Seventh Street in the South End is one of those fabled Manhattan Beach walkstreets. As much or more than others, this one is a kid's paradise.
7th is a flat stretch that goes all the way from Crest to Valley – no break at Ingleside. On a recent stroll we counted no fewer than 3 playhouses, 4 basketball hoops (of varying sizes) and a tetherball post in the walkstreet. It's a playground.
7th boasts a number of beach cottages that are well-kept and have preserved their original charm. Many of the entrances are warm and welcoming, embracing the walkstreet. (We cringe when we see walkstreet homes that are tucked behind fences or don't have a patio or deck fronting the public areas – why bother being on a walkstreet?)
On 7th, you'll also see a handful of new homes that are designed to take the utmost advantage of the location.
One home in particular is notable for how most of a whole wall on the ground floor opens out onto the front yard, which continues out onto the walkstreet without interruption.
The flat south end walkstreets are super kid-friendly, but as we've heard from current and former residents, they're not for everyone.
Some say that once their kids have grown older they'd rather live in a more mellow location. We don't take this as anti-kid so much as pro-peace-and-quiet.
The adults get their share of fun, too, though – the extraordinary, raucous Halloween activities on these South End blocks are a major draw, with plenty of parties for grown-ups alongside the trick-or-treating.
For its charm, family appeal, and easy access to the beach and downtown, 7th Street is one of MB's Great Streets.
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97 comments:
Agreed, great street. Only downside is there are no ocean views. Please keep up the "great streets" series, they are always enjoyable to read.
Please keep this section of the blog up, MBWatcher. I am still looking forward to the second edition of the Strand homes.
Thanks for a great read.
MBW, any chance you could maintain a running list in Excel that summarizes the streets you've reviewed? As a potential near term buyer, it would be great to have a source document for all the reviews with a summary of pros and cons.
I understand if you’re concerned the Shorewood mafia might increase the hit they already have on you? ;)
Agreed. This is a great column. Please keep it up.
I live near 7th Street and often walk along the portion you've highlighted. I agree that it is a great street and I'd love to live there, but I've heard from several people that the neighbors there have serious tensions and have had to go to mediation due to the kids vs no kids biases, and the many "enhancements" to the street (toys) that you mentioned. Being a parent of young kids, I'd love to be there, but apparently not all the neighbors embrace that environment.
As an MB native now living in the Westside, I find it amazing that parents with young kids can afford these homes. Think about it. Say you have a 4 yr old and a 2 yr old, maybe you had your first at 30 (about the average in USA). That would put you in the 30-35 neighborhood. Maybe even less for the wife (just facts). All I'm saying is where the hell are these folks getting the coin for these homes??!! I wasn't 50 until I could even think about a 3+ million home purchase. Sadly, the vast majority of the country never will (average USA home value $240k)
Anybody have any ideas what these folks are doing for a living.
I am in i-banking and thought I was paid well!!!!!!!!!!!!
Thanks!!
I'm betting a lot of the people there had kids a little later... several of the younger partners at my first only started having kids once they made partner (somewhere in their mid-30s or so), as they just didn't have time before that. I'm sure other fields are similar... maybe a few people who got lucky in banking or dot com businesses, and a few people with help from the bank of mom and dad round out the mix...
Err... first = firm
That's right, Ep. That's why you see so many older parents with young tots than you did in the past around here. Lot's of grandparents kicking in 1-2 million as well.
pretty crazy, agreed.
KAA design group is building a new home on the strand that is gonna be amazing (it's that 3 lot merger we talked about awhile back)
Anyway, on their website it says "designed from the ground up for a young family"
I'm sure this will be 12+ mil when finished.
Salary is not what enables people to buy these types of homes. Lump sums of money are the only way to build the capital necessary to buy $3M+ homes. Sold companies, equity, ipos, etc. are most likely.
I've met a few people that followed this pattern:
A. Wealthy parents with a child live in MB
B. Kid moves away for a while to sow oats (renting in HB for instance) while getting MBA from USC/UCLA and a fairly high powered finance job -- eventually gets married and has a (grand)child
C. Young family moves back to MB, significantly financed by the grandparents
there is also a fair amount of people that are hollywood people - producers, idea people, etc. i think that's who is building the strand property. also, wealthier younger people that bought in the late 90's had more than a few opportunities before the housing downturn to keep growing their capital base by treating RE like a short term investment. i know that served a lot of people well.
2:16, from the keyword/label list on the left, you can pull up all the Great Streets postings... or you should be able to... mbw appears to have missed labeling the most recent one
now labeled!
If people are really curious, I am 31 and just bought a $3mm walk street house. I accumulated the wealth through bonuses from my hedge fund job over the past 9 years. I realize that I am extremely fortunate, although there always seems to be tons of people making even more money and buying even bigger houses than me, and so I am also asking where the heck are they getting all that money?! The rat race never ends....
I am in my mid-30s and my spouse is in the upper-30s. We both have decent paying ($250K+) jobs but acquired the money that allowed us to buy a $3 mil home a few months ago through real estate investements. We bought our first house in the Valley for $400,000 in '95 and just kept trading up as the market rose. We put 40% down on our current home and didn't even have to sell our prior one to do it (just refinanced and pulled equity out, still leaving a 50% LTV on that house). So for all of you sitting on the sidelines, I can't tell you how many people told us between '94 and today that we were buying at the height of the market and two to three years later we sold for a hefty profit. Maybe we hit the top now, but I am living in my dream home in a great community with fabulous schools for my young kids and could never have done it if I had listened to all the sideline sitters over the last ten years.
Ben said: "Salary is not what enables people to buy these types of homes. Lump sums of money are the only way to build the capital necessary to buy $3M+ homes. Sold companies, equity, ipos, etc. are most likely."
Nope. I bought homes in the south bay and sold every time I hit $600k in gains (plus or minus...mostly plus). I never tried to time it. Every time I sold, I qual'd for another home because my total comp grew as well.
LOVE to read so much positive and constuctive conversation here for a change....It IS always a great day when you live at the beach!
Re 4:39 who said the triple strand property is being built by a hollywood person, it's not - it's actually a dot com guy who sold and cashed out at the top of the stock market, mostly pure luck. He and his wife are retired (in their early 40's) and have young kids, and are suprisingly very nice and without pretension (they grew up as mere commoners like the rest of us). And um...that's only their vacation home, not their primary residence.
Pretty interesting comments on what it takes to buy a home in MB. Is it hedge fund money, partner at a law firm, an entertainment wizard, former high school football star turned lowly stockbroker who looks at charts, people who have traded up over the years. All valid. Let me give you one obvious one that nobody has mentioned...
How about LEVERAGE! How about 10-20% down with no documentation? How about many posters on this blog saying that people should have a mortgage that is 3x or 4x their salary? How about only putting 20% down and borrowing 2mm if you make 500k per year like lots of people have talked about on this site? Isn't that what has gotten many people in the mess they are in around the country and yes, even in MB?
Don't get me wrong, there are PLENTY of people in MB who are conservative in their financing of their homes, people with plenty of down payment, people with plenty of equity, people with plenty of cash flow/income. But do a few searches on Lexis Nexis or Property Shark and you see the leverage that is taking place in this town. Greed is a funny thing and comes in all forms. Bubbles form and people think there is no way ever to lose money. I especially love the guy who said he pulled out equity from one home to buy in MB and said he still has 50% equity in his home he used to live in. Reading between the lines, I get the impression that he believes he doesn't have much risk. Maybe he doesn't, maybe he's not saying what I think he's saying. But a 20% drop in both his homes will put a huge damper on his net worth. No, he won't be at risk of losing his house, but will impact his net worth.
And then there is the sense of entitlement that all CA homeowners have that RE prices always rise. Reversion to the mean... keep saying that. It could happen. And God forbid, is it possible that prices can drop below the mean? No, not in MB, never.
I'm not a doomsdayer, but set your expectations to expect some possible bad things happening. Expect the worst and hope for the best. For many of you, I guess the worst would be me living next door to you and the best... well, that I go back to NY.
5:30, 5:50 or should we say Huggy, Nice try. Word usage and syntax betrayed your ruse.
Bitter, table for one. Geeez Mookie, now your research includes pulling up the loan history on various homes through Lexis and Property Shark, to entertain who is leveraged in your opinion.
I can understand how this might be related to negotiating a particular purchase,but to just find time to lurk around a legal research tool for fun, does seems a little, shall we say, pathetic!
8:25 - Pathetic? Yeah, I can see that. With the way the stock market is right now I certainly have plenty of time.
I actually recently got access to Lexis which has allowed me to bang out quick searches on many properties in MB that are listed on MBW's spreadsheets. Trust me, there is a reason many of these homes are for sale right now. I actually haven't thought of just pulling random addresses or neighbor's addresses, but thanks for the idea.
Whoever came up with the label Shorewood mafia is a genius.
keep hoping Mookie, that;s all I got to say. I would like to know when 7:21 started buying his homes that he got a $600k gain every time. Don't really buy that story as I bought and sold 6 homes since 1996 and never had a $600k gain on one. Maybe he started buying a $2M home in 1990? Oh wait, at one time Danny Manning had actually paid the most for a home in the Beach Cities when he played for the Clippers, and I believe the purchase price was well below $2M. Maybe Huggy can remember back then.
5:43 How dare you call a respectable company like
Whorewood a "mafia?"
9:00 it was $2.5M in 1993 and was also the subject of MBC's Britney story at 2805 Tennyson I believe.
3.45pm - the triple lot on the Strand you rated as 12m+ - how about double that and more?
IMO, 8th and 9th are nicer. They're both flatter and without the Morningside dead end.
5/21 @ 9pm - I was that person. My first home was bought in 96. I bought it for $330k. I put $110k into it and lived there a good number of years. I sold it for $1.09mm. I then bought a larger home for $1.15mm and sold it 2 years later for $1.85mm. I did about $30k of work on that one.
It wasn't that hard. I am not a RE person. I just saw potential in a few homes (a tailwind helped too!).
Mookie:
I think the other poster is right. You are bitter. I didn't realize that you can look up a person's compensation on Lexis. How do you know how much money they make? Maybe they are at 3x.
PS, My mortgage is 3.5x my comp. I also put 40% down thanks to my good home purchases. Lastly, you said, "a hit to his net worth". If you ever own a home, I hope you don't sit there and calculate your net worth every time the RE market moves. If you do, you have a lot to learn. I'll consider my home as part of my net worthv(or lack thereof) if I ever liquidate.
"Bitter, table for one" - That was funny.
Did anyone notice that the comments were all positive until Mookie decided to post? Downhill from there. Thanks for bringing the NY attitude to our beach city.
Primary residence is not a consideration in calculating ones net worth. For example, if I have $1M in cash and live in an APT. Technically I am a High net worth individual. If I then put that $1M down on a home, I am no longer a high net worth individual.
Exactly, 7:02am. 6:41am here. That was my point. That is why I laugh at all these people that continually comment about how net worth drops during housing corrections. And?
The Shorewood mafia strike again.
There are 80+ open houses this weekend, which is of course, Memorial Day weekend. Last year there was 34 on Memorial Day weekend.
6:41- Not so sure it is the NY attitude, I would call it the Mookie attitude. He has to make himself feel better because he peaked in high school. Regardless, sorry for somewhat doubting you with the $600k gain. I didn't do it as well, but still made out nonetheless. For whatever is going through Mookie's mind, there is a lot of money in the area (home equity from prior sales, internet, vc, hedge fund, entertainment) you name it. Sure there is leverage as well. Mookie would probably be dire about my leverage, but I seem to be ok for now. Maybe when I lose my job and my tenants lose their jobs, my investment properties will go into foreclosure and Mookie will pounce. Assuming, he has the cash. Because we all know you need sometimes 30% down nowadays and a lot of extra cash in the bank.
I don't think Mookie is bitter or negative at all. He just has a stock trader mentality when it comes to homes--even though they are completely different asset classes. He probably does pretty well with stocks and once he realizes he won't be churning homes he will buy one. That is unless he plans on moving within the next 2-5 years in which case renting is by far the best option.
6:41 - 7:02 here:
"And?" Wow – you really are from NY.
I was just helping you make a point, since you were having trouble making one with your verbal diarrhea. Apparently, I helped the point but not the squirts. Sorry buddy!
Random musings from the Hugster:
5:55 said So for all of you sitting on the sidelines, I can't tell you how many people told us between '94 and today that we were buying at the height of the market and two to three years later we sold for a hefty profit.
As soon as I read this, I knew it was only a matter of time before one of the Cult of the Clueless chimed in to claim 5:55 was really me. As predictable as the sun rising in the east.
8:21 said 5:30, 5:50 or should we say Huggy, Nice try. Word usage and syntax betrayed your ruse.
Wow, almost 2.5 hours, 8:21. What took you so long? Take a break with the bong? Yeah, you’re right, all those previous comments were from me – in fact, no one, other than the realtor, has ever made a dime buying and selling residential real estate, it’s all a big hoax and you are much better off staying put in your one-bedroom El Porto/N Manhattan Beach rental (as if you have any choice in the matter). Feel better now?
Mookie said “For many of you, I guess the worst would be me living next door to you.”
Actually, Mookie, I think that would be the best thing for everyone. You’d have a home so you’d quit whining about home prices, you’d cure your homeowner wannabe angst and be calmer and, most importantly, we’d forever be rid of your incessant technical analysis of real estate market values, replete with resistance levels and Bollinger bands, Japanese candle sticks, whatever (at least until it's time for you to sell).
8:47 said For whatever is going through Mookie's mind, there is a lot of money in the area (home equity from prior sales, internet, vc, hedge fund, entertainment) you name it. Sure there is leverage as well.
What is going on is a subtle form of anti-homeowner propaganda on this blog that most people in Manhattan Beach are in way over their heads and somehow don't deserve to be living in the nice new homes that they purchased over the past 10 years or so because they got in by lying about their true income on their mortgage apps and being fiscally irresponsible. It makes the COTC feel so much better about their cheap and petty lives, knowing that they could be living large (rather than small) if they were as equally irresponsible as our neighbors.
That's why, whenever someone goes to sell a home they bought in the past couple of years, the COTC immediately start piping up on this board about how it must be an ARM reset and/or the sellers are facing foreclosure. Job transfers apparently never register with them, perhaps because many of the COTC haven't reached that point in life where out-of-area employers would actually want to hire them for anything.
Hey 5/21 8:43p
Who came up with SHorewood Mafia - it was my post yesterday...unless someoen can state an earlier use...i claim IP and copyrights on it!
Original Posting:
agent lover said...
Warren Buffett buying MB, interesting thought,
If Buffett did want to buy all of MB would the Shorewood Mafia allow it? If Buffett offered to buy all lots at a steep discount would the agents even tell other buying clients or prefer a discounted price for their seller but get double commision?
5/21/08 6:26 AM
5/22/08 10:45 AM - Go away!
There's a lot of extreme posting on here when the truth is somewhere in the middle. There's no question that, over the past 15 years or so, MB housing, and really, California housing in general, has been a great investment. Probably the best investment going, actually, as I'm sure there are plenty of people who have quadrupled or quintupled their money over that time frame, which is a Berkshire Hathaway level return.
But Mookie is very right about reversion to the mean; just because Southern California real estate has been one of the world's best investments for the past 15 years hardly means that it's bound to continue; if anything, the opposite is true. Regardless of the asset, if the performance over the past 100 years is about 3% a year, and the performance over the last decade is 20% a year, the best bet is that, over the next decade, it's going to be a lot closer to 3% than 20%. If you made money in the past, congratulations... but if you're young, or just were too nervous to buy, you're probably too late. Housing is still great for security and a place to live, but the days of it being a great investment are probably behind us.
I mean, really, if we've reached a point where experienced surgeons and law firm partners can barely afford good neighborhoods, prices have to be unsustainable. We're not going to sell the entire California coast to hedge fund traders, pro athletes, and hollywood stars...
I agree on the truth being in the middle. Plenty of people can afford to buy, plenty of others cannot. Pricing is set at the margin. The marginal (weakest, not average) buyer today is less able to qualify for a loan, lacks a sifficient downpayment, and is possibly worried about his job. Not sure what has changed on the supply side (don't have the data for SFR permits, and not sure whether there will be a measurable increase in forced used home sales), but it seems that weaker demand at the margin should prompt a price decline. The question is how big of a decline.
"sufficient", sorry
huggy did you buy those DQ numbers yet?
6 months of desk fees + no closed deals = no extra cash for DQ numbers.
10:31am said: "6:41 - 7:02 here:
"And?" Wow – you really are from NY.
I was just helping you make a point, since you were having trouble making one with your verbal diarrhea. Apparently, I helped the point but not the squirts. Sorry buddy!"
Sorry. I think you missed my point. I was agreeing with you! My "and?" comment was pointed to those who say net worth drops (as in, " 'And' so what?". Thanks for the negative post, though.
No sweat!
Speaking of DQ numbers.
Per DQ April 2008 city tables, MB is down 25% y-o-y.
Per LATimes zipcode chart, MB is down 21% y-o-y (with condos down more).
Yeah, it WAS a great "investment". Of course, it is only a home.
PROPAGANDA ALERT!! The Cult of the Clueless, specifically 6:10 pm, is at it again, using a statistically insignificant one month's worth of sales to make a clueless point about home values here in Manhattan Beach.
Do not believe the COTC propaganda on this blog. Here is the correct data comparing January 1 to the present with the same time frame last year (and 2006, just for good measure):
Median Sale Price - SFRs only
2006 - $1,850,000
2007 - $1,850,000
2008 - $1,707,500 (-7.7%)
Median Sale Price - SFRs, Condos, THs
2006 - $1,667,500
2007 - $1,710,000
2008 - $1,595,000 (-6.7%)
Each time the cult loons post their propaganda, you can count on Huggy to immediately post the facts (I'm just a stickler for the truth, I guess).
So, can anyone tell me how many homes have sold in
MB west of Sepulveda year-to-date?
Huggy is the Steve McQueen of MBC...just fatter, older and crazily more reactionary than Rush Limbaugh or say, Stalin, but not nearly as fat as Mookie. Mookie, I suspect, is insanely shut-in "Seven" gluttony fat. Ultimately, he'll have to be wheeled around by armed lardsmen. Nonetheless, both are clearly fat asses of the highest order. The reality is, other than MBW, the more you post on here, the fatter you get. I suspect that the Goodyear Blimp, as it so often flies over MB, thinks to its fat ass self "Damn, Huggy and Mookie are sooo fat." And hey, if the Goodyear Blimp is thinking that, it's time to cut down on the el caloria intake, amigos and, of course, posting. I've gained eight and half pounds posting this. I'm going for a run on the beach. I'll be the one dragging my fat ass on the Strand attempting to look remotely athletic.
58 SFRs west of Sepulveda sold to date, according to tax records (which are usually about a week behind).
PROPAGANDA ALERT!!! PROPAGANDA ALERT!!!
Everybody, everybody, look at me, look at me...aren't I beautiful, I have the best stats west of Sepulveda...grrrrrroooowllll
The jig is up, Angry, 7:03 just saw you in your house dress and you've been exposed.
Relentlessly Yours,
JR
What truly makes for a great street are the neighbors. To me, that's the real magic of the South End Walkstreets: By their very nature, they're just so darn friendly... Impromptu dinners with the folks down the block. Kids running freely in and out of each others' houses. Ice cream parties. Cocktail hours. Neighborhood surf sessions. Oh, and no cars. I'll take bouncing balls and squealing children over traffic noise any day. Even if I have to trip over a bleeping scooter from time to time. But then, I'm not a hermit or a curmudgeon. Yet. Maybe in a few decades I'll sell out and move to the wilds of Saskatchewan
Debate the facts, JR, not the person. Your cult leader and master, MBW, has commanded you. If you don't follow his orders, he'll confiscate your black Nikes.
Btw, anyone else notice the bitterness that cult members like JR express towards anyone citing facts on this blog?
Huggy stating facts? Isn't that an oxymoron?
This...ahem...person...stated that the last bubble was "15%-20%, max" when in fact it was more like 40% plus. They continued on with ridiculous stats citing increases in median home prices, when in fact prices were already on their way down. Now, this person expects readers to believe that prices are only off 6.7% from recent highs.
Question - What's next?
Answer - Who cares? This person is about as inaccurate and irrelevant as it gets when it comes to real estate information.
PROPANDA ALERT!
Notice how the COTC confuse their own propaganda with facts? Newsflash, 6:12, even your cult leader has pronounced the 1990's recession-induced downturn was 27% peak-to-trough, not 40%. You can't even get your own cult mantra straight.
But what can you expect from the COTC's bitter renters and angry 2-bedroom hovel owners who only wish the worst for our local real estate market this go-round? If you're disputing my data, which is current as of yesterday, why don't you ask all those realtor friends of yours to run an MLS search for all closed sales ytd and compare them to the same time frame last year? Very easy to verify, unlike your cult leader's data from the 1990's which he refuses to release.
BOTTOM LINE: 6.7% drop in median sale prices ytd for all MLS-reported residential sales compared to the same Jan-May timeframe last year.
6:12, you and jr are clearly the most bitter of the COTC (with Anon7, now signing in as anonymous, a close second). Are you and jr just the same person using different sign-ins?
Hey Huggy,
Are those SFR #s right?
0% Growth from 2006 to 2007?
7.7% decline YTD?
Sure would hate to be in a house purchased in 2006. If you had to sell right now, you'd lose 12.7%.
Correct? Or am I just using fuzzy math?
I don't know where you're getting 12.7% but 7.7% is the decline in median sale price, ytd, compared to the median sale price for all SFRs sold in MB (and reported on the MLS) for the same time last year.
Since you're obviously in the COTC and, therefore, clueless, I'll just point out the obvious, namely, that this says nothing about whether any particular house has gone up or down in value over that time frame - depends on location, quality of the home, etc.
Hey, COTC Chick Littles, here's an article about your precious Case-Shiller index (since this is a subscription article, I have no choice but to copy-and-paste). Author is Bernice Ross.
Put A Gag On Chicken Little
"Real estate prices are plummeting!" "Foreclosures are at an all time high!" "Prices predicted to decline another 20 to 30 percent!" These are the headlines that we face daily. It's no wonder that there's a crisis in consumer confidence. The truth of the matter is that the sky is not falling. In fact, contrary to what the press is reporting, real estate prices are stabilizing, and in a wide number of areas they are actually showing signs of improving.
The S&P/Case-Shiller Index is the gold (scare) standard these days for those who report on the housing market. News agencies began using this index about two years ago rather than the indices provided by OFHEO (the Office of Federal Housing Enterprise Oversight) and NAR. These same news sources often fail to report the numbers provided by publicly traded companies such as Realogy.
If each of these resources came to the same conclusion about the market, there would be no issue. The challenge is that NAR, OFHEO and Realogy all reach the same conclusion: Prices are down nationally less than 1 percent and, in many areas, prices are actually increasing.
In contrast, the most recent numbers from the S&P/Case-Shiller Index (reported on April 29, 2008) reach a very different conclusion:
"Data through February 2008 … show declines in the prices of existing single-family homes across the United States … The 10-City Composite posted a new record-low annual decline of 13.6 percent and the 20-City Composite recorded an annual decline of 12.7 percent."
According to David M. Blitzer, chairman of the Index Committee at Standard & Poor's, "There is no sign of a bottom in the numbers. Prices of single-family homes continue to drop across the nation. All 20 metro areas were in the red for February-over-January reading. In addition, 19 of 20 MSAs (Metropolitan Statistical Areas) are reporting negative annual returns. The monthly data show that every one of the MSAs has now declined every month since September 2007, marking six consecutive months."
Now compare these numbers to those reported on April 22, 2008, by OFHEO. The OFHEO "Monthly Price Change Estimates for the U.S. and Census Divisions from January 2008 to February 2008" drew the following conclusions:
1. Overall U.S. prices were UP 0.6 percent.
2. Regions reporting increases include the Pacific (0.3 percent), West North Central (1.3 percent), West South Central (0.7 percent), East North Central (1.6 percent), East South Central (1.2 percent), New England (2.2 percent), and Middle Atlantic (0.1 percent.)
3. Only two regions reported declines: (Mountain -0.6 percent) and South Atlantic (-0.2 percent).
In other words, a whopping 77 percent of the areas in the U.S. reported a price increase between January 2008 and February 2008! The S&P/Case-Shiller Index, in contrast, concludes that 95 percent of the MSAs reported negative returns. Of course, there's no mystery as to which of these two reports has been in the press.
What accounts for this difference? Both the S&P/Case-Shiller Index and the OFHEO index use "repeat valuations." In other words, to be included in the calculations, a property must sell twice. The difference in the two sets of sales prices is the basis for each index. OFHEO's sales-price data include only homes that have conforming mortgages. The Case-Shiller Index covers property sales with both conforming and jumbo mortgages.
Andrew Leventis (June 2007) attributes part of the difference to the fact that OFHEO "does not lend additional weight to more expensive homes; each pair of home valuations is given equal weight in the index estimation, regardless of the price level of the home." In contrast, Case-Shiller applies a "weighting" formula before it calculates it data. The challenge with making decisions about how to "weight" certain factors introduces human judgment into the equation and dramatically increases the probability for creating errors.
NAR and Realogy, using a different approach from OFHEO and S&P/Case-Shiller, arrive at essentially the same conclusion as OFHEO, i.e. that the average price of homes in the U.S. was down less than 1 percent. Their approach is to total up all the sales, divide by the number of units, and then calculate the arithmetic average (mean) as well as the median. In stark contrast to the S&P/Case-Shiller approach, the technique that NAR and Realogy use includes all properties and is much more objective.
From a scientific point of view, when two sets of data produce conflicting results, you look to other sources and/or methodologies to see which data set is supported. In this case, the NAR and Realogy data supports the OFHEO data. It's the S&P/Case-Shiller index that lacks corroboration from other sources.
Unfortunately, the press almost universally quotes the S&P/Case-Shiller Index, and it may be the least accurate housing-price index. Next week's column explains why.
PROPANDA ALERT!...er,uh...PROPECIA ALERT!...er,uh...oh, what the heck...TYPICAL HUGGY BS ALERT!
As usual, Huggy the Putz continues his assualt on reality.
Folks, keep your eyes on the trends. That is more inventory, tighter credit and a recessionary economy. But don't worry the US, State and local governments are here to help!
BTW, I am not bitter or a "Doom & Gloomer". I actually think the continuing economic downturn is a healthy, natural response to recent over-leveraged, bubblelistic behavior on the part of Wall Street, Big Banking and real estate semi-professionals.
6:12 - I think we all should start calling Huggy, George Costanza. As mentioned b4, one of Costanza's great quotes is, "It's not a lie, if you believe it." Huggy truly believes the bs that comes out of his mouth.
As for 9pm on 5/21 - You said to keep hoping. Assuming you meant hoping for prices to go lower. No need to hope pal, it's already happening. You must have been on vacation for the past 6 months.
6:41 on 5/22 - I've got a lot to learn. Please teach me. Actually, let me teach you. There are two components to net worth. Total net worth and liquid net worth. View it any way you want, but it would be completely ridiculous to not include the equity you have in RE in one's total net worth. In fact, unless you believe Forbes, Fortune, Business Week, WSJ, NY Times and others as comic books, they also view RE as part of one's net worth. See their annual lists of wealthiest people in the world... Donald Trump, Sam Zell, John Sobrato, John Arillaga, and many, many others. Those guys happen to focus on RE, but rest assured, when they calculate the other people on their various lists, they do include their RE holdings. Thanks for staying anonymous on that one.
As for your comments about my NY attitude. Thanks for the compliment and I welcome that, as somebody has to be direct and get many of you out of fantasy land. But MB RE never goes lower, I know...
7:02am on 5/22 - See comments above. By the way, I don't think anybody would consider you a high net worth investor with only $1mm. We call you the emerging affluent. Keep working though, you'll get there.
8:47am on 5/22 - I didn't peak in high school. My kids tell me I'm the best, of course they are not teenagers yet. Until they start calling me a jackass (and much more), I'm still moving higher. By the way, aside from the 4 touchdowns I scored in the championship while at Polk High, did I tell you guys about the night I went for 30 points against Central? They couldn't stop me.
9:14am - I'll buy a home when I find something I both love and can afford. Simple as that and I won't settle. I've found both of those equally hard. But then again, since I can only afford $1mm and want to live on the Strand, I think my chances are somewhere between slim and none. However, did I ever tell you about the charts I look at when it comes to RE? According to my calculations, once that double bottom is taken out I know I can at least get a walk street house for that much.
As for Huggy's 10:45 rant - You should take a look at Property Shark or Lexis every now and then, you'll find that serious leverage is going on in MB. I could list more than a handful of homes for all of us to look at and we can get specific about which homes are currently at less than 10% equity based upon their current list price and what Lexis/PS tells me their mortgages are, but I don't think it does anybody any good to out these sellers. Propoganda Huggs? No, just bringing my NY realism to candyland.
7:03pm - Very funny, and I mean that. I go about a buck 60, but definitely getting softer in my old age. Loved the lardsmen comment. You get the clever award for yesterday.
In closing - Funny, prices still moving lower and yet we still have bulls in denial. Look at the scoreboard, I would say it is now Bears 2, Bulls 0, now in the top of the third. Interesting note, MBW posts about how May got off to a roaring start, there were bulls who chided us bears, and low and behold, inventory increases, albeit, by one. Now that is a market where prices should rise.
Oh, I almost forgot, 1313 Oak sold. Now I thought the only homes that sold were the ones that were on the local Good Homes Board of Director's list. That one was most certainly not. Oh, you mean when you lower your price by over $700k and come back to earth that buyers will actually take a sniff. Funny how that works. I'm a little puzzled though, I heard that 465 30th is on the Board's list of Good Homes. However, it's been for sale close to 3 months. Really, being on the list says that it is a good home and according to many on this site, those are the only ones that are selling. It can't have anything to do with the price...
Bernice Ross? Are you kidding me? She, of www.realestatecoach where the motto is...and I'm not kidding..."The place to go to make real estate dough"
Thanks for the laugh...both at yours and...ahem...DR Ross' expense.
Huggy, dude you are really scraping the bottom now.
Mookie, glad to see you're now firmly ensconced in the cult. Maybe you can be their investment adviser.
I see you've also adopted the Hugmeister's formula for multiple responses. Didn't address any of my factual data however. Wonder why? Do I need to print out all of the home sales in MB this year for you or would actual data that you can see for yourself (unlike MBW who doesn't release his data) be too much of a shock to your system?
Yeah, you're right, Mookster. All us MB homeowners are way overleveraged and going down the tubes. We're all in the exact same boat as 1313 Oak (I guess the COTC are now using sample sizes of one?). You're so smart to be renting - why don't you just stop torturing your poor realtor, however, and tell him/her that you'll be renting for the next 10-15 years - nothing worse than engendering false hope.
"LOVE to read so much positive and constuctive conversation here for a change....It IS always a great day when you live at the beach!"
With apologies to 5/21/08 7:48.
Costanza - I have no problems with your stats. Stats can be interpreted 1000 different ways and I've never seen one where I couldn't turn a complete 180 to suit my arguement. I know you are capable of doing the same. I actually love the stats you provide as I think they're very helpful.
Since you're prone to exaggeration, let me be clear that I never said and don't believe that all, or even most MB homeowners are overleveraged. But like in any community, there are more than just a handful. My point was if you looked at Lexis you'd find that more than a few of today's sellers are at 10% or less in equity. Perhaps, yes perhaps, that is one reason they have their home for sale and/or are unwilling to lower their price. Since most homes today are selling at around 10% below list, that would take them to negative equity. I wouldn't want to be them.
As for adopting your formula for response, I didn't realize you had the patent on that one. How else would I respond to 5 or 6 different posters? Don't let the ego get in the way Costanza. Remember, fat, bald, unemployed people who live with their parents don't have much to live for. I guess that by thinking I've "adopted the Hugmeister's formula for multiple responses" makes you feel better, you're coming closer and closer to Costanza everyday.
As for my realtor - She quit taking me to open houses long ago, we figured we could do that ourselves.
7:47, dude, do you have any rebuttal to the arguments in the article posted above? So far, you've merely stooped to the COTC tactic of attacking any author who offers an argument that is contrary to the COTC catechism.
As I've stated before, Case-Shiller is flawed because it relies entirely on the repeat-sale methodology. One of the flaws is alluded to above - sales that fall outside C-S's algorithms are assumed to be remodels (yet how would they know?) and are given a 'weighting' by the authors, introducing an element of human judgment.
The other flaw is that C-S is skewed heavily to distressed sales (those are repeat sales, too), thereby dragging down the "true" median. What if there was a way to include refinancings? Both a sale and a refinance require an appraisal (which, as we know, have tightened up considerably) so there is a measure of market value for both. If refi's were somehow included, the data set would be broader and the results far less dire.
I know the above is probably over your head, dude.
And mookie, poor mookie, what can one say except you're taking this all way too personally. Btw, scratch my suggestion of working full-time as the COTC's financial adviser. They would first need to come up with something to invest - dude, for example, is probably living from rent check to rent check. So bad idea - erase, erase.
Mookie, your Realtor stopped taking you to open houses because she knows you are NEVER going to buy anything and she is probably sick of hearing your wishful thinking about those $3M homes that you cannot afford that you are hoping to get for $1.7M.