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Mr. Conine apparently is not reading the same Wall Street Journal I read. In his piece, “Don't Believe Everything You Read in the Papers,” he says the WSJ editorial page “and even...its news coverage” have “launched a steady barrage of attacks against the industry.” He goes on to say that WSJ has asserted “housing is the next big financial bubble that will burst” and “prices are headed for a big fall.”

I am the beat reporter for housing at the newspaper. While I can't speak for the WSJ editorial page, which is operated independently, his assertions are not correct when it comes to the news department. In my last major story on the subject, for example, I noted that despite signs the housing market may be cooling in some areas, a sharp decline in prices is exceedingly unlikely. “While a nationwide bust is possible,” I wrote, “it would probably require a market that is far more inflated across all parts of the country, coupled with far greater job losses or dramatically higher interest rates.” A more plausible scenario, I wrote, would be one in which “some areas continue growing modestly while other markets slowly deflate, rather than pop. That's because unlike stockholders, home owners don't normally panic and run for the exits when trouble strikes. After all, they have to live somewhere.” Interestingly, this appears to be exactly what is happening, with some weakness seen recently in places like Denver and Dallas, but continued strong growth in other markets. This story ran on the front page of the newspaper.

In numerous stories over the past two years, I’ve highlighted the many positive aspects of the housing market, as well as its deep sources of strength. In “The New Demographics: Looming Need For Housing a Big Surprise,” I explained how the recent surge in immigration is providing an important source of new demand for home sales. In “Housing Sector Averts Recession in Many Cities,” I explained how robust housing activity was playing a critical role keeping many cities from falling into an economic morass. In “Housing Boom Softens Stock Blow,” I explained how rising home prices have helped offset the steep losses many families experienced when the stock market collapsed. And just last week (March 26), in “Home Buyers Seem Undeterred by the War,” I explained how low interest rates and other factors are helping housing remain robust in the face of war with Iraq.

My colleagues in WSJ’s news department have made similar efforts to present a fair portrait of the housing market. In a story about a recent sharp drop in new home sales, for example, a fellow reporter wrote: “With mortgage rates at record lows, individuals seeking alternative investments to stocks, and new homes being built at roughly the same rate new households are being formed, demand for new homes will probably remain firm.” Indeed, much of the positive information Mr. Conine cited in his story — including elements of Alan Greenspan’s commentary on the housing market — were originally reported in our paper.

All of this does not mean we will not write stories that explore the possibility that housing will fail to maintain its recent pace. We would be negligent if we did not scrupulously report the possible risk factors that exist in the marketplace. But as our stories have shown, we are not oblivious to the many sources of strength in the market, and we are not out to “attack” housing. After all, many of our reporters and editors are home owners, too! We look forward to working with Mr. Conine and the many members of NAHB to make sure our stories are as fair and accurate as possible.

Patrick Barta
Staff Reporter, The Wall Street Journal

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