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July 29, 2009

Widget Underprices for Third Straight Time

On the heels of yesterday's discussion about the price widget prediction falling short for the second time, a reader sent us a third data point. Once again, the average appraisal fell far short of the selling price. After being listed for $899,000, 29 Maple Street received an average prediction of $727,425 from readers; the house closed for $830,00 on July 6, 2009. Maybe the fact that the average prediction is, thus far, falling so far of the sales price makes perfect sense. After all, the seller only needs one good buyer, and anyone putting in a bid is probably going to like the house more than the average reader. In this case, it looks like somewhere around 20 to 25 percent of the votes cast were at or above the actual sales price. Maybe we should switch to using the median and noting the three quartile break-points. Could it be that the top quartile is really the predictive number? We'll wait for a few more data points before overhauling but it's certainly feeling like that may be the more useful way to parse the data.
House of the Day: 29 Maple Street [Brownstoner]
29 Maple Street [Brown Harris Stevens] GMAP P*Shark
Bearish Brownstoners Miss Mark on 2nd Street Sale [Brownstoner]

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Comments

If more people voted then the widget would get closed to being valid. Problem is sample size not the widget.

Posted by: Gross at July 29, 2009 9:08 AM

I would say 180 sample size is a pretty good one for this widget.

Posted by: Kensingtonian at July 29, 2009 9:11 AM

If I'm not mistaken, thirty data points are needed before you can make a case for any statistical significance in a study like widget vs. closing price. For all we know so far, these three cases might be complete outliers.

Posted by: sixyearsandcounting at July 29, 2009 9:13 AM

I still think this pattern is to be expected. We are likely to see the biggest discrepancies between widget estimate and actual sales price in the first few properties. Those properties that sit on the market for longer will be more likely to see asking price cuts and come closer to the widget price.
Also, using the median would be more correct but I don't think it would give a substantially different estimate - probably slightly lower in most cases.

Posted by: etson at July 29, 2009 9:14 AM

Kensingtonian, when people say 30 data points gives you a normal distribution, is that simply convention/convenience, or is there some mathematical reason behind it?

Of course if we're looking at longer-term trends (rather than just a correlation of widget v. price), we would need a much larger sample size.

Posted by: sixyearsandcounting at July 29, 2009 9:18 AM

Problem is actually some people are bidding on what they hope it is worth, not what they think it is actually worth.

Case in point - Someone Bid $561K, while many bids appear to be at or around $600K. This does not speak to realistic valuation, merely fantasy. To be fair there are a few bids in the 1Mil range, but far more are concentrated in the unrealistically low territory.

Posted by: newsouthsloper at July 29, 2009 9:18 AM

Newsouthsloper, those bids in the $1M range are probably also cases of people bidding on what they hope it is worth, i.e. brokers and neighbors.

Posted by: sixyearsandcounting at July 29, 2009 9:22 AM

I bid according to what I think it's worth... but usually (though not always) the widget doesn't let me go low enough.

I like the fact that the widget is guessing low. That suggests that perhaps folks are resetting their thinking a bit about the absurdity that is Brooklyn real estate. Honestly, the market is still wildly overinflated (and probably simply because of the lack of supply right now) and clearly unsustainable.

The widget reads $727k and the property sold for $830k... I truly believe this is just a stupid buyer that is still out of touch with reality. $727,000 or probably far lower is much more appropriate.

Posted by: tybur6 at July 29, 2009 9:26 AM

Agree Six Years,but it is obvious that the outliers on the high side are far fewer in number than those on the low side.

Posted by: newsouthsloper at July 29, 2009 9:27 AM

The widget strikes me as more of a game than as data worth parsing.

Posted by: southbrooklyn at July 29, 2009 9:27 AM

I think median and quartile points would be much more useful -- after all if 25% of a decent sample is pricing close to ask, then it is much more likely to be indicative of one actual buyer at the point.

OTOH, it would seem that these three sales are also of houses that -- at least according to the comments -- showed well. This may be data that houses with little work needed will move at close to ask (which is usually 10-20% below peak asks) or with due speed, but that for those houses which need more work, it will stay/has stayed on the market longer and its ask more likely will come down.

Posted by: Boerumresident at July 29, 2009 9:29 AM

Statistical significance is not merely a function of sample size. There are tests you run on data to determine whether the results are significant. The sample size needed to establish significance will vary depending upon the consistency and strength of the data. The more consistent and powerful the results are, the fewer data points you need to establish significance.

That said, Mr. B, if you go back through last week's widget thread, you will find that some commenters posted additional data points, all of which point in the same direction.

Posted by: slopefarm at July 29, 2009 9:31 AM

I don't think the top quartile would be predictive., but the top percentile should be, assuming it's not from a troll but from someone who is serious about what they'd be willing to pay. I know when I sell my house it will be to the person whose offer is in the 99th percentile. I'd be kinda stupid otherwise.

Posted by: Sparafucile at July 29, 2009 9:32 AM

Those who live in the neighborhood bid much higher than it's worth, those who don't bid lower than they think it's worth. There's moral hazard with it in respect to increasing your own neighborhood's price.

Posted by: diego at July 29, 2009 9:36 AM

A median is generally the way to go when there is the possibility of great unequal distribution. Generally household income is looked at using the median due to this reason.

If using the mean, taking a look at the standard deviation might help to get a feel for the margin of error.

Although the widget is highly unscientific to begin with, one glaring problem is the inclusion of the asking price in the HOTD posts. Obviously this is information necessary in the interests of the blog but it automatically skews the data.

Posted by: WrathOfGates at July 29, 2009 9:37 AM

To continue yesterdays discussion, Miss Muffet is just convinced that high prices are immoral. While this may be true, it has no bearing on the market.

Posted by: mopar at July 29, 2009 9:37 AM

"Widget Underprices for Third Straight Time"

No, buyer overprices for Third Straight Time (Widget overprices too). Seller would never buy back at same price. He/she took money and ran (hat off - more should do same before too late).

***Bid half off peak comps***

Posted by: Brownstones Half Off at July 29, 2009 9:48 AM

IMHO, for the widget to be effective, the average guess and the graph should be hidden while people are voting and only revealed the morning after. Otherwise we have the anchoring bias at work. According to Tversky and Kahnemann:

"In many situations, people make estimates by starting from an initial value that is adjusted to yield the final answer. The initial value, or starting point, may be suggested by the formulation of the problem, or it may be the result of a partial computation. In either case, adjustments are typically insufficient That is, different starting points yield different estimates, which are biased toward the initial values. We call this phenomenon anchoring."

Since the listing price is there, the game is essentially who can get the right discount (as opposed to the situations where the guesses would be both below and above the target). A few early "overdiscounters", and you've got your anchor.

Posted by: kensingtonka at July 29, 2009 9:49 AM

Widgets don't underprice properties, Bears that don't know the market do.

Posted by: daveinbedstuy at July 29, 2009 9:50 AM

Yeah, it's not the market speaking, it's just three stupid buyers.

We'll all be better off if we stop pretending that the widget carries any significance at all.

Posted by: Lothar of the Clinton Hill People at July 29, 2009 9:57 AM

I found the perfect book for the bulls!
www.amazon.com/Statistics-Dummies.../dp/0764554239

Posted by: brickoven at July 29, 2009 9:58 AM

BO- did you do your homework?

BHO- you got all your bases covered. if a low price comes in, you screech Hooray. if a price comes higher than expected, it's off market. beautiful.

Posted by: antidope at July 29, 2009 9:59 AM

"Widgets don't underprice properties, Bears that don't know the market do." - coming from the ghetto money manager who comes out with statements such as this:

No problems in nyc housing...Because we are NOT in a recession. Prices of commodities have started to drop. The S&P 500 is only off 15% YTD. Mortgage rates are no where near any highs seen over the past 30 years.

Posted by: daveinbedstuy at July 28, 2008 12:44 PM

Posted by: cornerbodega at July 29, 2009 10:08 AM

For all of you dopes who cashed out more on youre house then it is worth dont feel too bad. The largest office landlord in NYC is with you. SLG puts look real cheap!
http://www.globest.com/news/1462_1462/newyork/180101-1.html

Posted by: brickoven at July 29, 2009 10:14 AM

" 'Widget Underprices for Third Straight Time'
No, buyer overprices for Third Straight Time"

"Yeah, it's not the market speaking, it's just three stupid buyers"

How could these prices be anything other than "the market"? Isn't a house,or anything else, "worth" whatever price a willing buyer and seller agree on--anything else is fantasy.

People thought I was stupid when I paid a 5 figure price for my house in 1974. Such subjective judgments may, or may not, be true, but they're irrelevant in terms of the market and actual worth ["value" is another matter, but that's entirely subjective.

Posted by: Bob Marvin at July 29, 2009 10:19 AM

This is a case of two mostly distinct, only slightly-overlapping demographics: the people using the price widget are brownstoner readers, whereas the people making real offers and attempting the purchase of the specific piece of property are a whole other demographic. (insert Venn diagram here.)

Sure, some brownstoner readers are seriously buying property. But most are just reading and thinking about stuff in the hypothetical. The people who actually determine the purchase price have cash in hand and are making real offers for the specific property in question. These two groups of people have very different motivations -- which is what newsouthsloper effectively pointed out.

Posted by: shovel lover at July 29, 2009 10:23 AM

"People thought I was stupid when I paid a 5 figure price for my house in 1974. "

You was stupid relative to 1974. This funny thing is no one understands inflation and the psychology of asset prices.

http://financialjoyride.blogspot.com/2009/05/us-dollar-purchasing-power-in-20th.html

US dollar has lost 94% of its value over the past 76 years.

Please and get a understanding about the debasement of your money.

The goal now is to prevent DEFLATION! That's why all this "Money" is being pumped into the system and this Fall is going to be very very painful, like 12 Ft I-Beam painful!

The What (Dave STFU)

Someday this war is gonna end...

Posted by: Return of The What at July 29, 2009 10:28 AM

If, as tybur6 is doing, you are putting in a number as to what you would like it to be worth (as much as I am sympathetic to your cause tybur) it will be off the mark as a predictive tool for what a house will sell for. I always guess what I think it will sell for, which is I believe the point of this exercise. Putting in a number other than what you think it will sell for is an ideological act that throws off the predictive value of the widget.

Posted by: wasder at July 29, 2009 10:29 AM

We only have 3 observations of widget pricing accuracy.

Since we have no idea how the population of widget pricing accuracy will be distributed, we can't really say anything meaningful from these 3 observations. Once we get to a bigger sample size, we can say more about the distribution of sample means, and that will give us a way to test widget pricing accuracy.

But you might not need to go that far.

It's pretty well established that online polls are full of sampling error. I think the biggest sampling error here is that lots of people have an agenda. People aren't neutrally appraising these properties...

Posted by: theandrewlee at July 29, 2009 10:30 AM

"Yeah, it's not the market speaking, it's just three stupid buyers."

No, it IS the market speaking. The sucker's market. Suckers are so because they've done something stupid. Overpaid.

"BHO- you got all your bases covered. if a low price comes in, you screech Hooray."

I screech 'reality'. More lower prices closing than high.

"if a price comes higher than expected, it's off market. beautiful."

Oh no, I didn't say off market. It's very much ON sucker's market.

"People thought I was stupid when I paid a 5 figure price for my house in 1974. Such subjective judgments may, or may not, be true, but they're irrelevant in terms of the market and actual worth ["value" is another matter, but that's entirely subjective."

Huh? What exactly is your message and how is it supposed to aid people in deciding whether or not to buy?

***Bid half off peak comps***

Posted by: Brownstones Half Off at July 29, 2009 10:31 AM

"People thought I was stupid when I paid a 5 figure price for my house in 1974. "

You was stupid relative to 1974. This funny thing is no one understands inflation and the psychology of asset prices.

Posted by: Return of The What at July 29, 2009 10:28 AM

AND WHAT'S IT WORTH NOW BOB?????

Posted by: daveinbedstuy at July 29, 2009 10:32 AM

"AND WHAT'S IT WORTH NOW BOB?????"

A bit more than I paid Dave :-)

As to whether it was "stupid" back then; I was relying on Everett Ortner's "schoolteachers coup" whereby two schoolteachers (or,in our case, a civil servant and a schoolteacher) could buy an otherwise unwanted old city house and live "like millionaires" on very little money. This worked out, for us, to be true, in a subjective sense, from day one and to be literally true today. Hardly stupid.

Posted by: Bob Marvin at July 29, 2009 10:44 AM

People do not take the widget seriously.

If everyone who voted threw in a dollar and the voter who came closest to the final price won the pot then we would see "Average Reader Appraisals" very close to closing prices.

Posted by: MR at July 29, 2009 10:48 AM

"how is it [my "message"]supposed to aid people in deciding whether or not to buy?"

Sorry half off, it's not.

I miss the "good old days" when no one wanted old city houses and they sold for an enormous discount compared to tacky suburban tract houses. I even sympathize with your desire for brownstone prices to drop substantially. However, at any given time houses, and everything else are "worth" what they actually sell for. I'm neither a bull nor a bear and lack a crystal ball. You'll have to decide for yourself whether or not to buy. I personally couldn't begin to afford today's house prices, but that too is irrelevant.

Posted by: Bob Marvin at July 29, 2009 10:52 AM

AND WHAT'S IT WORTH NOW BOB?????

Posted by: jackassinbedstuy at July 29, 2009 10:32 AM

GAS WHAT'S IT WORTH NOW BOB?????

FOOD WHAT'S IT WORTH NOW BOB?????

CLOTHING WHAT'S IT WORTH NOW BOB?????

ENERGY COSTS WHAT'S IT WORTH NOW BOB?????

INFLATION WHAT'S IT WORTH NOW BOB?????

The What

Someday this war is gonna end...

Posted by: Return of The What at July 29, 2009 10:54 AM

A few points, folks:

1. Go back and read last week's widget thread and yesterday's biggest sales thread. We don't have three data points. We have at least 7. Widget 10-25% below sale price in every case. So I guess we've got 7 stupid buyers and no smart ones. Eight, if you count Bob Marvin and the five figures he must have paid for a nice home in the Lefferts Manor 35 years ago. Poor Bob, he's really stuck now.

2. Corner, what and BHO, you can take a chill pill on the widget question as your position is not threatened. The question of the widget's accuracy as a price predictor has no bearing on the direction of the market in the future. The only question is whether the collective wisdom of the brownstoner widgetariat can predict a price at a single point in time. No need to fight this one to the death. It does suggest that some on this site have any itchy trigger finger for those price drops. But if you want to argue that someone overpaid for a house, argue from comps, not the widget. And make sure you know the buyer's time frame -- how long they plan to live in the house -- before you question the investment wisdom of the purchase.

3. Widget may be low because the high bid, not the average, gets the house, but the widget shows an average valuation and therefore does not reflect the high bidder. Quartile discussion illuminates that point. That doesn't mean the high bidder is stupid. Every house gets sold to the high bidder, whether market is rising or falling. A house is not worth the same to everyone who sees it. That's who sets the comps and the market value -- a willing buyer and seller.

Posted by: slopefarm at July 29, 2009 10:54 AM

NYTIMES -

After a plunge lasting three years, houses have finally become cheap enough to lure buyers. That, in turn, is stabilizing prices, generating hope that the real estate market is beginning to recover.

Eight cities, including Chicago, Cleveland, Denver and San Francisco, showed price increases in May, up from four in April and one in March, according to data released Tuesday. Two other cities, Charlotte, N.C., AND NEW YORK, WERE FLAT.

For the first time since early 2007, a composite index of 20 major cities was virtually flat, instead of down.

Posted by: 11217 at July 29, 2009 10:57 AM

The guy over at urbandigs does a good job with his blog, I think. Very insightful commentary. He did a piece the other day on where he sees the final discount from the housing crash. Thing is...and it's something we don't talk about over here on brownstoner...the discount from peak has more to do with the price of the property more than it does the location of the property. According to him, anyway...in which case...most Brooklyn properties will see overall drops of between 15-30% (most of which seems to already have occurred).

***I'll repeat the ranges based on price point that I currently use, now that Armageddon has seemed to be priced out of our market:

HIGH END ($5M+) - down aprox 25% - 40% from peak
HIGH/MIDDLE ($2M - $5M) - down aprox 25% - 30% from peak
MID END ($1M - $2M) - down aprox 20% to 30% from peak
LOWER END (Under $1M) - down aprox 15% - 25% from peak

While in the fear months, trades were occurring closer to the higher end of the above noted ranges, today it seems trades are occurring closer to the lower/middle end of these ranges. The markets way of pricing out fear.

Posted by: 11217 at July 29, 2009 11:02 AM

What,

I understand inflation. My house has gone up about forty-fold in nominal dollar figures, but less than ten-fold when adjusted for inflation. So what? I'm very happy :-)

Posted by: Bob Marvin at July 29, 2009 11:03 AM

"Corner, what and BHO, you can take a chill pill on the widget question as your position is not threatened. "

Slopefarm you're a real Jackass! Take that "fare and balanced" crap somewhere else! Everyone and their mother knows where the market is headed--->DOWN!

"he question of the widget's accuracy as a price predictor has no bearing on the direction of the market in the future. "

No it reflects the Greed and Delusion mentality not the "direction" of Asset prices!

One question-- Did you think interest rates will be 5% in ten years?????? Do you thing China and Japan will continue to fund America's profligate spending lifestyle?! Do you think Peak Energy will have an impact on future Asset prices? That your homework assignment!

The What

Someday this war is gonna end...

Posted by: Return of The What at July 29, 2009 11:04 AM

INFLATION WHAT'S IT WORTH NOW BOB?????

http://research.stlouisfed.org//fred2/data/CPIAUCSL.txt

CPI = 49 in 1974, 212 today, according to BLS.

So Bob, is your house worth more than 4.3 times what you paid for it?

I think the logical conclusion of the what/bho/corner position is that all buyers are stupid at all times. It's the ultimate "bitter renter" position.

Posted by: slopefarm at July 29, 2009 11:04 AM

"I understand inflation. My house has gone up about forty-fold in nominal dollar figures, but less than ten-fold when adjusted for inflation. So what? I'm very happy :-)"

Bob Marvin I'm not hating on you! I believe you are old enough to understand where I'm coming from! When you brought that house the Bank did a full rectum cavity search ti make sure you had the ability to pay that money back! Today with securitization they handed out loans to Jackasses that 1. could not afford the house, 2. had no intention on paying back the money. All of sudden everyone is Donald Trump and now the bill comes due. This is what the retards don't seem to grasp that we are in the first stages of a DEPRESSION and it will take many years to get out of this mess...

The What

Someday this war is gonna end...

Posted by: Return of The What at July 29, 2009 11:10 AM

NYTIMES -

"Some skeptics say they believe the market is merely pausing before it resumes falling and that much of the life in the market is coming from speculators. Even the most enthusiastic analysts acknowledge that rising unemployment, another leap in foreclosures or a significant jump in interest rates could snuff out progress."

Posted by: DitmasSnark at July 29, 2009 11:11 AM

I think they're just bitter in general, slopefarm.

Love your comments lately.

Posted by: 11217 at July 29, 2009 11:11 AM

" It's the ultimate "bitter renter" position."

Thanks.. This is all I need.

The What (MUTE!)

Someday this war is gonna end...

Posted by: Return of The What at July 29, 2009 11:12 AM

"So Bob, is your house worth more than 4.3 times what you paid for it?"

Somewhat more, actually, I bought from a seller who was too cheap to use a broker and was afraid to come from Long Island to that "dangerous" Brooklyn neighborhood He priced his old aunt's house at about half the going rate {so he'd only have to risk his life by showing it once?], so more like 8.6 times.

Not that it really matters--I'm planning on leaving my house to my son who, very likely, will want to live in it. The way house prices are going that's probably the only way he'll ever get a house and no, I don't think that's a good thing, just the sorry reality.

Posted by: Bob Marvin at July 29, 2009 11:14 AM

That is true, Snark.

But I don't consider the outlying "some skeptics" to be where the bulk of the information is gravitating right now.

It's like saying Sarah Palin is the voice of the Republican Party. No. She is the voice of a small portion of the minority party.

No one knows. But the fact that 8 cities (and some of the most populated ones) have stopped dropping means to me that things are starting to improve. There may still be bumps down the road, but in terms of the housing recovery, the worst MAY be over. Housing busts don't last forever.

Posted by: 11217 at July 29, 2009 11:18 AM

"Bob Marvin I'm not hating on you! I believe you are old enough to understand where I'm coming from! When you brought that house the Bank did a full rectum cavity search ti make sure you had the ability to pay that money back!"

Damn straight they did AND they required 40% down. In addition, I could only find one bank that would even give me an application form and bother to access my ability to pay the loan.

I believe that the What HAS correctly accessed the root of our current economic situation and that things MIGHT have worked out as badly as he predicted. Fortunately, things seem to have gone somewhat better, so I wouldn't expect the fall of the world monetary system just yet. Things are very bad, but they're no where near as bad as they might have become. We're very lucky to have dodged the bullet this time.

Posted by: Bob Marvin at July 29, 2009 11:24 AM

Those poor "bitter renters" and "suicidal buyers". Two sides of the same coin.

Posted by: dittoburg at July 29, 2009 11:26 AM

barely skimmed the posts, so maybe this is covered already:

Inputs to the widget reflect what people want the price to be, not what they think the market value is. Full stop. Nothing else to debate here.

I basically ignore the widget and think I may have put something into it once.

Posted by: lechacal at July 29, 2009 11:26 AM

> I don't consider the outlying "some skeptics" to be where the bulk of the
> information is gravitating right now.

And before the economy crashed, did you consider the voices of the skeptics who said the economy was heading for a crash?

Posted by: DitmasSnark at July 29, 2009 11:30 AM

"hings are very bad, but they're no where near as bad as they might have become. We're very lucky to have dodged the bullet this time."

Yeah but there are Ticking Nuclear Warheads all around you just be quiet you can hear them..

The What (Tick.. Tick.. Tick..)

Someday this war is gonna end..

Posted by: Return of The What at July 29, 2009 11:32 AM

Re-doing the widget may help. Problem is anyone can post a crazy high or low number without having information on relative values. Buyers looks a dozens of properties and make a calculation part personal and part business. Most of us putting in numbers here have no daily idea of market and are guessing. It appears many of us throw in low low numbers for real estate political reasons.

Posted by: chrishavens at July 29, 2009 11:32 AM

FYI, Brian Lehrer show is discussing this issue right now. One interesting point re: the NYT article is that the index does not include apartments which skews it quite a bit. Also, the point was made that all real estate is local so what happens nationally does impact NYC (since we are subject to national forces i.e. bad economy) but each market may have a different timing i.e. peak nationally was 2006 whereas here it was 2008...

Posted by: Miss Muffett at July 29, 2009 11:34 AM

Brian Lehrer is discussing the widget? Has he made any comment about the What?

Posted by: dittoburg at July 29, 2009 11:38 AM

People buying houses in brownstone Brooklyn will probably have a profit on their hands in as little as 3-5 years.

Discuss.

Intelligently. That leaves some of you out of the discussion.

Posted by: daveinbedstuy at July 29, 2009 11:38 AM

11217 Noah from urbandigs is a former daytrader turned real estate broker. You sure you want to use his predictions?

Posted by: brickoven at July 29, 2009 11:41 AM

I'd rather use his than yours brick. I take everything with a grain of salt, but he does some good in-depth analysis. It's a lot more than I can say for you.

Your comments here are nothing but nonsense.

Posted by: 11217 at July 29, 2009 11:43 AM

> FYI, Brian Lehrer show is discussing this issue right now.

Thanks for the heads-up. Listening to that now.

Posted by: DitmasSnark at July 29, 2009 11:43 AM

July 29 (Bloomberg) -- Orders for U.S. durable goods, excluding automobiles and aircraft, unexpectedly rose in June, signaling manufacturing may expand in the second half of the year.

http://www.bloomberg.com/apps/news?pid=20601087&sid=awn_Wo4uqoDI

Posted by: 11217 at July 29, 2009 11:46 AM

brickoven, I'm team bear, but Noah is even-keeled and has always been reasonable and logical in his predictions and comments. Read his blog, going back a year, there's plenty of comments about sellers overpricing and that this current uptick may not be long term.

Posted by: dittoburg at July 29, 2009 11:48 AM

Sorry, I didn't mean Brian Lehrer was discussing the widget but rather the news about national housing market and how it applies to NYC, discussed on this thread. One main point was many think NYC still has further to go down since it didn't start to go down until very late in the game. Point was also made that sellers who do best price very competitively to stir interest (though this was also about the NY metro area, and not just NYC per se).

Posted by: Miss Muffett at July 29, 2009 11:48 AM

11217 the inventory numbers on that website have no credibilty. I dont know why he leaves that up.

Posted by: brickoven at July 29, 2009 11:51 AM

I was pulling your leg

Posted by: dittoburg at July 29, 2009 11:51 AM

Commercial RE will take a severe nosedive and fail a lot of banks. This will be the 2nd phase of the crash and will dwarf that of housing. Ignore at your peril (like DOW8000SP800).

Skyrocketing risk (see today's thread about communal living or whatever they call it - the banks are putting on parachute packs) will launch interest rates to the moon, compounding and overshooting (below equilibrium) the crash already underway.

The herd mentality of 11217 and slopefarm is ASTOUNDING! They remind me of AMWAY/MLM junkies.

Out.

***Bid half off peak comps***

Posted by: Brownstones Half Off at July 29, 2009 11:56 AM

"People buying houses in brownstone Brooklyn will probably have a profit on their hands in as little as 3-5 years.

Discuss."

price/income. If you still haven't come to the realization that the price/income went bonkers due to the speculative bubble then you're truly an idiot of epic proportions. Then again, you did say there was no recession.

Posted by: cornerbodega at July 29, 2009 12:06 PM

I love how this board thinks every closed sale is just "one stupid person." The market is defined by what the highest bidder will pay for each and every property.....I guess it is just made up of a collection of stupid people.
Interpreting the general tone of the commenters of this blog, of course the widget is going to be lower than the selling price, on average.

Posted by: Brokedeveloper at July 29, 2009 12:06 PM

Herd mentality? What herd? What position have I adopted, other than to point out logic flaws in statements you and your alter ego have made? Where is my post where I predict a direction for the economy or housing market?

Posted by: slopefarm at July 29, 2009 12:07 PM

cornerbodega, when will you ever realize that for most people, a real estate purchase is a "home" not an investment property. There are many things you get by owning that you do not by renting. Please tell me you understand the difference.

Posted by: daveinbedstuy at July 29, 2009 12:10 PM

"People buying houses in brownstone Brooklyn will probably have a profit on their hands in as little as 3-5 years".

Very likely true IMO, but also[sorry Dave] indicative of the mind set that sees houses mainly as investments, which is what got us into trouble in the first place. Houses are basically things to LIVE in.If their value appreciates, great; if not, you needed a place to live in anyway.

Posted by: Bob Marvin at July 29, 2009 12:13 PM

Team Bear just chill and relax. Things are going to get real hairy in the next couple of weeks. let the retards rejoice "The recession is over" because that's the start of The Great Depression 2......

The What

Someday this war is gonna end..

Posted by: Return of The What at July 29, 2009 12:14 PM

BHO:

Something you don't seem to understand. If we were to take a poll of people on here and see who's opinion they value more...yours or Slopefarm. I'm fairly certain it would be a landslide. And by landslide, I mean, the only people who would vote for you would be What, Brickoven and Cornerbodega. All or most of which are the same person.

You've lost everyone's attention here.

Posted by: 11217 at July 29, 2009 12:15 PM

11217 what if BHO is one of us also? What if we are all Free Masons? You are a crazy person!

Posted by: brickoven at July 29, 2009 12:30 PM

People like 11217 getting all excited over3 widgets on a blog vs the actual #s? Schiller, rebny, even prudential elliman (-28% manhattan avg 2q yoy)...

Posted by: cornerbodega at July 29, 2009 12:34 PM

So far it's 7, cornerbodega.

I don't care about the widget at all.

It's a game.

Posted by: 11217 at July 29, 2009 12:36 PM

Wait a minute! This began as a discussion of whether the widget is off or commenters are too pessimistic on current home values, and now we're into freemasonry and I'm being accused of bull market herd mentality? My original point stands -- the widget accuracy debate does not implicate the bull-bear debate and there is no need to get worked up about it, no matter how emotionally invested in your bear or bull positions you might be. Anyone want to break free from that herd?

Posted by: slopefarm at July 29, 2009 12:39 PM

dittoburg
I use to like that website, however the inventory numbers have no credibity and he leaves it up. Its been that way for way too long, kind of stupid

Posted by: brickoven at July 29, 2009 12:40 PM

Slopefarm is right that the widget accuracy has nothing to do with home values. IMO, it's off because there's nothing to stop people from assigning frivolous values. In a VERY large sample that might not matter, but the Brownstoner universe is far too small for the widget to be good for anything other than entertainment.

Posted by: Bob Marvin at July 29, 2009 1:03 PM

I agree that the widget is not very meaningful, just a mildly amusing game.

Posted by: Miss Muffett at July 29, 2009 1:06 PM

"Brian Lehrer is discussing the widget? Has he made any comment about the What?"

ROFL, dh!

Posted by: CarrollGardened at July 29, 2009 1:19 PM

Re: Herd mentality.

11217: Because you fall for the false glimmers of hope in hyped up, short term, unsustainable month-to-month pluses in Case-Shiller.

sloperfarm: Because you think renters are now bitter, overused and untimely sheepfeed. We're only bitter because we'll have to move again when we can up our square footage and location for the same price next year.

***Bid half off peak comps***

Posted by: Brownstones Half Off at July 29, 2009 1:41 PM

I'll be glad when I've paid off my mortgage and will be living rent free in my later years. I suffer from a delusional herd mentality.

Posted by: daveinbedstuy at July 29, 2009 1:45 PM

"We're only bitter because we'll have to move again when we can up our square footage"

Guess you haven't learned that bigger is not always better yet.

Moving in NYC is one of the absolute WORST experiences in the world. Not to mention expensive, if you don't do it yourself.

Oh, and what Dave said at 1:45.

Posted by: 11217 at July 29, 2009 1:58 PM

"We're only bitter because we'll have to move again when we can up our square footage and location for the same price next year."

Why would this make you bitter? Sounds like a good deal to me.

Got to come to slopefarm's defense on the herd mentality thing. If there is anybody who is NOT of the herd mentality it is slopefarm, who is one of the most nuanced thinkers on this site and not prone to falling in with any crowd. Never heard him say anything disparaging about renters either.

Posted by: wasder at July 29, 2009 2:14 PM

BHO,

I use the term "bitter renter" facetiously. But when Bob Marvin is accused of making a purchase that was "stupid in 1974" despite returns that obviously outpaced any measure of cost of living, and when every purchaser above the widget price is "stupid", it seems as if you, what, corner et al cannot ever imagine that buying a house could ever be an acceptable choice. Whether you own or rent, you are certainly clinging bitterly to your position, so much so that you are threatened by data that does not even undermine it but might be misconstrued by others to do so.

Posted by: slopefarm at July 29, 2009 2:15 PM

What Bob Marvin said at 10:19.

Posted by: mopar at July 29, 2009 2:18 PM

slope--there in lies the weakness in BHO's entire presentation/ideology--the defensiveness with which he approaches any piece of data that does not march in lockstep with his self-aggrandizing vision.

Posted by: wasder at July 29, 2009 2:20 PM

"People buying houses in brownstone Brooklyn will probably have a profit on their hands in as little as 3-5 years. Discuss."

People buying at current prices (ie 20% or so off peak)? Sure, possible, depending on whether interest rates spike (if they do I say no way, so this is basically a bet that interest rates will stay where they are). But your prediction is terribly fuzzy. The only hard prediction in "in as little as 3-5 years" is that they won't turn a profit in less than 3 years. Would you be willing to delete "as little as?"

Posted by: lechacal at July 29, 2009 2:22 PM

lechacal, I would agree that a profit will be difficult in less than three years. That's too short term to predict anything like this.

Posted by: daveinbedstuy at July 29, 2009 2:33 PM

"I'll be glad when I've paid off my mortgage and will be living rent free in my later years."

Not rent free, DIBS, unless you recover downpayment and net expenses divided by total months of ownership, all in 2007 dollars or whenever you bought it.

"Moving in NYC is one of the absolute WORST experiences in the world."

Hence bitter, 11217 and wasder.

"But when Bob Marvin is accused of making a purchase that was 'stupid in 1974'..."

Dudes, where did I say this? Not saying it's false as I'd have to run numbers but I don't care to do so.

"there in lies the weakness in BHO's entire presentation/ideology--the defensiveness with which he approaches any piece of data that does not march in lockstep with his self-aggrandizing vision"

Such data is always paired with an absurd notion of a bottom and recovery. It's that notion that I get defensive with, not the data. A reversal in trend has to be sustainable over many months before we can talk recovery. That's why I focus on year-over-year market behavior.

***Bid half off peak comps***

Posted by: Brownstones Half Off at July 29, 2009 5:49 PM

11217 - moving is not that big a deal. You hire movers, and they do most of it for you. And it's not that expensive compared with the savings to be had right now with falling prices. I did it with kids - trust me, it's very doable.

Posted by: Miss Muffett at July 29, 2009 9:08 PM

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July 29, 2009

Widget Underprices for Third Straight Time

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