It was pointed out that Russ Winter used a Craiglist example of a local condo for sale or rent to expose the hyperreality of housing in Ventura County. Sure, housing here is in the hyperreal zone but Mr. Winter omly succeeds in revealing the folly of letting your conclusions drive your data.
http://wallstreetexaminer.com/blogs/winter/?p=442
Where he writes: Let’s take a hypothetical (and perhaps fictional?) young couple making 25% above the Ventura median or $60k.
Truth is 25% above the median is $105k and even that is quite misleading as the demographics here don't have medain earners pursing the median home which is closer to $560k anyway. Normally at this point I'd go through a lengthy rebuttal and vivisection of Winter's assertions but when he makes a mistake of that size the rest would just be cruelty.
10 comments:
1st again! I rule all.....
Interesting article, Rob, and I'd like to comment, but I'm taking some time off at the beach and trying to stay offline. More later...
ok, I'll bite. how do you actually calculate the "true" median for coastal CA (Orange county or SF bay area). I know the gov't numbers are skewed low because they count the 1/3 of the population that is "dysfunctional" (chronically unemployed, one step from the homeless shelter. kinda like the "honest" versions of Casey).
so, probably the "true median" should be the median of the upper 2/3's.
From my experience, any household under $100K gross would have a rough time in the SF bay area. and that's just a husband and wife, no kids.
For $100K combined annual in the bay area, you get maybe the occasional macaroni grill or jamba juice, a couple of beater cars, and pleasure of renting a "decent" 2 bedroom apt not next to a crackhouse or meth lab.
Not sure how people do it on less. and afford to do anything.
Also remember that the median income doesn't include all of the illegal day labor workers. That would hammer the median down quite a bit I'd think. Maybe that's how he came up with $60k
@ Rob
I don't quite understand what your objections are to Winter's article; I read it and it seems quite reasonable.
Winter is responding to a VenturaCountyStar.com article in which a financial planner claimed that young people could easily afford a home if they just economized (e.g. stop going out for meals or to Starbucks). The VenturaCountyStar.com article also stated that the median income in Ventura county is around 47K.
Winter is simply arguing that a young couple making 25% above the median income stated in the VenturaCountyStar.com article would be very hard pressed to afford a typical home in Ventura county. He uses the Craigslist listing as an example of the kind of starter home a young couple might buy.
I'm not a Real Estate expert, so I don't know if the rest of Winter's calculations or figures are correct; but I do think it's reasonable for him to use the 47K figure as that is what was stated in the VenturaCountyStar.com article, and he is essentially responding to that article.
Moreover, the Winter article is essentially attacking the optimism about Real Estate affordability displayed by the financial planner (and RE professionals) and the way the MSM simply buys that optimism unquestioningly. Given that, I'm surprised you would object so vehemently to Winter's article. Am I missing something here?
When Winter gets all his facts and assumptions qrong he damages the credibility of all of us who are on the same side. When your guess as to the median household income is off by 80% any subsequent "conclusion" is suspect. Doesn't matter or perhaps maters more that I agree with those conclusions, sloppy analysis is sloppy analysis. All Winter and or the Star did was "wiki" for household income instead of the 4 clicks necessary to get the true(r) census data. Then they just ran with it, not bothering to see if there were any special demographic considerations. There are.
The way to answer the dangerously optimistic Star article is with facts not unreference conjecture.
@ Rob
But, did Winter get all of his facts and assumptions wrong? So far, you've only argued that the median income number he cited was incorrect.
Actually, I still think its reasonable for Winter to use that median income figure, since it's mentioned in the VenturaCountyStar.com article. The Ventura County Star is a Ventura County newspaper and it's reasonable to assume that they would know what the median income in Ventura County would be. Winter doesn't live anywhere near Ventura County, so it would be difficult for him to know whether that estimate was reasonable or not. I mean, we can't double-check every single fact we use, sometimes we have to take our sources on good faith. That doesn't work out all the time, but the alternative seems impractical.
In addition, Winter doesn't really need the "real" median income figure. Winter is arguing that the financial advisor quoted in the VenturaCountyStar.com article is mistaken in his optimism. For that purpose, it's better for Winter to use the figures in the VenturaCountyStar.com article as, presumably, those are the figures the financial advisor had in mind when he made his comments.
Out of curiosity, I'd also like to ask where you got $105K as the median income of Ventura County? I've expended way more than 4 clicks but I haven't been able to find a source that makes that statement. In fact, the US census bureau states that the median income for Ventura County in 2003 is $57,864.
@ Rob
I'm the Anonymous who posted at 9:40 AM. Just realized that I made an error: you stated that the median income for Ventura County was 84K, not 105K.
Going with that, I found a couple of MSM articles using 79K as the median income for Ventura County. Weirdly enough, one of those was a venturacountystar.com article; the other was a latimes.com article.
I'd still like to know what your source is though. I'm assuming that it's more authoritative than a couple of newspaper articles.
I'd like to reiterate that even if the 47K figure is wrong, it's still reasonable for Winter to use it since he doesn't have any reason to doubt the figure. I mean, obviously he doubts, in other ways, the venturacountystar.com article in which it appears, but he has no reason to think that they would get such a basic fact wrong.
Glad to see you doing the due diligence around my complaints. I'll give you the full answer you deserve but I have a few deadlines to meet. Apologies but it may take a few hours.
Although the median number I used in the post of 47K was from the newspaper article , the Median household income in Ventura County is reported as $57,864.
http://quickfacts.census.gov/qfd/states/06/06111.html
The example I used was a $419k property well below the $560k median price. I have simply changed my post to read 105% of household median income, but my point clearly still stands. They would be spending half their income on a property that is 75% of the median price.
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