up.

That's how much time it would have taken both the Sierra Vista Herald and NAR to look up the Loonie and pitch that press release in the trash.

NAR, we deserve better.

Melanie -

That was exactly my reaction. We also have many Canadian clients and I wondered what world event I'd missed that would send the dollar plummeting (or the Loonie soaring depending on your perspective) overnight.

And a moment later when I saw "first time since 1976" I thought maybe I'd entered some time warp or something and the first half of 2008 was gone.

Sadly though, you and I were able to immediately spot the error because we happen to have a vested interest in the USD/CAD exchange rate. A more casual observer likely wouldn't, and would simply believe what they read without questioning it.

Hi everyone!
Long-time reader, first-time commenter. First of all, thanks to Jay for bringing this to our attention. As you correctly pointed out, the U.S. and Canadian dollars are definitely not at par right now, and the Loonie essentially was at or even above par with the greenback from Oct. 2007 through July 2008. We didn’t check out the source on this information as well as we should have, and there’s no excuse for that. Our apologies.
Two points, though:
1. The central point of the article was the increased investment by Canadian nationals in U.S. real estate due to a favorable exchange rate between the Canadian and U.S. dollars (from the former’s perspective). Notwithstanding the “on par” characterization, that is accurate.
2. Everyone likes to jump on the “Em Es Em” when they get their facts wrong (hey, I do it too), but I would say we provide accurate information more than 99% of the time. We don’t necessarily expect accolades for that—it’s the sine qua non of our business. Overall, though, I think REALTOR magazine has an excellent track record for accuracy in reporting. Just wanted to get that out there.

Brian Summerfield
Online Editor
REALTOR magazine

Brian,

Noble effort, but I think the underlying problem is trust.

I believe the following quote is a good example of why some feel that propaganda may be more important than facts to NAR:

Lawrence Yun:

“Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions,” he said.

He says that as if it's fact, but let's see the data behind that statement.

Come on.

We have seen this more and more over the years. The media has always tried to control the market and any economic issue. They have been preaching gloom and doom because that unfortunatley is what sells. And the public eats it up. Too bad.

Brian -

Thanks for stopping by and commenting, it's appreciated.

There is no question that Canadian interest has been high -- we have sold many homes to Canadians. I only have anecdotal evidence, but from my perspective the peak of Canadian buyer interest, at least in the Phoenix market, has passed. There is still some interest here, but not nearly like it was when the exchange rates was more favorable in the first half of 2008.

That's really neither here nor there. Given the glaring errors in the article on Realtor.org, wouldn't a correction, retraction or even removal of the article on R.org be appropriate? At this moment in time, it's still there as was originally "printed".

That's fair. Here's the latest version, updated for accuracy:

http://www.realtor.org/rmodaily.nsf/f3c66d0c645...

Thanks again for pointing this out, Jay.

I think the bigger problem here is not the out of date info on currency exchange rates, but that you've got a newspaper running a press release from a public relations firm, and then some of that information gets repeated in Realtor.org with the newspaper identified as the originating source.

Score one for the Westward Fund, on whose behalf Niche Focus Group LLC placed this press release and two others on Business Wire, and zero for anybody who picked this up as a news story.

Something didn't smell right to Jay about the claim that the U.S. and Canadian dollars were at parity. But the closer you look at this, the more it stinks.

I'd originally assumed that some poor editor was unwittingly recycling an old wire story. Turns out it's more involved. If you compare the Westward Fund's press release to the story that ran in the Sierra Vista Herald, most of the story is taken word for word from the press release.

In fact, the entire press release is incorporated into the story. But the story that ran in the Herald also contains some interesting additions.

It quotes Mark Dziedzic, "a former financial planner from Toronto," who is not mentioned in the press release. The Herald story quotes a Frank Nero, "president of the Beacon Council, Miami-Dade County's economic development arm in south Florida," also absent from the press release. And it quotes "Bank of Montreal Chief Economist" Sherry Cooper, who is not in the press release.

Google those names and quotes, and you will find Dziedzic and Nero did, in fact, use the words attributed to them by the Herald -- in an Associated Press story that CBSNews.com published on Dec. 15, 2007. (The quote from Dziedzic also made it into the Realtor.org story, and remains in the corrected version).

Cooper's statement in the story published by the Sierra Vista Herald also turns up in a Calgary Herald story published Sept. 23, 2007.

The press release itself seems to be relying on some borrowed material, as the comment from economist Noah Blackstein -- described in the press release as "one of Canada’s premier U.S. Growth Fund Managers" -- originally appeared in TheStreet.com in the fall of 2007, according to an Oct. 6, 2007 Toronto Star article.

The only information in the Westward Fund press release and Sierra Vista Herald story that doesn't seem to be cribbed from somewhere else comes from the Westward Fund's E. Patrick LaVoie, who tells us "timing is paramount for private equity players" to "capitalize on the unprecedented real estate opportunities in today's depressed market."

It's an advertisement.

Niche Focus Group currently has three Westward Fund press releases running on Business Wire: Canadian Snowbirds Flock to U.S. for More Than Just Fun in the Sun! (the one running as a "story" in the Sierra Vista Herald), Private Equity Heading West, and Foreigners Want Their Piece of the American Dream.

So who is the Westward Fund? According to the press release and the company's Web site, LaVoie is president of Equity Capital Group, which is owned by Stephen A. Kohner. According to a company brochure, Equity Capital Group is the registered "doing business as" name of SAK Financial LLC, a mortgage bank licensed by the Arizona Department of Financial Institutions in 2007.

The Westward Fund promises investors "a 9.68 percent preferred return on their investment" and the "security of being 'last in and first out.' "

"Between 60 and 90 percent of real estate purchases will be wholesaled upon reaching an acceptable level of value," the company promises. "The proceeds from this sale will then be reinvested to acquire more real estate, a process which can occur as many as three times per year over the course of five years. This turning of quick and moderate profits has a multiplier effect on the creation of investor wealth. Investors will then receive cash distributions until 100 percent of their capital contribution is returned."

My guess is that investors who are trying to "claw back" the money they lost with Bernie Madoff would not be the least bit reassured by that language -- or Westward Fund's predilection for dropping names like Warren Buffet who have nothing to do with the company.

Wow Matt, that's some great investigative work.

It does stink -- to high heaven.

Will a representative of the Sierra Vista Herald please step forward?

<abbr></abbr><abbr>Marty Boardman´s last blog post..Big Bad Banks and the Government that Enabled Them</abbr>

God, I love the internet.

<abbr></abbr><abbr>ShortSaleBlogger´s last blog post..Fannie Mae Propping Up Home Values 125% at a Time</abbr>

You've made an interesting observation. But the posts on Realtor.com get even worse. I've read countless posts that have a title that relate almost nothing to the body of the article. It is clearly a way to drive traffic to the author's site, without any intention of relating useful information. I wonder if the strategy backfires when the public actually bothers to read the article. This is a case in point. Thanks for your post. You call it straight.

Jay it's great that you thought to question this when you saw it on Realtor.org and investigate the claim about parity between the U.S. and Canadian dollar. When reading something from a trusted source, people often do what you're supposed to do when you go to the movies: turn off your brain, and "suspend disbelief."

Personally, I more disturbed by what the Sierra Vista Herald has done here than Realtor.org. It seems Realtor.org was acting in good faith in publishing its summary of the Herald story.

But maybe they do share some blame. To go back to your original point, "people do read this sort of nonsense and they trust the people reporting it to do their jobs."

There are still several problems with the "corrected" version of the story currently posted on Realtor.org (besides the fact that it's true origin is a press release).

1. The Realtor.org story states that "The Canadian 'Loonie' has enjoyed a relatively favorable exchange rate with the U.S. dollar since late 2007 that makes homes and condos in the U.S. look like a real deal.*

In fact, as your chart demonstrates, the relationship between the U.S. and Canadian dollar has been quite volatile. The two currencies were at rough parity between Sept. 2007 and July 2008, but you would not want to characterize the exchange rate as favorable for the Loonie since the dollar staged a comeback last fall.

2. The Realtor.org story states: "Canadian investment in U.S. real estate more than doubled in one year, from 11 percent in 2007 to 23.5 percent in 2008, making Canada the largest foreign real estate investor in the U.S., according to the National Association of REALTORS."

Now this is a statement that, like the claim that the U.S. and Canadian and dollars are at parity, should raise a flag for a reader who pays attention to what's going on in the world and has not suspended their disbelief. First of all, 23.5 percent OF WHAT? Canada is the largest foreign real estate investor in the U.S.? OK, they are next door to us, but they are a pretty small country. How can that be true?

In fact, Canada in 2007 accounted for 4 percent of the total foreign direct investment position in U.S. Real Estate and Rental/Leasing, behind Australia (14 percent), Germany (13 percent), Japan (10 percent) and the United Kingdom (8 percent).

That's according to a 2008 NAR report, FOREIGN INVESTMENT IN U.S. REAL ESTATE: Current Trends and Historical Perspective. "Foreign investment from Canada has been steadily declining from a high of about $6.7 billion in 2000 to $2.7 billion in 2007," the report noted (see page 7).

The source of the numbers in the Westward Fund press release seems to be the 2008 NAR Profile of International Home Buying Activity. But that report, which is based on surveys of about 4,000 Realtors conducted in May 2008, tracks the countries of origins of international home buyers, not the total dollar investment of each country.

That report shows Canada as the top country of origin for foreign home buyers for the 12 months from May 2007 to May 2008. This is the period Jay's chart shows the Canadian dollar hitting its recent peak against the U.S. dollar.

The report shows the percentage of foreign home buyers coming from Canada more than doubling from 11 percent in NAR's 2007 study to 23.6 percent.

Hence the claim that "Canadian investment in U.S. real estate more than doubled in one year ... to 23.5 percent in 2008." Not exactly what NAR's report said though, is it?

Here's how the same information was worded in the lead sentence of the press release and in the Sierra Vista Herald: "The fact that Canadian investment in U.S. real estate more than doubled in one year, from 11% to 23.5%, makes Canada the largest foreign real estate investor in the U.S."

No attribution of NAR as the source of the numbers (or any clue as to 23.5 percent of WHAT?). So somebody at Realtor.org must have recognized those numbers as NAR's and added that to their version of the story -- without providing further clarification that the numbers referred to the percentage of foreign home buyers coming from Canada in 2007-2008, and not their actual level of investment in 2008.

3. The Realtor.org story quotes Mark Dziedzic, "a former financial planner from Toronto, currently living in Arizona" as saying “When the Loonie hit a $1.10, it created a real buzz for Canadians, not only those looking to buy second homes, but we’re also seeing them buying purely from an investment standpoint.”

As noted above, the quote from Dziedzic originally appeared in an Associated Press story published in 2007.

Seems like best the thing for Realtor.org to do would be to retract the story, "Canadians Seek U.S. Property Bargains."

Matt Carter makes some good points about the way it seems to have been developed, with bits of promotional press releases and recycled quotes. So even if the information is accurate, I think the sourcing is questionable, which damages our credibility. We have decided to take the story down.

Thanks,

Brian Summerfield
Online Editor
REALTOR® Magazine

That story must have been from 1.5 years ago because that is the last time it was at par. I'm Canadian and I know that when it is at par I like to travel to the US but it kills our economy because the US is our major trading partner and you don't buy as much manufactured goods when they cost a lot more.

<abbr></abbr><abbr>Halifax Real Estate´s last blog post..HAPPY CANADA HALIFAX!!! Canada Day Events in Halifax</abbr>

A note to Brian. In journalism school they teach us to "consider the source." Matt has very clearly pointed out the source flaws in this story. But there is another way this mantra applies to REALTOR® Magazine. And as a reader/member who expects you to bring me stories of value, I would like to point this out for future news collecting.

The story we are discussing came from the Sierra Vista Herald. If you've never heard of Sierra Vista, AZ, don't feel bad. Many people haven't. In fact the newspaper's circulation is roughly 10,000. While it's a lovely town in extreme SE Arizona, it is not a hotbed for international real estate news. If the subject of an article is Sierra Vista real estate or Sierra Vista anything, they are probably the best source for that. But they weren't the best source for a lazy story on the international real estate market.

Brian, we need you and your staff to do a little filtering. There is a journalistic hierarchy that tells us how much validity a story is likely to have based on where it came from. Before everyone writes back on that, I understand that even the biggies should be eyed cautiously and, given our millisecond-long news cycle, are prone to errors. But the Sierra Vista Herald should probably not make it to your web site unless they have a strong Sierra Vista story that would benefit the rest of us (this we've gone over, so I'll leave alone).

Jay, thank you for bringing this up. I think Matt has given us some great insights. And I think Brian wants to serve his membership well. My guess is this exchange will make for more careful news providers and more careful news receivers.

It is so funny, I am glad that you had the real facts on this. This is just another typical scenario where the media is the shepard and people are the sheep. People follow and eat up what ever the media has to say with out doing the real research on the subject and finding out the real facts. How many opportunities have I missed out on by listening to the media? I would hate to know. I think a lot of people can say that. Thanks for the input.

<abbr></abbr><abbr>Brewer Caldwell´s last blog post..Brewer Caldwell is the BEST</abbr>

I'm continually amazed at the skewed view we get from our professional organizations. Blogs like this one at least provide alternative perspectives. Thank you.

<abbr></abbr><abbr>Petra Norris´s last blog post..Lakeland Entertainment – First Friday, 4th July Local Events</abbr>

I'm constantly amazed at the things we hear from our professional organizations. At least sites like this one provide alternative perspectives. Thank you.

<abbr></abbr><abbr>Petra Norris´s last blog post..Lakeland Entertainment – First Friday, 4th July Local Events</abbr>

I'm finding it very difficult to watch the major news channels these days for the same reasons. It's becoming hard to believe much of the reporting and statistical reports.

<abbr></abbr><abbr>Brad´s last blog post..Interesting Home Value Numbers</abbr>

Personally it has been some time since I have felt like you could truly give any credit to the main stream media. There was a gentleman, and I use the term loosly, who worked for the Washington Post or the New York Times that got popped for making up stories that were put into print.

The main stream media sold out long ago. They just post articles that increase their readership. I doubt if anyone in upper management cares at all about what goes into the paper as long as they don't get caught.

<abbr></abbr><abbr>James Wheelock´s last blog post..Kingwood Homes For Sale 200000 To 250000</abbr>

This is a good example of the good and bad of the age we live in.
First the bad: because so many people are publishing 'news' that even all the 24 hour tv news channels have run into poor and inaccurate reporting.

But the good is that we are more informed now with information and can verify stories from second and third sources.

<abbr></abbr><abbr>Chris´s last blog post..Morgage Refinance calculator break even analysis</abbr>

I’m constantly amazed at the things we hear from our professional organizations. At least sites like this one provide alternative perspectives. Thank you.

You really have to look at the source of information that comes across the internet.

I guess about our best judge for the status of the real estate market is our own pocket books!

<abbr></abbr><abbr>Brad´s last blog post..Bakersfield, CA Median Home Values</abbr>

It is a problem as well in Turkey nowadays. Most popular mainstream online newspapers don't double check what they publish. It is easy to publish in your blog something like "A Turkish Rival for Google is coming" and voila! It can easily be grabbed as a news for many online newspapers. Sad but true.

I am a firm believer in that you cant always trust what you read in mainstream media. You need to take the fact from multiple sources before you jump to any conclusion.