3 ms·
But not all paperclips are the same and not all crude oil is the same either? We sort of pretend that they are for the purposes of price comparison. And realto
by _ea1k 3y ago
But not all paperclips are the same and not all crude oil is the same either? We sort of pretend that they are for the purposes of price comparison.
And realtors do the same with houses. Have a home on the noisiest street in your neighborhood? NP, all the realtors will use comps that favor their preferred narrative anyway. Why would you get to pay less for that when that other house is available? Comp sheet doesn't say anything about traffic noise.
Rightly or wrongly, real estate largely gets treated like a commodity.
It is just a commodity where the cost of transactions have been highly optimized in the wrong direction.
- infecto 3y agoThis is exactly what I was getting at. Unless you are pricing a unique home in the $1+million (not considering NYC, SF and other expensive markets for this price) they really are a commodity for pricing purposes. Those boutique homes on the other hand have a very limited buyers market and there is much more marketing and presentation involved to create a narrative, both with the seller and the buyers agent.
- genericresponse 3y agoPaperclips and Crude Oil value, relative to another paperclip or barrel of oil, can be based on well-defined, finite, measurable standards that can be measured indeterminate of their location. That allows pricing to be indexed based on location, time, and quality relative to the standards. A house's value relative to another house is an almost infinite number of variations of measurable and immeasurable variables. One example-- Traffic noise. Maybe the amount of noise is an issue for you, maybe the time of day of noise is an issue for me, maybe noise in one room vs. another. Moreover, there are very expensive switching costs for me