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October 23, 2009

20 Clifton Place Sells, Kicks Widget's Ass

The widget underprices again! We've gotten used to the pricing widget being off by 10 to 15 percent, but in the case of 20 Clifton Place, a three-family in Clinton Hill that was on the market last spring for $899,000, it was off by 20 percent. The average reader prediction was for a selling price of $679,708 and the house closed on September 24 for $850,000. Quite a difference! Meanwhile next door, 22 Clifton Place, which never was a House of the Day, also closed last month for $1,200,000, quite a bit below what it was asking when it was an Open House Pick back in 2007 and in 2008.
House of the Day: 20 Clifton Place [Brownstoner] GMAP

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Comments

Thank Jesus! I thought the brooklyn housing market was resorting to cautious rationality... good thing I was wrong. Where would we be if this mess of a house that is "a few doors down from a notoriously bad drug house" sold for less than 3/4 of a million!?

Posted by: tybur6 at October 23, 2009 9:37 AM

Tybur - buy now or be priced out forever!!

Posted by: dirty_hipster at October 23, 2009 9:38 AM

is this a continuation of yesterday's OT "what we think they are worth to society versus what gets paid"?

Posted by: dittoburg at October 23, 2009 9:39 AM

No... it's a revisit of the "home buyers in this city are complete retards" theme.

Posted by: tybur6 at October 23, 2009 9:41 AM

why is this even a shocker? there's always bound to be some idiot who is willing to over pay for something.

*rob*

Posted by: Butterfly at October 23, 2009 9:43 AM

Mr. B;

I grant this headline the "Benson's Best" award. Very funny.

Posted by: benson at October 23, 2009 9:44 AM

right t6. that must be it.
if it makes you feel better the widget actually overpriced 100 st marks and hit 178 8 ave on the nose, so you'll have to think of another theme for those houses.

Posted by: antidope at October 23, 2009 9:45 AM

Instead of blaming the widget for underpricing, you need to lay the blame on the Brownstoner respondents who consistently low ball.

Why is the Brownstoner crowd so consistently wrong when it comes to appraising properties? Collectively, it seems the Brownstoner appraisers don't know diddly.

Posted by: Colonel Steve Austin at October 23, 2009 9:48 AM

antidope... I never made any suggestion about the widget. The selling prices for ALL of those properties you mention are pretty retarded. The correlation with the widget is *interesting* but only academically.

Posted by: tybur6 at October 23, 2009 9:50 AM

I don't think 'Stoners are appraising; we're saying what we'd be willing to pay (if we had the bucks.)

Posted by: Arkady at October 23, 2009 9:50 AM

Col Steve -- they don't know diddly or are they wishing and hoping for something reasonable? (I don't have much faith that it's the latter, but a boy can hope and dream... I've already been told I have to become a gay, cat-owning, banker to enter this market, so I'm grasping at straws.)

Posted by: tybur6 at October 23, 2009 9:53 AM

"Why is the Brownstoner crowd so consistently wrong when it comes to appraising properties?"

Because we aren't property appraisers?

Posted by: dirty_hipster at October 23, 2009 9:57 AM

The wisdom of crowds is an oxymoron.

A couple of ideas for the widget, which might make it useful instead of just for laughs:

1: Don't show the other votes until after someone has already voted. It skews the numbers.

2: Now that you have some data that shows the Brownstoner audience consistently under-values property, why not show two numbers: the avg. reader appraisal, and a second number that attempts to accurately guess the sale price based on the average percentage difference between appraisal and sale.

Posted by: bivouac at October 23, 2009 10:02 AM

I thought we'd decided Brownstoner appraisers were spot on with the selling price being a constant of 1.2 times the widget price?

Posted by: dittoburg at October 23, 2009 10:05 AM

The widget displays very little predictive power when it comes to pricing. However, when it comes to gauging sentiment/confidence, this widget is highly predictive.

The widget seems to support a strong Bearish sentiment among Brownstoners. Since Brownstoners are supposed to know a little something about that which they speak, this would be like a 'Smart Money' indicator.

And right now, Smart Money, as represented by the consistent widget underpricing, is on the sidelines.

Posted by: Colonel Steve Austin at October 23, 2009 10:07 AM

Taking applications for new members of Team Bull. Line starts over here to the right>>>>>>

Posted by: daveinbedstuy at October 23, 2009 10:09 AM

I think the widget reflects what posters here would offer, as opposed to the property's market value or what someone is willing to pay for it.

Posted by: East New York at October 23, 2009 10:13 AM

I think people favor their own neighborhoods and tastes on widget...so if not their 'hood or style subtract 25%.

Posted by: Petebklyn at October 23, 2009 10:21 AM

Bivouac,
Those changes are underway. Programmer's been a little swamped, that's all...

Posted by: brownstoner at October 23, 2009 10:21 AM

it's because you're polling is not entirely sample of people who can all actually afford these homes. if you want a more accurate result you need to poll people who are in a certain income bracket, looking for a home, have some knowledge about actually purchasing a home in brooklyn.

Posted by: ftgreenepark at October 23, 2009 10:22 AM

or maybe actually visiting a home rather than relying on the web is a significant part of the buying/pricing decision? duh! This 20 clifton came with no fotos...

Posted by: antidope at October 23, 2009 10:27 AM

DIBS, thanks for offering but I'm staying under Wasder's Team Reasonable flag.

Posted by: more4less at October 23, 2009 10:27 AM

M4L--thanks for the loyalty. We reasonable people need to stick together! haha.

Posted by: wasder at October 23, 2009 10:29 AM

"20 Clifton Place Sells, Kicks Widget's Ass"

Damn shoe shine boys.

Widget will knock it out in the first round during the rematch when the market bottoms.

How's 51 Cambridge doing?

***Bill Thompson for Mayor***

Posted by: Brownstones Half Off at October 23, 2009 10:36 AM

i'm confused -- are readers using the appraisal widget to indicate:

(1) what they personally think the property is worth, or
(2) what they think the property will sell for?

if the purpose of the widget were explicitly (2), maybe it'd be more accurate? maybe there should be two widgets?

Posted by: brentTBC at October 23, 2009 10:37 AM

"Taking applications for new members of Team Bull. Line starts over here to the right>>>>>>"

That's also where the line ends.

***Bill Thompson for Mayor***

Posted by: Brownstones Half Off at October 23, 2009 10:39 AM

WAY too many people put stupid low prices which brings down the average. I think if you take the data then chop off the high- and low-end outliers you may get a more accurate picture. But it does seem obvious that certain people are "scamming" the widget by putting the lowest possible price in each time regardless of the property.

Posted by: hazenyc at October 23, 2009 10:40 AM

Even before the widget, and even during the height of the boom, the overriding tendency of commenters on this site has been to underestimate or talk down the value of the house. I think there are a variety of reasons for the widget coming in low. One is that the sale price is the price paid by the person, of those in the market at the given time, who wants it most and is willing, therefore, to pay the most. By that definition, and according to rob, everyone overpays for their house in every market. But the market is made up of actual transactions, not others' conjectures as to value. I could say all day that oil is only worth $50/barrel, but if the spot market is paying $60, that's the market, no matter how skilled my analysis may be. But I also think there is no denying a bit of a grudge factor in the undervaluing on the widget. I would expect to see the constant in up and down markets.

Posted by: slopefarm at October 23, 2009 10:40 AM

I don't agree that the fact that properties sell for a higher price than the average widget price indicates that widget users are undervaluing house/co-op/condo prices. In the real world, if the seller had to accept the average offer s/he received, then it would be an apples-to-apples comparison to look at the average widget price relative to the sales price. But the seller only has to accept the highest bid (by definition an outlying bid from the average offer s/he receives), so it makes sense that the average widget bid is below the sales price. Now, if the highest estimate on the widget was lower than the price the property actually sold for, then brownstoner would have underpriced the property.

Posted by: bkhabitant at October 23, 2009 10:46 AM

Do me one favor, Team Bull. When you go to sell in five years and can't be made whole, make sure to say "But it beat the widget!"

Posted by: Whuh at October 23, 2009 10:50 AM

All,

What was the peak comp for this property?

***Bill Thompson for Mayor***

Posted by: Brownstones Half Off at October 23, 2009 10:52 AM

BHO, even before econ tanked, recall ppties of that conditions near there were selling around 900k-925k

Posted by: more4less at October 23, 2009 10:56 AM

Hey Whuh, where's your sorry ass been??? I guess you still know everything.

Posted by: daveinbedstuy at October 23, 2009 10:59 AM

curious: How does the widget compare to Zillow zEstimate?

Posted by: hazenyc at October 23, 2009 11:03 AM

not that you can trust the comments, bho, but it seems general consensus was major work required (500K) and that a renovated house on this block sells for 1.3/1.4. 26 (slightly bigger) sold for 1.375 in apr 07.

looks like you'll have to revert to the usual refrains: a) SB or b) just wait til next year.

Posted by: antidope at October 23, 2009 11:06 AM

Hey BHO,

I think fsrg did a great job the other day saying why Bill Thompson shouldn't be mayor, but how's this for you? Is THIS who you want running the largest city in the country???!!
If so, you are even more crazy than I thought...

He can't even manage a campaign, much less a city.

http://www.nytimes.com/2009/10/23/nyregion/23thompson.html?_r=1&ref=nyregion

Posted by: 11217 at October 23, 2009 11:07 AM

bkhabitant -- you're exactly right about the widget (average) vs. selling price (highest bid).

Basically it's the difference between the nutjob that pays the absurd price and the slightly less crazy nutjobs that "underestimate" the price tag... and jesus save us if these are underestimates of the property's "value"!!

Posted by: tybur6 at October 23, 2009 11:14 AM

Yes, it seems a crazy nutjob is purchasing nearly every available home in Brooklyn. Widget x 1.15 or better is batting about .950 on reported closings so far. Need a more systemic explanation than buyer was a crazy nutjob.

Posted by: slopefarm at October 23, 2009 11:28 AM

It would be interesting to have the widget display the median and perhaps the range of results too. My guess is that the median might be a better predictor of the actual sale price in this type of poll.

Posted by: keithters at October 23, 2009 11:36 AM

So only -6%, m4l, while borough-wide, brownstones are about -20%. Congrats to the sellers. Good luck to the buyers.

fsrq did an okay job, 11217. It wasn't substantial. Scary stuff in your article. But that's what smear campaigns do. I respect Bloomberg's record and I do think he's a good leader. But he's arrogant and I've had enough of him. Eight is enough!!! I'll take my chances with Bill Thompson. Yes, I'm crazier than you thought.

Just a), 'dope. I'm not timing the bottom, just calling it when I see it.

***Bill Thompson for Mayor***

Posted by: Brownstones Half Off at October 23, 2009 11:47 AM

Median would be interesting, but probably more predictive would be something at 2/3 or 75% toward the high end of predictions. As I and others have pointed out, the seller only needs to find one buyer, not the average of many buyers.

Posted by: Boerumresident at October 23, 2009 11:54 AM

slopefarm... Actually I think the 'nutjobness' of folks participating in the Brooklyn real estate market is quite systematically pervasive.

Posted by: tybur6 at October 23, 2009 11:59 AM

"if the highest estimate on the widget was lower than the price the property actually sold for, then brownstoner would have underpriced the property."

Good point, bkhabitant.

"Yes, it seems a crazy nutjob is purchasing nearly every available home in Brooklyn."

I don't know, 'farm. 6 months later seems to average about 25% sold. That wouldn't be "nearly every". Maybe not crazy nutjob but definitely foolish. The market is going to get considerably worse. Even Robert Shiller himself, co-author of the Case-Shiller index, is calling more irrational exuberance in the stimulus bounce peddled in the media as recovery (I posted an article the other day from Yahoo Finance).

***Bill Thompson for Mayor***

Posted by: Brownstones Half Off at October 23, 2009 11:59 AM

actually wrong bho. of the first 21 hotd, 12 have sold and one is in contract. 5 have been pulled. 1 of the 3 remaining on the market is back on market after the contract broke. average price sold at 6% off ask and 16% above widget.

so that makes at least 12 pretty stupid buyers.

recall, this was april and the psychology was terrible.

so, it must be b) wait (at least) til next year for your half off sale.

Posted by: antidope at October 23, 2009 12:08 PM

"As I and others have pointed out, the seller only needs to find one buyer, not the average of many buyers."

Yup. If enacted at brownstoner's launch, the widget average would have been overpricing. I too used to think the RE only went up ('til about 2005). It's the "crowd", aka 'average of many buyers', that eventually and ultimately moves the market. Team Reasonable is the underground railroad for former bulls (membership shrinks daily) who are now converting to bears (membership grows daily).

***Bill Thompson for Mayor***

Posted by: Brownstones Half Off at October 23, 2009 12:09 PM

Actually, BHO, based on the overall tone of comments to HOTDs during 2005-06, if there had been a widget it would have underpriced then, too. "That's way too high" led "it'll go for ask' by at least a 4-1 margin on this site, even during the boom. Go back into the archives and look at some HOTD threads from then and see if you think otherwise.

Posted by: slopefarm at October 23, 2009 12:17 PM

I said six months later, 'dope, not HOTD's. The larger pool is more accurate.

You couldn't have possibly went through the entire archive since 2005 and come up with that conclusion, 'farm. I certainly don't have the patience and time for that kind of legwork. But maybe you're right.

***Bill Thompson for Mayor***

Posted by: Brownstones Half Off at October 23, 2009 12:28 PM

"But I also think there is no denying a bit of a grudge factor in the undervaluing on the widget"

Slopey, I agree that this is a factor. I also think, irrational though it may be, some people are hoping that actual house prices will fall in line with the widget. If only wishing made it so.

Posted by: CarrollGardened at October 23, 2009 12:29 PM

How about giving people an incentive to estimate as close to the actually sales price as possible. I would think you could track everyone's estimates and at the end of the year award a $ prize to whoever was closest. Not only would we have a vested interest in the accuracy of the widget but it would probably drive up page views also.

Posted by: nycdelisauce at October 23, 2009 12:45 PM

Read your owns posts, BHO. You wrote: "Yup. If enacted at brownstoner's launch, the widget average would have been overpricing." I disagree. Brownstoners, on average, always think the price is too high. True in bull and bear markets. You don't need to read them all. It was commonly said of this site in the bull market that the last thing a seller would want is to be HOTD, because brownstoner readers will trash it and say the price was too high.

Now we know from the widget that all this downgrading on brownstoner has little effect on the market. Perhaps that's what's really bugging you. The widget isn't proof of the market's direction -- it doesn't speak to that at all -- but it is proof that you can't use this site to talk down a house's price.

Posted by: slopefarm at October 23, 2009 12:45 PM

as one would expect in nyc, people intentionally lowball stuff to game their competition and don't want to represent the market (fellow bidders as well as sellers) showing a strong hand. i think widget has those stoner values, but also the brokers are there automatically above ask on each one too so it seems to even out. probably fewer at both extremes in the real market. weak dollar isn't going to help either with those high tail bids.

my personal theory is that there is a curve where most buyers see value, and a couple on the upper tails, for whatever reason (they either want or feel the need to have it now) but regardless it is the brokers job to convince the bidder the the rest of the curve is right there with them, or at least several motivated parties. very low inventory brownstone brooklyn makes this a reality, so people have bought all the way down on the high side of the "value ranges" for any particular property. and they will continue to do so, until there's no more "down".

and it is this upper tail which is and will continue to create the sales and comps in inventory starved brownstone brooklyn, unless inventory is somehow suddenly quadrupled. the cash is there. whether any particular broker is good at the game is another issue, but there are a few that are better than you think. some of course are as fake as $3 bills and we've seen even the gullible money protest at that.

on the flip side of the equation, there is a lot of competition in the middle of the pack, where it would come down to quality of buyer, but rarely i find it even comes to that. it doesn't seem that the broker is trying to pull some people out of the pack into pushing their bids higher, but rather those buyers are already up there buying from a discount on list price (in some cases very low discount), not really psf or any absolute value.

Posted by: invisible at October 23, 2009 12:50 PM

Another widget buster....

27 Prospect Park West has sold for the asking price of 1.3 million.

Widget said 1.017

And p.s....this was the place with $2799 a month maintenance...

Posted by: 11217 at October 23, 2009 1:18 PM

"Read your owns posts, BHO."

Slow down, 'slope. I also said you might be right. I guess I stand corrected.

"Now we know from the widget that all this downgrading on brownstoner has little effect on the market. Perhaps that's what's really bugging you."

The widget doesn't bug me. I rarely participate. For good measure, the widget is always way above what I would enter anyway. You know and I know that it is these dire macroeconomic conditions that effect the market, not the widget.

***Bill Thompson for Mayor***

Posted by: Brownstones Half Off at October 23, 2009 1:37 PM

BHO -- I've always said that whether the widget lowballs is an analytically distinct question from what direction the market is headed and how fast. Widget is a snapshot comparison at a single point in time of where b'stoner eaders think the market for a particular house is at, with accuracy judged by the ultimate sales. It just seems logically flawed to assume widget is right and all buyers are wrong when the widget is trying to guage the market and buyers are the market. Just because market price for a house is x doesn't mean six months later the market won't be up or down another 5-10%. And if market goes down later, it doesn't make the widget right in retrospect, because the widget doesn't ask what you think the house will be worth in six months, or a year, or five, or ten, it asks what you think it is worth now. One or two buyers might have overpaid compared to market, but the argument doesn't hold for 12 out of 21. And if the market goes down 15% in six months, widget will still underprice at the new level. Widget won't match sales then any more than it does now.

Posted by: slopefarm at October 23, 2009 2:03 PM

I was able to appraise $500K twice. Can't this be restricted per user?

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 7, 2009 12:00 AM

that was on this very hotd. (probably the only time you've hit the button...twice...right?) you've created quite a track record.

whatever you say can and will be used against you... ;)

Posted by: antidope at October 23, 2009 2:11 PM

Obviously it was a test of my suspicious take on widget, antidope. Why would I disclose otherwise?

"you've created quite a track record"

Yeah, DOW8000SP800. Soon half off.

"whatever you say can and will be used against you... ;)"

Bring it!