Comments on: Surprise! Condos are Holding Up Better Than Homes

By: Case Shiller Chimes in With Good News: US Down only 17%! | Misha's Musings

Case Shiller Chimes in With Good News: US Down only 17%! | Misha's Musings — Wed, 29 Jul 2009 10:15:03 +0000

[...] down from their all-time highs, which occurred right about a year ago. See my previous post. No tags for this [...]

By: Misha

Misha — Wed, 29 Jul 2009 09:18:25 +0000

Auden – yes, interesting point about the fixer-upper. Not sure they’re even selling. They’re just sitting. Still planning on doing some work on this, but I’m not convinced that there’s that much of a difference between how much each segment of the market is suffering. They’re all down 20% or $200k, which is why you aren’t seeing sales north of $2million.

By: x-Man

x-Man — Wed, 29 Jul 2009 05:28:49 +0000

I agree with Misha. This being said, i’d be curious to find out how many observations in the data sets of condos and homes.

Condo should hold up. It is to be expected that for similar space, at some point there will be a contraction of the prices which is probably what is happening. In this economy people become less picky.

By: Auden

Auden — Mon, 27 Jul 2009 03:51:21 +0000

I think this may be in part due to the fact that the fixer/tear down market has fallen drastically (- 30% ), combined with the dearth of volume in the high end (2million plus) which has collectively dragged down the SFH average. The condo market has not been as subject to these forces, especially the fixer/tear down plunge.

By: Misha

Misha — Fri, 24 Jul 2009 19:40:17 +0000

Dave: thanks for the comment, but I don’t think you’ve correctly characterized my inference. I am not comparing a given condo to a given home, though I agree that in some ways that my be the best measure of the market. The problem, of course, is that the market rarely offers up the same home (or condo) being sold in relatively short time horizons, let alone in the same condition as the original sale.

One can always raise questions about statistical measures and I try to be very careful in my methods and very conclusions. I use the median because I think it’s the most representative overall measure of the market, in that it is less skewed by “outlyer” values on either side. On that basis, I see nothing wrong with looking at how the median has fared on a comparative basis for SFD’s vs. condos.

Furthermore, much to my surprise, Bayview and other neighborhoods you’d think were doing much worse than the city as a whole have in fact been doing about the same, at least until recently. See my post here.

Finally, sorry to disagree, but I think Case Shiller is an absolutely awful measure of anything going on in San Francisco. It covers an enormous MSA that includes ground zero communities like Pittsburgh and Antioch. That aint SF by any measure.

By: Marc A. Meyer

Marc A. Meyer — Fri, 24 Jul 2009 16:36:41 +0000

Interesting. Curious about when the against which you measure occurred respectively for each of these categories. How do the deltas change of measured from each of those points respectively.
I buy your analysis that people are being priced out of even a 100k difference in equivalent capacity housing.

By: "Dave"

"Dave" — Thu, 23 Jul 2009 18:30:28 +0000

I don’t think that your inference is correct. You are saying that the price for a given condo has held up better versus the price for a given SFH but you make a common error of ignoring the mix of homes that make up the median. You simply cannot compare the medians of two data sets in this way and form a statistically valid conclusion.

What I suspect is that a ton of SFHs (perhaps from Bayview?) have been skewing the SFH mix for some time now. To truly validate your conclusion, you’d have to use datasets from Case/Shiller or OFHEO, which compare repeat sales of the same property… Sorry.