Comments on: Sunday Night Stats – Volume is Stabilizing

By: Riley Smith | Realtor Coconut Grove, FL

Riley Smith | Realtor Coconut Grove, FL — Tue, 22 Jul 2008 20:34:43 +0000

I love your explanation of absorption rates. To me, they have always been a useless indicator.
I have heard though, that a 9 month absorption rate indicates a stable market. But a better indicator to me is average days on the market.

By: Kary L. Krismer

Kary L. Krismer — Wed, 16 Jul 2008 03:42:59 +0000

46 was in reference to 40, where you said you’d have to see the rat reference in context. I provided the link to it.

As to 49, you can think what you want, but people are not buying larger houses, at least in comparison to last year. So for if whatever reason slightly larger houses were selling in the summer either year, it’s happening again, for the same or a different reason. It doesn’t matter.

By: ARDELL

ARDELL — Wed, 16 Jul 2008 02:39:36 +0000

Kary #46. ? and your point is? I’m not following.

By: ARDELL

ARDELL — Wed, 16 Jul 2008 02:35:40 +0000

Kary,

You can think what you want, but people are buying bigger for less money because they aren’t buying a 2-5 year “stepping stone” house. With the uncertainty looking out into the near future, they don’t want to have to sell in a few years. That is a change in the thinking and actions of buyers.

A few years ago they would buy a smaller house for a lot of money, knowing that they could sell it in two years for more money, and then buy their bigger house. Today they want the house they can stay in longer…for less.

By: ARDELL

ARDELL — Wed, 16 Jul 2008 02:27:47 +0000

Larry,

Sorry, I had a skazillion interruptions. Here it is:

http://www.raincityguide.com/2008/07/15/can-you-price-your-house-at-land-plus-structure/

By: b

Wed, 16 Jul 2008 01:32:53 +0000

Coffee is for closers.

By: Kary L. Krismer

Kary L. Krismer — Tue, 15 Jul 2008 23:20:40 +0000

Okay, I can see how you’re looking at it. Bigger houses will sell for less money, all other things being equal. So yes, as the median square footage moves up, the price per square will move down.

Rather than being a choice to buy more for more money, I think it just is a difference in consumers, since it appears to be seasonal.

By: ARDELL

ARDELL — Tue, 15 Jul 2008 20:50:47 +0000

P.S. I ask that other commenters reserve their comments on Larry’s #43, and post them on the new post devoted to this topic.

By: ARDELL

ARDELL — Tue, 15 Jul 2008 20:49:17 +0000

Larry,

Yes and no

If you don’t mind, I’ll write a post on that now since it deserves a longer explanation than a comment can handle. I’m writing it now.

By: Larry

Larry — Tue, 15 Jul 2008 19:54:52 +0000

Since I’m not a real estate type, but a numbers type, I’m going to ask a dumb but related question. Isn’t it too simple a model to look at the sale price of a property by looking at the square feet of the structure? A property around Seattle, correct me if I’m wrong, has about half of its value in the land, and half in the structure. If real estate appreciates or depreciates. it’s the land that goes up and down, not the structure, right? I understand that $/sqf is an index that varies with property value, but this doesn’t seem to reflect the reality that it’s the land value that’s going up and down, which has only a loose relationship to house square footage.

Or is it just not workable to try to do a more complex calculation? My concern is that when you have an unusual situation with a large lot, and 2/3 of the value is in the land, this method will give erroneous results.