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news
Joined: 14 Jul 2007
Posts: 0
Location: Greater Boston
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JCK
Joined: 15 Feb 2007
Posts: 559
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 Posted: Wed Apr 22, 2009 3:32 pm GMT Post subject: |
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This is almost as misleading as the Globe piece the author is criticizing.
According to the Warren Group, the 2008 median price for SFHs in Arlington was $475,000.
Jan-Mar 2009 median was $476,500.
The Mar 2009 median was $363,500.
Now it's certainly possible that March represents a new level for SFH sales in Arlington. But to draw such a conclusion based only 8 total sales, especially without doing any analysis on the previous sales history of these 8 homes, is jumping the gun. |
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balor123
Joined: 08 Mar 2008
Posts: 1204
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| Posted: Wed Apr 22, 2009 3:58 pm GMT Post subject: |
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| Free markets are clearly highly inefficient in this case. Buyers and sellers aren't meeting on price. Let's hope that time solves the problem with the buyer come out ahead. |
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admin
Site Admin
Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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| Posted: Wed Apr 22, 2009 4:25 pm GMT Post subject: |
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Yes, don't put too much weight on the median, especially for a single month in a town with so few sales. I put it in the subject because it is the new piece of information from the author's recurring post. His main point, that Arlington is no different from its neighbors, is more important but has been true from the start.
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JCK
Joined: 15 Feb 2007
Posts: 559
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| Posted: Wed Apr 22, 2009 4:27 pm GMT Post subject: |
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This is worth a read, and agrees with you:
http://www.nytimes.com/2009/04/22/business/economy/22leonhardt.html
Now, I don't know either the conditions that these homes are in (perhaps they're trashed) or whether buyers are allowed to inspect before bidding (which would also lower prices).
Nevertheless, it does seems like there's a disconnect here between seller asking price and buyer willingness to pay that's being reflected in these auctions.
I don't think we're going to see big drops in Boston unless ratio of sales/supply changes dramatically.
The places with big drops Phoenix, Vegas, Miami, and now NYC all have had a lot of construction in recent years, and prices are headed downward quickly. Not so much around here. So things are happening on a slower time frame. |
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JCK
Joined: 15 Feb 2007
Posts: 559
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| Posted: Wed Apr 22, 2009 4:35 pm GMT Post subject: |
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| admin wrote: | Yes, don't put too much weight on the median, especially for a single month in a town with so few sales. I put it in the subject because it is the new piece of information from the author's recurring post. His main point, that Arlington is no different from its neighbors, is more important but has been true from the start.
- admin |
I agree with the author's premise that there's nothing special about Arlington. Whether prices are flat or 33% down does nothing to change the analysis in this regard.
For the record, March 2009 median SFH prices in Cambridge are up over 100% YOY (YTD prices up around 40%). Maybe the Globe can run an article about how hot the Cambridge market is.
The author does not title his post with "32% down" so my fault for attributing that to him. |
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john p
Joined: 10 Mar 2006
Posts: 1820
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| Posted: Wed Apr 22, 2009 5:04 pm GMT Post subject: |
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| If your life's axis is along Route 2 and you're in a position in life where you're thinking about going to work on 128, doing Harvard Square one night, and taking the kids to youth hockey the next, Arlington is a pretty decent spot. |
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admin
Site Admin
Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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| Posted: Wed Apr 22, 2009 5:33 pm GMT Post subject: |
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| JCK wrote: |
I agree with the author's premise that there's nothing special about Arlington. Whether prices are flat or 33% down does nothing to change the analysis in this regard.
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While I agree that it is no way sufficient to draw a conclusion form, I wouldn't say that it does nothing. If Arlington is not "immune," then prices will eventually have to fall. This is the first time we've seen a decline of that size in Arlington. It is therefore noteworthy as the possible beginning of some serious declines. It is definitely not something to count on, just a signal to start paying attention in the coming months.
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JCK
Joined: 15 Feb 2007
Posts: 559
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| Posted: Wed Apr 22, 2009 6:23 pm GMT Post subject: |
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| admin wrote: | | JCK wrote: |
I agree with the author's premise that there's nothing special about Arlington. Whether prices are flat or 33% down does nothing to change the analysis in this regard.
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While I agree that it is no way sufficient to draw a conclusion form, I wouldn't say that it does nothing. If Arlington is not "immune," then prices will eventually have to fall. This is the first time we've seen a decline of that size in Arlington. It is therefore noteworthy as the possible beginning of some serious declines. It is definitely not something to count on, just a signal to start paying attention in the coming months.
- admin |
I disagree. By itself, it means nothing. Cambridge has gone up 40% YOY in the SFH market, comparing Jan-Mar 2008 to the same period this year. would you conclude that Cambridge is rising, at the same time Arlington is falling?
Single month stats from a single town are simply to noisy to tell us anything at all. The data is simply to granular, and we don't know anything about the individual houses that sold in Arlington last month. |
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admin
Site Admin
Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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| Posted: Wed Apr 22, 2009 6:57 pm GMT Post subject: |
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| JCK wrote: |
I disagree. By itself, it means nothing. Cambridge has gone up 40% YOY in the SFH market, comparing Jan-Mar 2008 to the same period this year. would you conclude that Cambridge is rising, at the same time Arlington is falling?
Single month stats from a single town are simply to noisy to tell us anything at all. The data is simply to granular, and we don't know anything about the individual houses that sold in Arlington last month. |
Let's denote the probability that Cambridge is rising while Arlington is falling as p0 before knowing the median prices and p1 after. I would conclude that p1 > p0, given only the medians. That doesn't mean that p0 and p1 aren't both really low and that the difference isn't really small. In other words, maybe it's not telling us anything useful (yet), but there is a little bit of information in there. If that weren't the case, then how many months of similar data would it take before p1 > p0 would hold true, if only infinitesimally so?
Fortunately, we aren't restricted to using the median. If somebody were motivated, they could look up the houses that sold in the public record and correct for many of the deficiencies in using the median (e.g., by mimicking the Case-Shiller methodology). That would certainly be much more useful, no argument there.
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JCK
Joined: 15 Feb 2007
Posts: 559
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| Posted: Wed Apr 22, 2009 7:38 pm GMT Post subject: |
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| admin wrote: | | JCK wrote: |
I disagree. By itself, it means nothing. Cambridge has gone up 40% YOY in the SFH market, comparing Jan-Mar 2008 to the same period this year. would you conclude that Cambridge is rising, at the same time Arlington is falling?
Single month stats from a single town are simply to noisy to tell us anything at all. The data is simply to granular, and we don't know anything about the individual houses that sold in Arlington last month. |
Let's denote the probability that Cambridge is rising while Arlington is falling as p0 before knowing the median prices and p1 after. I would conclude that p1 > p0, given only the medians. That doesn't mean that p0 and p1 aren't both really low and that the difference isn't really small. In other words, maybe it's not telling us anything useful (yet), but there is a little bit of information in there. If that weren't the case, then how many months of similar data would it take before p1 > p0 would hold true, if only infinitesimally so?
Fortunately, we aren't restricted to using the median. If somebody were motivated, they could look up the houses that sold in the public record and correct for many of the deficiencies in using the median (e.g., by mimicking the Case-Shiller methodology). That would certainly be much more useful, no argument there.
- admin |
OK admin, you win. There is some probability here that the information is useful. I'm saying that, as a practical matter, the probably is too low. If I can't draw any conclusions from the data (and here, I simply cannot), then I'd argue it tells you nothing.
How much weight would you give a presidential election poll that interviewed only eight people? |
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admin
Site Admin
Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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| Posted: Wed Apr 22, 2009 7:55 pm GMT Post subject: |
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| JCK wrote: |
OK admin, you win. There is some probability here that the information is useful. I'm saying that, as a practical matter, the probably is too low. If I can't draw any conclusions from the data (and here, I simply cannot), then I'd argue it tells you nothing.
How much weight would you give a presidential election poll that interviewed only eight people? |
I get and mostly agree with your point, but the presidential election analogy is a tad off. If you polled the same percentage of people for the presidential election as the percentage of Arlington homes that the 8 sales represent, you would need to poll 125,000 people (based on 19,411 houses in Arlington), and that actually does sound weighty. The question is, how many months and/or sales need to accumulate in Arlington before the result is useful in a practical sense? I don't know the answer. I need to study up on my probability and statistics.
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melonrightcoast
Joined: 22 Feb 2009
Posts: 236
Location: metrowest
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| Posted: Wed Apr 22, 2009 8:33 pm GMT Post subject: arlington |
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Another point that I didn't see mentioned in this article is that the middle school and high school have been found to be seriously lacking in quality by several people that I know that have/had the kids there.
Don't get me wrong, I LOVE Arlington and lived/owned there for a few years. But IMO, the quality of the middle and high schools do not justify the housing costs, which is why we are not looking to buy there again. I wonder if many other current owners and potential buyers have also come to this conclusion, which could really drive down prices.
_________________
melonrightcoast ... are you? |
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admin
Site Admin
Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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| Posted: Wed Apr 22, 2009 8:51 pm GMT Post subject: Re: arlington |
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| melonrightcoast wrote: | | Another point that I didn't see mentioned in this article is that the middle school and high school have been found to be seriously lacking in quality by several people that I know that have/had the kids there. |
He actually has mentioned the schools in past posts, albeit not in depth:
http://paper-money.blogspot.com/2008/12/arlington-artifice-november-2008.html
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balor123
Joined: 08 Mar 2008
Posts: 1204
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| Posted: Wed Apr 22, 2009 10:20 pm GMT Post subject: |
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How do you determine which schools are good? Word of mouth? That would be useful for me in the future as I don't think greatschools.net does a good job.
With only 8 sales, the prices reflect microeconomics not macroeconomics. The only macroeconomic data that you can gather here is in the number 8, which is far less than it used to be. |
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