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Prices are still up in some Boston suburbs article

 
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PostPosted: Wed May 28, 2008 5:51 pm GMT    Post subject: Prices are still up in some Boston suburbs article Reply with quote

.

Here's the Link from Boston.com
article also has a map

I shake my head , and tell myself
it's because of a small sample size.


http://www.boston.com/realestate/news/blogs/renow/buying_and_selling/


Quote:
As in past months, however, some towns continue to buck the trend. At right is the latest installment of my homemade monthly map showing Boston-area towns where prices failed to fall in April. Topping the list are Winchester, where prices are up 38 percent this year; Brookline, up 20 percent; and Belmont, up 11 percent. (Regular readers will recall that the map shows only towns with at least 10 sales per month -- at least 40 sales so far this year.)
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PostPosted: Wed May 28, 2008 6:10 pm GMT    Post subject: Re: Prices are still up in some Boston suburbs article Reply with quote

Anonymous wrote:
.
I shake my head , and tell myself
it's because of a small sample size.


That's not the only problem (though it is probably the biggest one). Prices in Arlington where down year-over-year in April, but The Globe lists it as one of the towns supposedly bucking the trend. They are using year-to-date sales for their map whereas the trend of declining prices established by the article they referenced uses year-over-year April figures. I would guess that there were some higher priced sales earlier in the year skewing the year-to-date median, whereas this "immunity" isn't showing up in recent months.

Here's a reprint of my comment from the comments to the original post:

Quote:

Prices are down in Arlington if you use the same criteria as the 12% drop article that you linked to. That was a 12% drop for the state's single family homes from April 2007 to April 2008. According to the Warren Group's website, the median price for Arlington single family homes fell from $479,500 in April 2007 to $460,000 in April 2008. I didn't check the other towns, so the same could apply elsewhere as well.

Of course, the oft repeated caveat still applies that the number of sales is pretty low and so drawing conclusions about values in all of Arlington from such a small cross section of the stock leaves plenty of room for error.


I only looked into Arlington because the Globe persists in calling it "hot" when it's numbers aren't that different from surrounding towns and the sample size is minuscule. Somebody should check the other towns on their list to see if they also posted year-over-year declines in April.

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PostPosted: Wed May 28, 2008 6:25 pm GMT    Post subject: Re: Prices are still up in some Boston suburbs article Reply with quote

admin wrote:
Somebody should check the other towns on their list to see if they also posted year-over-year declines in April.


I was impatient and did this myself for the five towns that the original author said have appeared on all three installments of this map: Arlington, Belmont, Dedham, Needham, and Winchester. It turns out that two of the five had year-over-year declines in April: Arlington and Dedham. Dedham fell from $362,500 to $349,750. It was also pretty clear that the variability was high from year to year for all the towns.

Another thing that I noticed was that the year-to-date median for Arlington, which is what the author used to classify it as bucking the trend, may be up from 2007, but it is down from 2006.

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PostPosted: Wed May 28, 2008 9:48 pm GMT    Post subject: Reply with quote

Something else has been bugging me about The Globe's post. They are asserting that towns are showing repeated strength, but they are coming to this conclusion by looking at many of the same set of sales over and over again. Here's my latest comment, which is waiting to be approved:
Quote:

Marcus said "You can't simply cherry pick towns that happen not to show median price declines in a month, and declare them immune"

Technically, Binyamin wasn't looking at a single month, he was looking at the year-to-date sales. In fact, if you do look at just a single month, two of the five towns which have been gainers on all three versions of the map actually fell in price. Both Arlington and Dedham had a lower median in April 2008 than April 2007. Dedham fell from $362,500 to $349,750 and Arlington fell from $479,500 to $460,000.

Using the year-to-date median is good in that it increases the sample size (albeit still small), but I think that it negates the assertion that appearing on multiple versions of the map conveys strength. Of course there are going to be towns that make repeat appearances - there is a large overlap in the data used for each map. The previous map covered January, February, and March (assuming it came out last month). This map covers January, February, March, and April. That's a 75% overlap in the time period covered. The list of towns is slow to change because the data being used is largely the same, not because the towns are displaying repeated strength.

You would need to use non-overlapping time periods to support the assertion of repeated strength. For instance, comparing January - April from 2006 to 2007 would be an equivalent comparison which should also show gains if these towns are immune. In fact, the median price for single family homes in all five towns declined using the same year-to-date time period from 2006 to 2007. Check The Warren Group's Town Stats to confirm - Arlington, Belmont, Dedham, Needham, and Winchester all fell.


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