down outlier for 300_mercer

Another one, same building:

http://streeteasy.com/nyc/sale/573281-coop-101-west-23rd-street-chelsea-new-york

2005: $547K
2012: $315K

Landlease

Inonada:

1. the data you are reporting do not reflect movement in market pricing
2. but rather different market valuation of the building because of its land lease

3. in 2007 there was almost no popular perception of the risks if land lease coops
4. and apartmens at 101 priced like ground-owning coops
5. also over time they become less valuable as their lease terms come closer to expiration

6. so what you are looking at is really not a down market outlier but the re-pricing caused by
facts cited in numbered paragraphs 1-5

I was once showing a sublet in this building many years ago. The door was stuck, so I gave it a good push. It folded in half down the middle long ways. Clients asked if it would be replaced (from out of town).

3. in 2007 there was almost no popular perception of the risks if land lease coops
4. and apartmens at 101 priced like ground-owning coops

e. Thus the lower price outlier.

6. Nuff said

Keith LOL.

ali

How does SE determine an outlier to its index?

300_MERCER:
You dirty, low-down skewer, you!

Land lease = depreciating property and not a part of street easy condo index. If there were to be a coop index, should not be part of that one either. Most appreciation in property prices comes from scarcity of land.

Truth, haha

300_mercer: I know. Agreed.

All we need is some bpc examples. Not sure if they are included in se index, but they should not be. Nada, how about posting cove club?

300mercer:

1. please dont mock inonada, or for that matter other sincere posters here
2. this forum is supposed to be for the exchange of ideas and information

3. even if inonada has drawn the wrong conclusion from her data, we have all
done so ourselves on different occasions; I iknow that I have

Even worse, the land lease ends in 2044. That means as 2014 approaches (the 30 year standard fixed mortgage period) no bank will loan on the building.

inonada: do your home work before you put stuff like this up. it does you no service.

rb, Nada is too smart and secure to feel that I am mocking him. I enjoy his posts. I was merely saving him some work on where to look for down prices.

1. 300 does not intend to mock
2. we are always exchanging ideas and information
3. okey-doke!

^^^He wasn't talking to her. He wasn't talking about her.

It's 11:40 EST.
He's still up, trolling on streeteasy for a fight. Within a minute of my last comment being posted.
Nothing better to do.
He's just a drunken retiree with no social life.
Waiting, watching and hoping for me to post a comment. Any comment.
He'll be waiting, watching and hoping here for the rest of the night.

Sybil, the oracular seeress.

Geez, we have some seriously dense people here. Let me reiterate what I said:

>> My point is not that this is indicative of the market. Rather, it is a counter-example to your view that all outliers are to the upside, thereby skewing the SE index.

The SE index is constructed from repeat sales, but they exclude 3-sigma outliers (ones that have price changes that are very unusual). They exclude purely based on price, nothing else. That is what they told 300_mercer from a post a few weeks back.

300_mercer posited that outliers only occur to the upside, thereby skewing the index down. Putting aside the issue that this skew could not amount to much, I was posting this as evidence of down outliers that SE's methodology must be excluding as well.

>> All we need is some bpc examples. Not sure if they are included in se index, but they should not be. Nada, how about posting cove club?

How can you not know? Read the response to your own post. I don't think SE has a person on staff who goes through buildings one-by-one and applies some semi-random criteria. They simply exclude at the 3-sigma level.

http://streeteasy.com/nyc/talk/discussion/33893-question-for-streeteasy

In their own words: "Anything that fell outside 3 standard deviations was considered an outlier."

>> I was merely saving him some work on where to look for down prices.

WTF? Here's what you were saying just two weeks ago.

"Does it mean that streeteasy index is understating the recent increases as large increases are being thrown out? There are no large decreases (at least I could not find them) which are outliers, to offset them."

>> the data you are reporting do not reflect movement in market pricing

Well that's the damn point, innit? We're talking about a quantitative methodology that attempts to remove outliers that do not reflect market pricing. A building losing its land lease would be one such example. An apt that had undergone a renovation is another. An ideal system would get rid of both always & perfectly. The system in place is imperfect, but there are things that should (and do) get kicked out in both directions.

>> please dont mock inonada

I appreciate the defense, but as you can see I don't mind a little smack-talk in our collective conversations ;).

Removing outliers: since you can't go below zero, but you can have an unlimited price increase, are any sales to the downside removed by applying the 3 standard deviation test?

The construction of the index is done in log space, so the thing you are stating does not happen.

Is that what they said? And how does it matter - prices naturally can't go below zero limiting the possibility of an extreme outlier to the downside.
Can prices even go near zero - will a foreclosure kick in first?

In their methodology paper, they clearly spell out that fit the index using ln(price_at_sale_2 / price_at_sale_1). You need to do this so that a 2x sale followed by a 0.5x sale of the same property returns you to a flat price end-to-end.

For outliers, this means that if the market went up 2x over some period, then a property with a 4x resale is just as much an outlier as one with a 1x resale.

inoitall, 300_mercer never replied to you - do you think that's because of all the money he's losing?

300_mercer?

300_Mercer?