Tuesday Open Thread
This is your open thread for today. Please post random links and off-topic discussions here.
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14 comments:
The median home price barometer is...
for shi'ite
As the ratio of expensive homes to lower-priced houses sold increases, median prices over the entirety of the housing stock will rise even if prices on all individual houses are falling.
it is misleading to talk about "the housing market" as if $2M homes were in the same market (interchangeable with) $200K homes, because they are not. The bottom-line is that misleading metrics should be avoided, and it is wrong to use median house sale prices to reach any conclusion about price trends in housing values
Kinda like taking the temperature of a terminally ill cancer patient to judge his/her health...
...what's more, you can't rely on per-square-foot prices to correct for this phenomenon, because on average, bigger homes sell for less per square foot!
The way that statisticians deal with this conundrum is by examinining multiple statistics -- median, mean, standard deviation, etc. Ideally, of course, you don't rely completely on summary statistics -- you look at the overall distribution of sales themselves.
Of course, the NWMLS doesn't want you to have this information....why is that, do you think?
I've been lurking and reading this blog for a few months, but I have a question for you...
What effects do you expect to see on the housing market when the fed decides to drop or hold interest rates in a few days?
The Fed will not drop rates. The dollar is at an all-time low vs. the Euro. BB will keep rates steady for some time.
grivetti,
The article that you posted a link to is excellent. It's one of the few I've seen where an explanation with details / examples are provided on how median sales price statistics can be misleading.
http://streetlightblog.blogspot.com/2006/12/house-price-changes-in-us.html
quote: "Instead of focusing on the national average, however, I much prefer looking at the house price data city-by-city; real estate markets are quintessentially local, and the national average obscures most of the interesting bits of information about the US housing market."
Look how they all move in similar directions. Bubblicious!
Oh, do check out the second chart in the article - the home price graphs for several major interior cities. Late to the party, but they might suffer awfully in the case of a contracting economy.
What effects do you expect to see on the housing market when the fed decides to drop or hold interest rates in a few days?
Holding will result in a very bad recession. Dropping rates will result in very high (perhaps hyper-) inflation and a very bad recession.
The Fed is claiming that they're concerned about inflation and nobody's buying it anymore. If they can't use rhetoric to keep people invested in the dollar (see recent loss of confidence in the dollar), they'll have to use action.
I don't see the Fed dropping interest rates. In fact, as soon as the dollar slips a bit more, I'd expect to see them thinking about raising interest rates, not lowering them.
I don't think that BB will drop rates even in the near future. Oil is only going to rise from here, wages are stagnant, manufacturing is down, and the dollar is getting massacred. BB is supposedly an inflation hound, his last few statements he has warned he is watching the inflation numbers closely. My guess is that we will see a hold on rates for some time.
plymster, I think you were reading my mind!
I also think that Wall Street is very frothy right now. They seem to be overracting to every bit of good news and ignoring the bad.... Seems very 99 esque.
Fasten your seatbelts!
Late payments on high risk loans jump
This year is on track to be one of the worst ever for subprime loans, with 80,000 borrowers behind on payments, newspaper report says.
I think I may live in the same building as Trackbike and I think he may be a 80 year old woman!
The other day I was riding up the elevator of my condo in Belltown (yes Trackbike I am renting a condo in Belltown despite your thoughts that everyone there OWNS). 3 of us are in the elevator and some old lady asks the guy next to me "Do you own or rent?" he replies that he owns. She says "GOOD!" Then she looks at me and asks the same question. I ask her why she wants to know. She says she is doing a "survey". I tell her I am renting. She gives me a scowl. I get off the elevator and she tells the guy that she has been living there for 9 years and most of the people in the unit are owners not renters and thats a good thing.
i've spoken to quite a few people since I have moved in and I think she would be suprised to find out that more people are renting there than she thinks.
Trackbike, are you really the 80 year woman????? Are you taking a survey?
3 of us are in the elevator and some old lady asks the guy next to me "Do you own or rent?" he replies that he owns. She says "GOOD!" Then she looks at me and asks the same question.
Hahaha... besides telling her it was none of her damn business. I would have told her, "My 18 yo. girlfriend and my band's roadie are renting our studio from some guy in Florida"
gene8073 posted a comment to the article containing:
"I'd be interested if you have any good way to measure the actually drop in existing housing prices."
I just started watching the housing market (want to buy, but afraid to do it), so I'm not very adept at analyzing / reading the statistics yet.
Anyone out there have the answer to gene8073s question?
Anyone have access to data that is more meaningful?
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