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Month over month, it is up in two months in a row in Boston
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krishnarama
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PostPosted: Tue Jul 29, 2008 2:26 pm GMT    Post subject: Month over month, it is up in two months in a row in Boston Reply with quote

Based on Case Shiller Index ,it looks terrible on YOY basis but MOM is not that bad. Sunbelt is treally toasted.

http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_072943.pdf
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guest
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PostPosted: Tue Jul 29, 2008 2:48 pm GMT    Post subject: Reply with quote

that is just due to the seasonal nature of th NE RE market-- it is just as bad as it looks
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Renting in Mass



Joined: 26 Jun 2008
Posts: 381
Location: In a house I bought in December 2011

PostPosted: Tue Jul 29, 2008 3:04 pm GMT    Post subject: Reply with quote

Here's a chart for you. Notice what happens every year between January and June.
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JCK



Joined: 15 Feb 2007
Posts: 559

PostPosted: Tue Jul 29, 2008 3:40 pm GMT    Post subject: Reply with quote

Boston.com has some nice charts of Jan-Jun 2008 vs the same period in 2007.

http://www.boston.com/realestate/specials/07_08_june_ytd_sales_single/

Worth a look. The numbers are highly variable town to town. Most of the median price drop appears to be coming in the less desirable towns, but some "nice" towns like Sudbury are showing significant drops..

(Usual caveats regarding median prices of course apply...)
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Renting in Mass



Joined: 26 Jun 2008
Posts: 381
Location: In a house I bought in December 2011

PostPosted: Tue Jul 29, 2008 4:16 pm GMT    Post subject: Reply with quote

That's great info JDK. Is it a new feature, or have they always posted that data?
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spork



Joined: 23 Oct 2007
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PostPosted: Wed Jul 30, 2008 1:59 pm GMT    Post subject: Reply with quote

guest wrote:
that is just due to the seasonal nature of th NE RE market-- it is just as bad as it looks


yes exactly

nobody wants to look further into the data tough-the devil is always in the details. This was to be expected in the very seasonal boston mkt-even predicted in the futures, but what do you hear?

I think it was a few weeks ago that it was suggested by an article in the economist "i think" (picked up and reported widely) that some mkts are showing a turnaround...at least for boston this is very doubtful.

I read somewhere that the S&P case-shiller index is actually a 3 month moving average? is that true? if so i am very dissapointed. why would you do that when many markets show highly seasonal trends..YOY... for example as I am expecting the BOS mkt to fall off the tabble starting this fall...the 3 month seasonal average and the lag time will help smooth out the data and it will take some time to show this if it happens-probably well into the winter.

then again on the flipside, it will understate a spring run up (if there is one in 09) by delaying it

(it is a 2 month lagging indicator-but still probably the best we have)
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admin
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Joined: 14 Jul 2005
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Location: Greater Boston

PostPosted: Wed Jul 30, 2008 2:06 pm GMT    Post subject: Reply with quote

Yes, the S&P/Case-Shiller Index is a three month moving composite. I believe that the reason for that is that the volume of sales is too low if you only look at one month and that makes the price appear more volatile than it is.

- admin
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spork



Joined: 23 Oct 2007
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PostPosted: Wed Jul 30, 2008 3:01 pm GMT    Post subject: Reply with quote

I would think volume shouldn't matter that much since it is a paired sales index...especially when you are talking about several thousand sales per month. it is not like they are looking at 50 sales- isn't that the point- to take the sales mix out of the equation

where it might error on monthly variability (i would think would be small) i would think it would be more important on missing out on timing of significant price changes...especially since it lags 2 months and add 2 more months for smoothing

things like monthly interest rates changes would matter more i would think than volume in a statistic like this...but why smooth the data?
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Anon
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PostPosted: Wed Jul 30, 2008 3:01 pm GMT    Post subject: Reply with quote

What effect do you think the 90 day foreclosure moratorium had on the Boston numbers. Question
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admin
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Joined: 14 Jul 2005
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Location: Greater Boston

PostPosted: Wed Jul 30, 2008 3:16 pm GMT    Post subject: Reply with quote

spork wrote:
I would think volume shouldn't matter that much since it is a paired sales index...especially when you are talking about several thousand sales per month. it is not like they are looking at 50 sales- isn't that the point- to take the sales mix out of the equation?


Sure, volume still matters even though the sales are paired. Some people will overpay and some people will underpay. Pairing doesn't correct for that - it accounts for a change in the types of homes which are selling. It is the inclusion of a large number of sales which corrects for individual purchases being priced off center. I don't know how exactly they settled on 3 months as being large enough to give the desired volume, but bear in mind that the threshold needs to remain relevant in all the cities, including the smaller ones, at all times of the year, including off-peak winter.

- admin
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spork



Joined: 23 Oct 2007
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PostPosted: Wed Jul 30, 2008 4:06 pm GMT    Post subject: Reply with quote

ok right it accts for sales mix...and i agree, it would skew the data off center, especially smaller metros in leaner times of the year...but at what cost...ignoring the parabolic (esecially in northern cities) yearly sales trends effects on price??? i would think that is much more relevent to true prices

maybe i am wrong but i would think even a hundred or two should be statistically significant enough to keep the purhase price close enough on center to ignore that and focus on seasonality as being a higher weighted factor-of it is not perfect but i feel there is enough delay in this lagging indicator

or i could be wrong...just saying

admin-great site and forum...thanks for all the effort
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PostPosted: Wed Jul 30, 2008 6:26 pm GMT    Post subject: Reply with quote

Anon wrote:
What effect do you think the 90 day foreclosure moratorium had on the Boston numbers. Question


Just cant understand what is keeping parts of Boston propped up ?

I cant wait till the tonier parts of Boston crash Exclamation
.
.
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manuvaram
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PostPosted: Thu Jul 31, 2008 1:58 am GMT    Post subject: Tonier parts of Boston will not crash until... Reply with quote

The fancy parts of Boston are propped up by a vibrant job market in the high-paying sectors of the local economies. So long as the finance guys in Boston downtown continue to earn 7 figure paychecks, the possibility of a price crash in Weston, Wellesley, Newton and Brookline are remote.

This trend is apparent not just in Boston but in all of US. It is like we have two co-existing markets. One for the middle to low income classes who are losing equity by the minute. The other for the rich people who are holding up quite well. Median prices were up 12% YOY in Wellesley for 1H 2008!
http://www.boston.com/realestate/specials/07_08_june_ytd_sales_single/
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steverino
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PostPosted: Thu Jul 31, 2008 3:41 am GMT    Post subject: Reply with quote

What in God's name are you people talking about? Wellesley had a 13% drop in SFH sales since last year. There is no price increase. It's just a change in the mix of what's selling.

Going over this point again and again and again and again and again is getting a little tiresome.
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admin
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Joined: 14 Jul 2005
Posts: 1794
Location: Greater Boston

PostPosted: Thu Jul 31, 2008 4:06 am GMT    Post subject: Reply with quote

spork wrote:
ok right it accts for sales mix...and i agree, it would skew the data off center, especially smaller metros in leaner times of the year...but at what cost...


I guess the cost is in the perceived timeliness of the data. Trends may take longer to become apparent if you are using a three month window. That seems like a pretty small cost to me.

I also have a hunch that you could tease out the data for the individual months from the three month window. For instance, the most recent data point included March-April-May. The point before that included February-March-April and the point before that included January-February-March. It feels like there should be a way to subtract March and April from the current data point since we have additional information on what those months were. The math escapes me, though, especially since this isn't a straightforward average.

spork wrote:

ignoring the parabolic (esecially in northern cities) yearly sales trends effects on price??? i would think that is much more relevent to true prices


I think seasonality is a separate issue and that can be handled satisfactorily by comparing year over year data points. You could also probably create your own 12 month moving average pretty easily.

spork wrote:

admin-great site and forum...thanks for all the effort


You're welcome. I'm glad you like it.

manuvaram wrote:
The fancy parts of Boston are propped up by a vibrant job market in the high-paying sectors of the local economies. So long as the finance guys in Boston downtown continue to earn 7 figure paychecks, the possibility of a price crash in Weston, Wellesley, Newton and Brookline are remote.


How many 7 figure jobs are there really in the area? It sounds unlikely to me that the number is high enough to prop up so many towns, but assuming for a second that it is the case, the corollary is that if you don't make 7 figures, you shouldn't consider buying in those towns. If you are thinking of stretching to buy in an expensive town because you think everybody else there is rich and will therefore support your property's price, consider the possibility that this is what most other people are doing too.

- admin
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