The current issue of BusinessWeek conceded what the Free Market Project has said all along: fears of the "housing bubble" and its imminent burst have long been overblown.
"No one can predict with certainty which way home prices will go in the next year or so. Over the past several years almost everyone who has tried to forecast the direction of the housing market has been wrong," noted the April 10 edition.
Yet BusinessWeek and other media outlets have been forecasting a bursting bubble for five years, according to a study by the Free Market Project.
As FMP recorded in its Nov. 30, 2005, Media Myth, a Sept. 3, 2001, BusinessWeek editorial "warned about a ‘double bubble’ and told its readers, ‘A housing bubble may be developing — right behind the Nasdaq bubble.’"
The same day, "Forbes magazine warned its readers about the consequences of home equity values starting ‘to wobble,’ while stating, ‘There are ominous signs that this is about to happen.’"
As the economy has steadily improved over the past few years, the media’s coverage has skewed towards pessimism, portraying the economy’s growth as fragile and tied tightly to success in the real estate sector.
On the April 3, 2006, "American Morning," CNN’s Miles O’Brien quipped, "God bless the bubble," reacting to a report showing a 14-percent gain in real estate stocks as the S&P 500 index achieved its best first quarter in seven years.
Yet the S&P also reported that most sectors of the market grew, with telecommunications, transportation, and technology growing by double digits while energy, commercial services, and capital goods grew by more than 7.5 percent.
[cross-posted to FreeMarketProject.org]