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…
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]
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.
“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…
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.
” ‘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.
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
“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
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.
I found the perfect book for the bulls!
http://www.amazon.com/Statistics-Dummies…/dp/0764554239
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.