Nice headline right?
If you thought you’ve seen it before, than you must have seen the Front Page of Tuesday’s Globe and Mail. The Sub-heading mentions an 11 per cent decline in prices and a 44 per cent drop in Ontario housing sales in large RED print, based on the December 15th press release issued by the Canadian Real Estate Association.
The most important part of the article is at the bottom.
CORRECTION: “The national average resale home price did not fall by 20 per cent after the onset of the last recession in the early 1990s. After a retreat in 1990, the national price rebounded for a few years and then fluctuated. Incorrect information was published Tuesday.”
Don’t you love it when the media exaggerates to sell newspapers and advertisements? Reminds me of a quote “Numbers don’t lie, people do”. I wonder why they did not put the correction on the front page with a BIG BOLD Heading.
I would like to share with you a story told by Michael Polzler from Re/Max that really hits the bulleye with what the media can do.
It is of a hot dog vendor in Chicago who sold the very best hot dogs by the side of the road. His business was booming, people loved his hot dogs, and his business steadily increases month after month. The man loved his business and believed in the need to provide great food at a great price.
This man was so busy advertising and selling his hot dogs and making lots of money, that he didn’t even have time to read the newspaper or listen to the radio. Consequently, he never heard a word about a predicted recession or the need to cut back to save for the potential economic slowdown. As long as he continued to offer his delicious hot dogs, his customers bought them. He kept selling, and they kept buying.
Then one day his college educated son told him that an economic recession was surely coming. His son told him that people wouldn’t have enough money to buy his hot dogs. The successful hot dog vendor believed this, so on his son’s advice, he cut back on his advertising. Additionally, he started ordering less supplies and product, because after all, people would be cutting back soon.
He even went so far as to take down many of the billboards that lead to his roadside stand. And sure enough, people stopped coming to him. People stopped buying his hot dogs, and he eventually went broke.
Then he thought to himself. “How smart my son is in predicting this.”
The lesson is to not be influenced by what you read in the newspapers or hear on your television. It’s true that market conditions have changed, but human nature has not. Real estate is one of the largest investments people will make in their lifetime. It is also one of the safest. Get out and spread the word. If you bought a home in 1980 worth $67,000, that property is valued at over $300,000 today – an increase of 350 per cent and the profit is capital gains exempt. It’s no wonder that Canada has one of the highest home ownership rates in the world, at close to 70 per cent.
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