patrick.net

robertoaribas says

cool! I can use this in my "bad graphs" statistics lecture! Thanks!!!

Great idea! I also found it useful to include negative examples in teaching material as well as positive.

They are trying to show that the medium house price is part of a bigger conspiracy theory. It is some god-like realtor just drawing a picture of a butterfly. There is no real economics behind it. Looks like the picture is no completed, so what now? Uh Oh.

California Association of Realtors-No hidden agendas here?

What's interesting is the table on the left which shows home prices have incresed 12 fold over 40 years.
Real estate was, is, and always will be the best investment ever.
In the long run the bears are always wrong.

I think it means "grab your ankles, you are in for a sales pitch".

Raw says

In the long run the bears are always wrong.

Nobody outlives inflation.

ChrisKolmar says

What does this graph even mean?

good question, it's needlessly confusing.

Raw says

What's interesting is the table on the left which shows home prices have incresed 12 fold over 40 years.
Real estate was, is, and always will be the best investment ever.

In 1970, a Mustang Boss 302 cost $3,700 and a 2013 model costs 42,000 (11 fold increase). In 1970 the Dow Jones was 800 (17 fold increase). Housing is somewhere between new cars and the stock market.

Oh and if you had the foresight to stick new 70 boss in storage you could sell it for $80k today easy.

So I think we figured out what it's showing. The thing on the right depicts how much the median home costs based on the length of a ray. So the longer the ray, the higher the median price in that year.

So yea.. it says everything the chart on the left says, just 20x harder to understand.

For the right half, the angle of each ray indicates the year (straight up == 1970, each year after 1970 is approximately 4 additional degrees clockwise, until you end up with 2012 straight down). As you say, the length of the ray indicates the median price.

This graph is BRILLIANT. How do you indicate that prices are on the rise when your own data indicates that within the last decade the median price was 75% higher than it is now? Easy, highlight only some data points. How do you present this graphically, when a straightforward graph will immediately show the recent drops? Not so easy, but still possible: instead of presenting a normal Cartesian coordinate system graph (X-Y), use a polar coordinate system.

I'm staying with my butterfly theory. However, now I think it is a dead butterfly. They just sprayed it with hardener to give it the appearance of being alive. Once you sign up for the 30 years of payments then they reveal to you that it is actually dead. ;)

It means: now is the time to buy - call your friendly agent now!! House prices can only go up! ;)

varmint says

ChrisKolmar says

What does this graph even mean?

good question, it's needlessly confusing.

Raw says

What's interesting is the table on the left which shows home prices have incresed 12 fold over 40 years.

Real estate was, is, and always will be the best investment ever.

In 1970, a Mustang Boss 302 cost $3,700 and a 2013 model costs 42,000 (11 fold increase). In 1970 the Dow Jones was 800 (17 fold increase). Housing is somewhere between new cars and the stock market.

Oh and if you had the foresight to stick new 70 boss in storage you could sell it for $80k today easy.

Most cars don't appreciate like the Mustang Boss. Besides, unlike a house, you can't live in a car.
6% annual compounded for something you need, along with tax benefits is just unbeatable. For the average Joe, real estate is the best and easiest way to accumulate wealth.

Raw says

unlike a house, you can't live in a car

Raw I wish you could just shut your big YAPPER!

You could also throw up a chart of prioces since we went off the gold standard. Or the devaluation of the dollar since the Federal Reserve was created a century ago(a 95% loss). Your chart is just reflecting the dollar has lost its value and government lies about inflation.

And while your homes selling price has increased so has the cost of most goods. Suppose prices go back to their bubble highs. But milk is now $30 a gallon. A loaf of bread $20. You think you sold your home at new highs, but the dollars exchanged bought you less than you could just a few years prior. Your chart also doesn't take into consideration the input costs of owning a home. How much money was extracted via property taxes, insurance, hoa, new roofs, heating/cooling costs, lawn mowing, vegetation, commute time to work?