As for 50% off, depends what your starting date is and your location. 50% off from a 2005 price in Manassas is a piece of cake.

Thanks for backing up my back of the envelope blog and stats. I really wish those (Sweth) that knock it, will follow up with the “correct” way as I thought he proposed that he would.

Yes it takes time. This isn’t just spitting out numbers.

Contact me if you are ready.

Frank

Of of the previous comments, one from Sweth, questions the viability of you using week-to-week data to prove the downward direction of luxury home market. I happen to think that (any) sales is momentum based, and week-to-week data is a lot more indicative than same-time-last year data (or other commonly used data). So I definitely agree with your use of such data.

And I will add my 2 cents. If I were to buy a $ 1 million home today, and pay down the first 20%, borrow the rest 80%. Assuming I have excellent credit and no other loans, my monthly payment would be $ 5K, plus $2K for tax, insurance, HOA & maintenance (I used 6.5% jumbo rate). This $7K/month obligation will require $ 25K a month gross income, or $ 300K/year, to support it.

How many DC (or nationwide) jobs pay $ 300K a year? And how many banks are still willing to offer no-income requirement loans?

And getting the first $ 200-250K for down payment is a real stretch now, since most people's 401K have evaporated, and/or their existing homes/equities also evaporated.

Sure, there are some already rich people with enough liquid money to buy (without borrowing). But they probably have nicer homes, in nicer neighborhoods, or have way better ways to invest their money than a sinking asset.

Too bad sellers and their listing agents are still drinking toxic Cool-Aid, thinking someone with lots of cash or making $ 300K/year will come to their rescue. I will tell you this, I don't make $ 300K/year, but even I am smart enough not to rescue anyone with my hard-earn money, and I expect a lot more intelligence in my $300K earning brethens.

What I think will happen? I think banks will take over almost all of these assets, sit on them for a long while (because bankers still get their paychecks regardless), and get the government to write a check to wipe out all these non-performing loans (dollar for dollar). And it's too bad us taxpayers will eventually and inevitably pay.

Don't believe me, look at Japan and how it never recovered from its real estate bubble (even after government wrote checks to banks). And just think, Japanese save way more than us Americans and still can't save themselves, so how can Americans save ourselves, now that the world no longer trust our credit worthiness (especially in real estate).

Sorry for the long post. And thanks Frank for providing a great service.

Thanks

Frank

Just wanted to say thank you for your blog! Using tips from it that we implemented, we were able to get the full list price for our house including no closing help for the buyer. In fact, we got 2 identical offers on the same day last week.

We hired a stager like you recommended and our realtor took some great pictures. But we spent a lot of time this summer making the house look beautiful, painting some neutral colors and fixing up some old projects. Our house has never looked better.

So much of my research for homes has been done using franklymls.com – it’s a great tool! If you ever start selling homes in the Baltimore area, let me know! I would make sure to recommend people to you! I love how technologically advanced you are, and the creative things you are doing. I thought on numerous occasions, “if only Frank sold homes in the Baltimore area!”

Here’s our listing, you can see from the pictures how great our house looked! http://franklymls.com/CR6868745

Now we have to find a house!

Thanks!

I didn’t do the math myself because I didn’t have any particular question that I needed answered by doing the math, and like you, I’ve got lots of other things on my plate.

If you’d like, I’ll try to make some assumptions about the question that you’re trying to answer, and pull the relevant MRIS data and post something showing how to more meaningfully approach it. The math involved is actually not very time-consuming at all, so hopefully I’ll get a chance to do that this week. (Gotta file taxes by Wed. first, though…) One thing you could do to help would be to explain why you chose those sub-week windows, vs. comparing full weeks.

I can’t imagine a week to week variation down 50% having anything to do with seasonal (yes, maybe as we go into this season there might be a 5-10% drop, and therefore my 50% number is more like 40%)

It is a huge time commitment to gather data (not just regurgitate generic reports from MRIS). So I was willing to give it two hours and that is that. Gotta sell real estate and go to law school.

Yes it would be more ideal to pull the Sun-Wed of years before, to see if there happens to be a 50% drop in the second week of Oct. In case people like to put in offers (not closings, but offers) at the end of the month. I doubt it, but I love being proven wrong.

Please do. ;-)

Frank

I suspect that even w/ the seasonal variation, the numbers would show a drop-off, but it’s still a necessary step; you can’t draw any meaningful conclusions from the numbers as you present them.

(Also, out of curiosity, why do you only look at those sub-periods of the weeks in question?)

So does the stock market drop affect you?