Abusing statistics?


Fountain family eking out a supplemental income

Russ Pruner, a terrific fellow and a realtor I really respect, writes to complain that I’m cherry picking sales in this column, highlighting low-priced sales and ignoring “reality”. Here’s what he says:

[T]o date both MLS and direct sales that have sold in 2009, as of close of business today, for the entire market are selling for 11%, on average, below their 2005 full value – not the 30%+ you keep telling your readers. The median sales price is 14% below the 2005 full value that the Town of Greenwich placed on a property. I agree some properties have sold at their assessed value or less but many more properties have sold for well above their 2005 assessed value not to say their 2005 full value – 24% of all the properties sold in 2009, both MLS and direct sales, have sold above their 2005 full value. Maybe properties in the future do sell at their 2005 assessed values, you nor I, will know that until we have the sales data to show it – by then you will be talking about 2010 assessed values not 2005. Right now though the majority of the market is still selling a good 15-20% above where you are telling you readers.

Whatever. Russ and his firm have a ton of listings to move, and naturally he wants to get the best price for his customers. So do I, but I’m representing buyers. We have different objectives. There are indeed many houses selling for more than their 2005 values – I’m reluctant to point them out because I couldn’t do so without wondering what kind of sucker would pay that much and who the hell did his agent think she was representing? Giving in to such dark thoughts would just lead to even more grievances filed against me.

My buyers are looking for bargains, and the point of my writing these days is to highlight those bargains, to demonstrate to buyers that there are some excellent values available and they are in fact selling. Russ says the average house has only dropped 14% below its 2005 value, which is great, if you’re a seller. And if you want to pay what Russ and the greater pool of Greenwich realtors thinks is a proper price, by all means, give him a call – he’s got lots of homes to show you. On the other hand, there are other houses, just as nice, going for far less, but your realtor has to look for them, rather than shield his eyes and insist that every house is the best-priced home on the very bestest street in the bestest neighborhood in Greenwich. Russ doesn’t do that, by the way; many of our competitors do, though, and while Russ, because he’s such a nice guy, defends them, I’m not and I don’t. I think if you pay anything close to 2005 values today you’re a chump and a fool and an agent who pushes you to pay that much is not serving your best interests.


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24 responses to “Abusing statistics?

  1. Helsa Poppin

    Even if CF is providing an overly bleak (or rosy, if you’re a buyer looking for a bargain) perspective on Greenwich real estate, he’s the ONLY ONE doing so. His data may be cherry picked to prove his point (whose isn’t in an industry that is 99% hype) but it’s not made up.

    Prices are certainly headed downward and it’s good to get a picture of the properties that are at the front of the slide – are they newly built McMansions? Homes being vacated by people who are retiring? Foreclosures of properties bought three years ago? These are the kinds of specifics that gradually emerge when you consistently read Chris’s blog.

    Pruner’s mishmash of cold-comfort factoids (24% of houses sold this year sold above what they would have sold four years ago – does anyone else think that if this is the most optimistic spin that we are in worse trouble than we thought?) are given not to inform buyers or sellers, but to throw stardust in everyone’s eyes in an effort to prevent the market from grinding to a commission-free halt. Frankly his posts to you sounded a bit desperate or at least vexed. He’s free to have his own blog highlighting the wonderful properties that have held their value amid the downturn, rather than attempting to further modulate your voice (don’t think readers haven’t noticed how you have been much more circumspect in your comments about overpriced properties in the past few months).

    The fact is, there is no reason that a tiny piece of land on a noisy street bearing a junky old house without a view of anything in a town 30 miles away from the urban area a good portion of its working residents need to commute to in order to earn the living necessary to support it should cost 20 times what the average college-educated American earns in a year. No reason other than collective delusion and faith that there will be upcoming generations of greater fools with very high-paying jobs.

  2. gideon fountain

    Boys! Boys! In the immortal words of motorist Rodney King, “Can’t we all just get along?”
    Chris, as a buyer-broker, you can do your best to get bargains for your customers and Russ, when representing sellers, can do HIS best to get the highest price. But there’s no sense insisting that someone’s a “chump for over-paying” when he pays more than some arbitrary assessment-multiple formula indicates.
    Chris, if you stamp your foot and shout “Over paying!”, you’re just as silly as brokers who cling to some ridiculous INFLATED view of what a property’s worth. These are all arms-length transactions between consenting adults. Why not just report the numbers as they appear and let all those consenting adults out there make up their own minds?

    • christopherfountain

      Because, beloved brother of mine, the real estate “professionals” in this town have been hoodwinking and hornswaggling buyers for years, assuring them that everything is perfectly priced (see, eg, Board’s insistence on showing a “listing to selling ratio” of 96%, for decades, because they use the last, desperate price rather than the wildly optimistic first price). Buyers are catching on and I’m having fun helping them do that. An informed consenting adult is indeed entitled to make up his own mind as to the respective value of different properties. One who has been lied to by his trusted agent is not, I submit, “informed”.

  3. Stanwich

    Ooooo, I think he just called you a liar!! Let’s have a tag team smack down: Foutain/Lavery vs. Pruner/Tesei.

    I heard you fight like a girl, like a little girl (not a big like Tamar or Jean).

  4. Gideon Fountain

    Methinks ye underestimate the typical Greenwich buyer. They are hardly babes-in-the-woods. They take the words of their “trusted broker” with a grain or two of salt. It’s touching that you wish to protect these sophisticated folk but maybe, just maybe, you are over-estimating the power of real estate agents to trick these, uh, simpletons into “over-paying”.

    • christopherfountain

      I have clients who still burn over their original broker who, when they first came to town, sold them a house in NOPO without ever mentioning the stigma attaching to that area. A long time resident, merely moving up or down the food chain,probably will know enough to ignore his agent’s blandishments. Others, not so much.

  5. Gideon Fountain

    Knowledge of the various neighborhoods and their various “stigmas” is indeed something that comes from living awhile in any town BUT, we’re talking here of prices. I contend that no broker has the power to convince a typical Greenwich buyer to over-pay. Even in the bidding-wars of yore, it was the buyers’ competitive instincts that drove them, not the silver-tongued urgings of the sly, manipulative, Machiavellian real estate broker!

  6. Stanwich

    CF, stop being such a snob. By NOPO, I think you mean the area north of the Post Road in Riverside, right? Even though I don’t live there, it is a perfectly nice place to live and raise a family. As are other areas around town. What stigma are you talking about? I can think of many other areas around town that have far bigger perceived negatives (such as areas in Western Greenwich). Just because you and the RYC chardonnay crowd don’t like it, doesn’t mean it isn’t a viable option — and a good one at that.

    Wake Up! The world doesn’t care about Owl’s Creek like you do. In fact, most people in Greenwich have no effing clue where Owl’s Creek is. For all we know, it is probably the made up name concocted by a middling real estate broker with too much time on his hands.

    • christopherfountain

      Stan, calm down! I overstate things here for effect and to get a rise out of readers like you, but do keep your blood pressure down.
      Where’s Owl Creek? Sounds like my kind of place.

  7. Cos Cobber

    NOPO in Riverside has a stigma CF? Sure a few of the streets are unattractive, but to generalize that this broad area with many $1.5mm homes has stigma is rather harsh. The Cove section of stamford has stigma, the Bronx has a stigma. The NOPO stigma is a millionaires problem and a small one at best.

    I understand what your are saying, that NOPO is less attractive than other parts of the town. But I dont think newcomers lamenting their $1.5mm purchase should feel they have a scarlet letter tied to their address. Geez Whiz, stake a step back…

    And what kind of friends does one have if they feel they are being disrespected by virtue of living in NOPO? Stigma CF? Poor word choice…

  8. FlyAngler


    You have railed against that 96% of offered price statistic many times and I get it. Using the last offered price after one or more price reductions is certainly misleading. I am with you there.

    However, I take issue with your seeming suggestion that the ratio should be based on the original offered price. In headier days before the crash, many owners would “list” their homes at absurdly high levels in the hope that some fool would come along and provide them with a windfall. The Zillow “make me move” concept. Anecdotally, I have seen this with the nearly retired set who wouldn’t nind selling “at their price”.

    My issue is why you insist that such pie in the sky asking prices be the basis for the sale:ask ratio? As you have noted, such homes are not REALLY for sale, so why then insist that those unrealistic prices be used by the Realtors?

    Obviously, the useful measure over the years would have taken a more realistic, market-driven asking price into account. Then the ratio would have somewhere below 96% but above the tainted number using those out of the market asks.

    It’s too late now but I think we can all agree that there is some number below 96% that is operative.

    BTW, you never addressed my question on your opinion of Zillowestimates in our market.

  9. Anonymous

    Intelligent consumers can hire decent advisors, review plenty of pricing data on Net, get divergent anecdotal advice…but will ultimately make own decisions…and mistakes or eventual profits/losses

    Doubt any one advisor or blog or buyer or seller can really make a mkt

  10. XYount

    CF, Ignore all the dunderheads above who don’t seem to get your true worth.

    You may be slightly to the right of Attila the Hun when it comes to politics and holistic medicine, but when it comes to Greenwich real estate, you are the go-to guy.

    I grew up in Riverside way back when (during your era, as a matter of fact), bought my candy at Ada’s and sped down Summit–and Owenoke–on my bike (helmetless, of course) to buy loose-leaf paper at Cuff’s and dammit dolls at the Port of Call in Old Greenwich, or downtown, as we called it.

    I learned to ice skate on Binney Pond and to swim and sail at Rocky Point. I walked my dog to Tod’s every day. I had friends who lived in backcountry mansions and another who lived in what was then a shack by Ole’s. I went to Riverside Elementary, Eastern Junior, boarded at Sacred Heart up on King Street, and was in the first graduating class of the brand-new GHS.

    I remember Roger’s and Outdoor Trader’s fondly, and how aghast my mother was when Caldor opened its doors (“It’ll be like Korvettes in [gasp] Port Chester!”). I spent a summer working in the office of the Belle Haven Club when Peter Biondo was the manager, and a semester in high school teaching at Havemeyer Elementary. Our neighbors belonged to Innis Arden or RYC. My brother and his friends spent summers “loopin’ ” (caddying) at IA.

    Before I met him, my husband used to sneak into the Rosenstiel estate (now Conyer’s Farm) to swim in the pond. We rented our first place in Cos Cob, a stone’s throw from the deli and bike shop on Valley Road. Mianus Pond was where we swam (it’s a good mile up and down) and skated. We almost bought a house (it would have been our first) on Waterfall Lane ($180,000 in 1986), but headed north of Greenwich and south of those prices.

    The point of this nostalgic riff is: I know Greenwich pretty well. Or did. And while it’s changed a lot since those innocent days, it’s nice that there’s someone putting a little reality back where it belongs. Keep it up.

    And yes, IMHO, NOPO does have a stigma, still.

  11. Cobra

    XYount: I couldn’t summed it up more eloquently and accurately.

    I agree, what this town and its residents, current and prospective, need is more “Chris reality” and less “PC fantasy.”

  12. Cal

    As this is a blog to all-things Greenwich, I guess it is inevitable that a little snobbery has to creep into what is usually a very valuable exchange of great information. I grew up in (egads!) Chickahominy in the 1960’s, attending Hamilton Avenue and Western Junior High, and believe me, I would not trade those experiences for anything. Also caddied for 11 yrs at Round Hill Club, that great citadel of ethical business people.

  13. Retired IB'er

    The very fact that ole Russ responds the way he did suggests to me that Chris is speaking the truth and is finally having an impact…

    Congratulations, Chris, you’ve gone mainstream and your fellow brokers can no longer simply dismiss you as a quack (which of course you never were).

    You know you’re on to something when the competition, like Shakespeare said, “doth protest too much”.

    Keep up the good work.

  14. HG

    Arguing over the discount to asking price, and which asking price, misses the point. What is it worth? As we have seen, nothing is actually “worth” an amount simply because that is the price where buyer and seller agree (otherwise there would be no sad people who bought in 2007). The real question is whether you are buying at a price where you are likely to get normal returns meaning the rate of inflation, something better or something worse.

    It has been suggested on this blog that the current market price for a typical home lot in Greenwich is $2 million and that replacement cost for high quality homes is approx $400 per square foot.

    Hypothesis: if you buy an average Greenwich home today for a price below $600 per square foot, the implied price you are paying for the land is so far below current market prices that you are likely to earn above average returns.

  15. Cherry Picker

    This is more what you’re doing.

  16. anon 2

    NOPO has a stigma? Crap, then I’m backing out today of my pending purchase there of a 5000 sq ft. home for $300K. Whew.

    Gideon’s comment about Greenwich buyers being so sophisticated is highly amusing. I liked the guy who posted on this blog in the past day or two bragging about his low rate ARM resetting down this year. The fact that anyone is an ARM in this historically low rate environment is astounding (unless planning to sell in next two years). Yeah, everyone in town is a real genious, especially the trust fund kids.

    Chris provides some useful facts and comments. They are often skewed to the downside, but that should be obvious to everyone and they can factor it in accordingly. My own view is that high lingering unemployment, higher taxes, higher savings rates, and most importantly increasing mortgage rates (and resulting defaults/foreclosures for ARM borrowers) are all going to push prices down further this next year or two. Bonuses may be good at Goldman and a few other firms, but that will be a small sliver of the population in the area.

    It is good of Chris to post Russ’s comments so that his views are also seen and can be considered by everyone. The more info the better, which is the basis of any efficient market. Chris rightly points out often that RE agents try to prevent the flow of information.

  17. Cos Cobber

    I’m not looking to play PC or even pretend.

    I just disagree that there is a stigma to living in NOPO. Stigma isn’t the right assessment of the situation. Instead what exists is plain snobbery. That I can accept. Its Greenwich after all, snobbery is a way of life around here. I knew that when I came here a decade ago and it hasnt deterred me since. If you stick your nose up at NOPO because you can do better, then thats perfectly fine. But to say there is a stigma, thats overly harsh.

    We we have here is the top 1% of society looking down on those in the 1-3% bracket. This is a stigma that only the top 1% perceive. Ask someone in East New York about stigma, they will tell you the nation see’s theirs.

    • christopherfountain

      CC, “stigma” was a deliberately provocative term used just to keep the pot boiling. But that said, there is no question that NOPO sells for less than SOPO, and the agent who didn’t point that out to her out-of-town buyers did them a disservice. They thought they were comparing apples to apples, not apples to road apples. (There I go again!)

  18. XYount

    “Road apples.” bwaaah!

  19. Cos Cobber

    NOPO vs SOPO is certainly apples and oranges. I feel bad for anyone who was not told otherwise for they were completely mislead. But NOPO is not MottHaven or Bed-Stuy. If it has a stigma, its a stigma between the tippy top and those a few steps below. After that, no one else sees the stigma.

  20. Arouet

    I grew up in lovely Owensboro, KY. The whole rest of the world has a stigma if you ask me. Just kidding. Not really.