Bearish Brownstoners Miss Mark on 2nd Street Sale
So far we have precious few data points on the predictive powers of the pricing widget. For a while, the only HOTD or COTD to sell was 316 Cumberland Street, which sold for $2,250,000 in June, a shade less than the asking price of $2,295,000 but almost $360,000 more than widget voters predicted. And now…
So far we have precious few data points on the predictive powers of the pricing widget. For a while, the only HOTD or COTD to sell was 316 Cumberland Street, which sold for $2,250,000 in June, a shade less than the asking price of $2,295,000 but almost $360,000 more than widget voters predicted. And now our second data point shows an equally bearish disposition: 93 2nd Street, which generated a predicted selling price of $914,379, just closed for $1,086,312; in our defense, we said at the time that “We could see it getting pretty close to” the asking price of $1,125,000. Interesting, eh?
House of the Day: 93 2nd Street [Brownstoner]
MFN,
The point isn’t whether the widget is telling us anything about where the market is heading — it isn’t. The question at hand — for those of you that forgot or got sidetracked — is whether the collective wisdom of Brownstoner widgeteers is worth anything. We now have 3 data points that say the widget skews well to the bear side of the market at the given point in time. We have 0 data points showing the widget close to or above sale price. Statistical significance, not yet. A pattern sufficient to base a hypothesis upon, surely.
I say the widget is uncanny. Take the widget mean, multiply by 1.15 and there’s your opening bid. Be prepared to go up to 1.25, but don’t go over.
Houses are not like stocks. Most people aren’t flippers, they are looking to buy to live in them. You don’t sell just to avoid bigger future losses or to take profits at a small uptick. You hold them and live in them. So it is pointless to say “well, in six months it will be worth less” because, if it sold now, it won’t be on the market in 6 months (unless it is 237 14th Street). The only intellectually honest way to understand the widget is as an aggergation of estimates of current market value, i.e., what it will sell for.
DIBS;
I’m not trying to qualify or pigeonhole those people. I’m willing to buy myself (for reasonable value) and accept near term loss of equity.
My point is, we’re trying to have an absurd discussion about a trend in the market based on 2 widget appraisals.
Nearly all sales in NY specifically over the last year thus far has “predicted” the exact opposite of the reality.
So the idea that this one place going for above what a bunch of blog trollers like us guessed it would as some sort of predictive indicator of the NYC real estate market is just silly.
That people are willing to puff up their chests and sling darts over this sort of stuff is even more so.
Good reading at Urbandigs today…
http://www.urbandigs.com/
Manhattan inventory has dropped below 10K (from a high of over 11K a couple months ago) and there were 2,120 SIGNED CONTRACTS in Manhattan over the last 8 weeks.
Granted we are going into a slower season and it seems that a lot of people who were looking to buy, did…but considering some of the bears on here make claims to this being worse than the Great Depression, over 2000 signed contracts in 2 months is pretty good. Especially since we’re talking about Manhattan only.
11217:
2 widget appraisals hardly qualifies as enough data to show us where the market is.
The real market data is that the ask/bid spread is quite far apart in the NY market. It’s illiquid, harder to finance, and it’s hard to see where any economic tailwinds are that are going to propel us forward in any meaningful way.
Risk is heavily on the downside. Doesn’t make it a guarantee, but if you’re into risk management, seems fiscally wise to wait.
Assuming a large % of people sense this, speaks to a downward trend in real estate.
More facts What:
Panama Canal CEO Says Auto Shipping Showing ‘Signs of Recovery
July 23 (Bloomberg) — The Panama Canal Authority has begun to see “signs of recovery†in shipping traffic, including from freighters transporting cars, said Alberto Aleman, the authority’s chief executive officer.
Aleman said he expects traffic in the fiscal year ending in September to total about 295 million tons, up from a previous range he had given of about 290 million to 295 million tons.
Traffic in the 95-year-old canal totaled 310 million tons in 2008. Revenue this year will be “similar†to last year’s record $2 billion, Aleman said.
“Amid the crisis, amid the recession, this is good,â€
Aleman, who’s run the canal since 1996, said in a telephone interview from Panama City. Car shipments have “declined as was to be expected given the problems that we’ve seen in the automobile industry worldwide but we’ve seen signs of recovery in this segment.â€
Another point about 29 Maple. It traded for 595k in 2004.
Hasn’t MM and others said that we are back to 2004 pricing??
830K doesn’t sound like 595K to me.
At the risk of stating the obvious, people have continued buying homes in America the last 3 years.
Most believe they caught the market bottom or close to it.
And nearly every one of them thus far has been proven wrong…
Posted by: MoneyForNothing at July 23, 2009 2:19 PM
And I’ll bet the vast majority of them could care less that it has declined in value as it’s their home and they plan on living there for many years and they no longer have to put up with a landlord’s rules and they can remodel as they please and, BELIEVE IT OR NOT, many will likely make capital gains on these places in the next 5 years or so.
MoneyForNothing, what person could have possibly bought a house sometime in the last three years and thought they’d caught the bottom? What I see is a lot of people sitting out, convinced they’ve seen the top.
(THis was several years ago so of course we both looked 22.)