Posted by: Timothy Ellis (The Tim)

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

53 responses to “Non-Distressed Median Up Less Than 553 From 2011”

  1. SkiAddict

    Can we get this chart extended back to the peak (2007), or even earlier?

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  2. Bob

    What is the average King County household income?

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  3. Pegasus

    RE: Bob @ 2 – North or south of I-90?

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  4. Kary L. Krismer

    By SkiAddict @ 1:

    Can we get this chart extended back to the peak (2007), or even earlier?

    The NWMLS didn’t start classifying listings as SS or REO until maybe 2009, but in any case it’s probably safe to assume the percentage of such transactions was relatively small back before 2008. For one thing, flippers were buying properties at foreclosure auctions.

    But it would be nice having a chart with just the non-distressed median going back as far as possible, and then the normal median going back further.

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  5. Kary L. Krismer

    Funny when I first started discussing the non-distressed median, Pegasus, Macro Investor and Jonnes were all over me as trying to cherry pick the market.

    http://seattlebubble.com/blog/2011/02/04/nwmls-prices-inventory-fall-sales-slowly-climb/comment-page-1/#comments

    (Start post 28, and post 29 and 46 are good examples.)

    Now when you need some explanation as to why the median didn’t go up 20%, looking at the non-distressed median is not controversial at all! ;-)

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  6. Kary L. Krismer

    Searching for the last post, I also found this:

    http://seattlebubble.com/blog/2010/12/06/nwmls-closed-sales-still-in-the-gutter-median-price-falls-to-a-new-post-peak-low/#comments

    Post 8 has a complaint about inventory back in 2010. We’d kill for that lousy inventory today! :-D

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  7. Pegasus

    RE: Kary L. Krismer @ 5 – Hmmmm. My point was that you were trying to cherry pick the market by selectively omitting a large portion of the market and you were. Ah the truth hurts.

    “Why would we want to exclude a large and increasing part of the market? One only does that if one is trying to rig the figures in a more favorable and less truthful way. The market is what it is, not what manipulated figures say it is.”

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  8. corndogs

    RE: Pegasus @ 7 – The point you were making is you were a dipstick. Kary learned you a little bit of schooling, that’s all. No reason to be ashamed. Just talk a little less, you should be fine.

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  9. Kary L. Krismer

    RE: Pegasus @ 7 – Hardly. I explained why I did that back then. If you were not selling an REO or a SS, those sales meant very little in most areas. The exception would be where those sales totally dominated the market, but that was never true of King County as a whole. Also as noted in that prior thread was another point I raised–the seasonal impact of REOs and short sales, which tended to sell at constant nominal rates, thereby driving down the median in the slower winter months.

    Just as an example of when short sale listings might be important, in 2009 or 2010 I was looking at a property up in Snohomish County. It was a stand-alone condo form of ownership, and the only development of that type in that particular area. I don’t remember the age, but let’s assume 2006 or 2007. Every active and recent listing but maybe one in that development was a short sale or REO. In that type of a situation those sales would be very important. In most other situations they are practically irrelevant because the short sales weren’t really much competition.

    In contrast, prior to 2008 new construction was hardly relevant to pricing resale houses. New construction sold at a premium, so you could ignore it entirely when pricing houses up for resale. But that changed in 2008 with the overbuilt inventory, and then even later with builders picking up land “dirt cheap.” Even though new construction remained a very small percentage of the market, you could not ignore it in pricing resale listings. The reason for the difference? Being new construction didn’t have the same negatives that being an REO or SS had, and the negatives it had wasn’t seen as many as being all that major.

    Finally, yet another important point. If you look at the distressed median, it really isn’t down that far. There were only six months where the median was over $450,000, and Tim has it at $430,000 today. That’s pretty insignificant, but it doesn’t mean that prices have only fallen that far. If you owned a 1.5- bathroom house in Skyway your values have probably fallen 50% or so. Again, the countywide median is pretty meaningless. For those properties you need to exclude 1.75+ bathroom houses. Doing that is not cherry picking the market, it’s understanding the market.

    It really has to do with understanding statistics and the market. Even before that post I had been following the non-distressed median. Note I said it had been at that level for quite some time. That data was important, just as it’s important today. I understood that back before that post, which is why I’d been following the non-distressed median “for some time” back then.

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  10. David Losh

    RE: Kary L. Krismer @ 9

    A deals a deal, and all the statistics in the world doesn’t change that.

    The market mix is a snap shot in time. You can’t add, sub tract, or multiply the mix of properties for sale.

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  11. Kary L. Krismer

    RE: David Losh @ 10 – David, an individual deal has little or no impact on the median. So when you’re talking an individual deal, the median is irrelevant.

    As I recall David, you had a particular hard time understanding how the seasonal change in mix of REOs and Short Sales affected the overall median.

    Again, if you have about 200 short sales every month with a median of $330,000 and about 250 REOs with a median of $280,000, the median is going to be lower when the non-distressed sales with a median of about $400,000 are only 800 sales in December than when they are 1200 sales in June. That is simple math, and doesn’t mean a thing to the overall health of the market, but I had to explain that to you over and over an over. I was looking at that back then because understanding that was important to understanding what was happening back then.

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  12. David Losh

    RE: Kary L. Krismer @ 11

    The median, or market mix, or statistics are unimportant to each and every individual seller, or buyer. Statistics are the sales tools to get something to happen for the Real Estate agent.

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  13. Kary L. Krismer

    RE: David Losh @ 12 – No, you just have to understand which statistics are important and what the statistics really mean.

    For example, if your real estate agent tries to convince you to sell your property for X dollars because the median price in NWMLS area 360 has decreased 40% since you bought, and X dollars is .60 of what you paid, you need to know that statistic is not important to you at all. Recent statistics in a smaller area than the entire NWMLS area 360 for houses similar to your house would be relevant. That said, even using a smaller area and more specific type of house I would probably never compare two points in time and then apply a percentage based on the change.

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  14. softwarengineer

    RE: Bob @ 2

    Actually Bob

    When it comes to real estate spouting off how many $100-200K households are in King County is a moot point in general; much of this limited stock [the upper 5%] already owns a home, they aren’t in the market.

    The first time homebuyer is like the Y gen household income with two average jobs….NY Times documents the avg get hired pay now is $10.92/hr with only 28 hr weeks [mostly no benefits]. We not only need more QE subsidized zombie home lending rates in the 3% area, in Seattle we need less than 3% home interest to qualify the first time home buyers. The Gen X that got foreclosed or short sold will have to wait for their credit to mend to get back into the game, its not seamless for them either, and they have more experience and higher avg wages than Gen Y.

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  15. David Losh

    RE: Kary L. Krismer @ 13

    and a Comparative Market Analysis targeted to that individual is much more beneficial.

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  16. corndogs

    RE: David Losh @ 12 – “The median, or market mix, or statistics are unimportant to each and every individual seller, or buyer.” Wrong!

    Statistics are unimportant to a guy like you because you have no capacity to use the data to formulate a reasonable understanding of cause/effect relationships that govern the world you live in. Your mind is an infinite loop of simple and irrelevant relationships that are tethered to nothing at all meaningful. You will always be a drag on society.

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  17. David Losh

    RE: corndogs @ 16

    If this said, or meant anything it would be eloquent.

    The fact is you said nothing, but an attemt to insult me.

    What I’m saying is true, these are sales tools you find on websites like redfin to give people a direction, or motivation to buy now, or be priced in, or out, forever.

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  18. Kary L. Krismer

    By David Losh @ 15:

    RE: Kary L. Krismer @ 13

    and a Comparative Market Analysis targeted to that individual is much more beneficial.

    Assuming it’s done right, yes it would be.

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  19. Pegasus

    RE: Kary L. Krismer @ 9 – Blah blah blah. The fact that we have 3 percent mortgage rates is the only thing supporting overpriced houses besides baloney spewing real estate agents. If rates were at a normal 6 percent today those medians would be much much lower, capice? Trying to pretend that this is a normal real estate market when trillions are being spent to keep it from imploding is just plain nonsense. I guess I shouldn’t expect more from a blathering fool, should I?

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  20. corndogs

    RE: Pegasus @ 19 – ‘”If rates were at a normal 6 percent today those medians would be much much lower, capice?”

    HAHAHA – normal?… Is that because that was the interest rate when you first saw some hair on your nuts?….. talk about a blathering fool!… interest rates have been all over the map in the past. The Tim already showed us once before that 6% interest rates still leave houses quite affordable at today’s prices. It’s a factor sporto but it’s not everything..

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  21. Pegasus

    RE: corndogs @ 20 – The point loser is that 3 percent is a historic low for the rates for 50 years and 6 is a fair guess at the average rate during those years. On a 500,000 loan the payment on PI goes from 2000 to 4000 with rates at 3 going to 9. A huge difference in qualifying for a loan for most buyers. You really should remove that corndog before you hurt yourself and you have to see a proctologist.

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  22. David Losh

    RE: Pegasus @ 21

    Relax.

    The bigger problem with statistics today, other than what you already pointed out, is that we had a huge run up in pricing, by double digits, then the market crashed, then our government stepped in to prop up the Real Estate industry.

    There is nothing in the statistics that is normal for the past six years, and maybe longer.

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  23. Kary L. Krismer

    By Pegasus @ 19:

    RE: Kary L. Krismer @ 9 – Blah blah blah. The fact that we have 3 percent mortgage rates is the only thing supporting overpriced houses besides baloney spewing real estate agents. If rates were at a normal 6 percent today those medians would be much much lower, capice? Trying to pretend that this is a normal real estate market when trillions are being spent to keep it from imploding is just plain nonsense. I guess I shouldn’t expect more from a blathering fool, should I?

    Change the topic much?

    I would agree that low interest rates are helping prices. What’s that have to do with looking at the median for different market segments?

    Maybe I should try your approach?

    The sky is blue. You didn’t mention that, therefore your refusal to admit looking at the non-distressed median is absurd.

    That makes about as much sense as the quoted material.

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  24. corndogs

    RE: softwarengineer @ 14 – “We not only need more QE subsidized zombie home lending rates in the 3% area, in Seattle we need less than 3% home interest to qualify the first time home buyers. The Gen X that got foreclosed or short sold will have to wait for their credit to mend to get back into the game, its not seamless for them either, and they have more experience and higher avg wages than Gen Y. ”

    I like your story about the Generation Y and Generation X guys… it’s as simplistic as a Mother Goose bedtime story, not as good as the “Old woman who lived in a shoe” but pretty good…. if you add a 3rd character then maybe their porridge would be just right…. and it can have a happy ending.

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  25. corndogs

    RE: Pegasus @ 21 “On a 500,000 loan the payment on PI goes from 2000 to 4000 with rates at 3 going to 9″

    HAHAHA – now you’re talking going from 3 to 9?….. who said anything about going to 9, you androgynous meal worm? We’re talking about going from a little under 4 to 6. You said 6 was “normal”. Rates will bounce around below 6 for many years…. it won’t make a ratsass bit of difference… You had to pull some numbers out of nowhere to try to support your false premise, that’s typical for you…. Your new name is DeeDee. It’s a girls name which fits for you. It stands for “Dumb Democrat”.

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  26. David Losh

    RE: corndogs @ 16RE: corndogs @ 25RE: Kary L. Krismer @ 23

    Do you see the similarities here in the responses?

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  27. apartment boy

    This thread has me chuckling…after so many days without a mere peep from the sun, I’m feeling surly too.

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  28. ARDELL

    RE: apartment boy @ 27

    I think it’s a first for “MEAL WORM” around here. I kinda liked that part. Almost like a little ray of sunshine to see a good food fight on a rainy day.

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  29. Ron

    I couldn’t imagine loaning taking the risk for ONLY a 3% return…. I think anything up to 5% should be VERY LOW RISK…. Im thinking that about 60% of the population are not worth the RISK of lending at anything below 12%…

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  30. Kary L. Krismer

    By David Losh @ 26:

    RE: corndogs @ 16RE: corndogs @ 25RE: Kary L. Krismer @ 23

    Do you see the similarities here in the responses?

    So? We both noticed Pegasus’ argument style is to make up an argument the other side never made and then disprove that argument. That’s sort of obvious when it happens, and rather annoying, pointless and a waste of time. Since it’s so obvious, it’s not surprising both of us commented in the same manner.

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  31. Kary L. Krismer

    By Ron @ 29:

    I couldn’t imagine loaning taking the risk for ONLY a 3% return…. I think anything up to 5% should be VERY LOW RISK…. Im thinking that about 60% of the population are not worth the RISK of lending at anything below 12%…

    It would (almost) never happen without government intervention, not all of which is related to housing.

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  32. David Losh

    RE: Kary L. Krismer @ 30

    The comments are insulting, and without substance.

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  33. Kary L. Krismer

    RE: David Losh @ 32 – BS. Pegasus was wrong on the argument about looking at the non-distressed median. It serves a few useful purposes, and is not cherry picking as he claimed. Even Tim is now running a regular series on the non-distressed median.

    Because Pegasus couldn’t win that argument he change the topic to government influenced low rates affecting prices. That is something I agree with, and rather obvious, but not relevant at all to the issue of looking at the non-distressed median.

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  34. Pegasus

    RE: Kary L. Krismer @ 33 – Ha. I instantly recognized you were doing as what you do best, trying to rewrite history in your favor. It is still disingenuous to exclude large portions of markets to justify unreality. It is also disingenuous to pretend your fabricated numbers have any validity when the housing market is under huge manipulation and expense(trillions) to prop up prices and without that manipulation those numbers would be far, far different. If I offer to pay someone $5.00 for every dollar bill it must mean all dollars are now worth $5.00? Thanks for the nonsense. “Get your facts first; then you can distort them as you please” – Mark Twain

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  35. David Losh

    RE: Kary L. Krismer @ 33

    Nonsense, pure nonsesnse.

    In the Real Estate market place there are buyers, and sellers. The buyer is looking for a property to fit price, terms, and condition. Distressed, or nondistressed, the price is the price. If you pay a lower price for a short sale or foreclosure it’s for the inconvenience. The product is selling for that price so once the transaction is completed it is a matter of sales data.

    Now, you could make a significant case that if a market place is 50% bank owned or greater, or if there was nothing but short sales in an area, that data would have to be specific to the buyer, or seller in any given community.

    So following statistics randomly makes no difference.

    Real Estate is between a buyer, and seller, in a certain time frame.

    Government policy would be very significant to the over all market place. Specific distressed or non distressed is more local.

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  36. Kary L. Krismer

    By Pegasus @ 34:

    Get your facts first; then you can distort them as you please� � Mark Twain

    That summarizes your position nicely. You’re in total denial on this issue, and were back then too.

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  37. Kary L. Krismer

    RE: David Losh @ 35 – David, it’s rather obvious you haven’t been an active real estate agent in this market. You don’t know what you’re talking about.

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  38. whatsmyname

    By Pegasus @ 34:

    If I offer to pay someone $5.00 for every dollar bill it must mean all dollars are now worth $5.00?

    It does for the person you are paying.

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  39. David Losh

    RE: Kary L. Krismer @ 37

    Kary, like I said, insults won’t cut it.

    I know exactly what I’m talking about.

    You’re are trying to make the time you spend with these “statistics” sound important. It’s a sales gimmick, and talking point you use for your buyers, or sellers.

    This is a blog post, one of the daily blog posts Tim puts out. It’s how a Google search recognizes the site. Other web sites also create charts, and graphs for content.

    What is your statistical analysis used for?

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  40. corndogs

    RE: David Losh @ 39 – David you’re not a smart guy but that’s okay. . You still have some value. . Tell us what it felt like to take that first fraudulent ssi disability check. .. Did you feel guilty or did you feel that if was owed to you. Was it a bad back or did you go for mental disability?

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  41. Kary L. Krismer

    By David Losh @ 35:

    If you pay a lower price for a short sale or foreclosure it’s for the inconvenience. The product is selling for that price so once the transaction is completed it is a matter of sales data.

    Now, you could make a significant case that if a market place is 50% bank owned or greater, or if there was nothing but short sales in an area, that data would have to be specific to the buyer, or seller in any given community.

    So following statistics randomly makes no difference.

    Okay David, I’ll go into this more. You don’t know what you’re talking about. The lower price for REOs isn’t for the inconvenience. On non-HUD properties, I don’t even know what the inconvenience would be. De-winterizing the property? For HUD properties, the inconvenience is almost solely on the agent. So no, the lower price isn’t due to inconvenience.

    For short sales, the lower price is largely due to lower demand. The delayed/uncertain closing time takes many buyers out of that market. Lower demand means lower prices. So again, the lower price isn’t due to inconvenience.

    That’s what I meant by obviously you have not been an active agent in this market. You don’t understand what’s involved with either REOs or short sales.

    And as to your following the data randomly comment, that’s exactly what Pegasus was doing! By not breaking out the median for SS, REO and non-distressed all Pegasus saw back then was the median dropping. What he didn’t realize was that the median was dropping largely due to the change in mix of REO, SS and non-distressed. As noted back then in that earlier post, the non-distressed median had been hovering around $400k back then for some time. So the median data was useless because it wasn’t understood.

    Finally, what I’ve said for some time is that the median data and C-S data really is just an indication of the health of the market. A 30% drop in the median or C-S since the time you bought doesn’t mean your value went down 30%. It just means the market is weaker than when you bought. In that regard, looking at the median as published by the NWMLS would show that the market is weaker when there are more SS and REO sales, so that’s fine. The problem there though is that sales of non-distressed homes are seasonal, while sales of REOs and short sales don’t tend to be seasonal. That makes the median as published by the NWMLS less useful as a judge of market health. Looking at all three medians (REO, SS and non-distressed) is much more useful.

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  42. Kary L. Krismer

    By David Losh @ 39:

    What is your statistical analysis used for?

    Understanding the market better than those who simply read the headline in the Seattle Times. I didn’t have a Chicken Little response to the news of the low median back then because I understood what was happening in the market. Knowing what is actually happening is much more useful than pretending to be able to predict the future.

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  43. Kary L. Krismer

    By David Losh @ 39:

    You’re are trying to make the time you spend with these “statistics” sound important. It’s a sales gimmick, and talking point you use for your buyers, or sellers.

    Here’s an example of understanding beyond the headlines. When the median was rising, I was telling people why that increase wasn’t really what it seemed to be.

    http://www.trulia.com/blog/kary_l_krismer/2012/05/king_county_nwmls_median_shows_yoy_increase_but

    So, yes I guess you could call that a sales pitch–letting people know that I understand what I’m talking about when I talk about the market. Would you prefer I just go around screaming about how much the median had gone up?

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  44. David Losh

    RE: Kary L. Krismer @ 43RE: Kary L. Krismer @ 42RE: Kary L. Krismer @ 41RE: corndog @ 40

    All the same.

    The broader market makes no difference between the individuals in a transaction, especially when you say there is no way to predict the market.

    So you can be as long winded as you want, you can have these in depth discussions with your clients, but it’s sales talk.

    The buyer wants to buy, the seller wants to sell, and at that moment the Real Estate market is what it is. It’s a snap shot in time.

    As an example, your distressed market place may have great meaning in Renton, but here in Wedgewood, not so much.

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  45. Kary L. Krismer

    By David Losh @ 44:

    As an example, your distressed market place may have great meaning in Renton, but here in Wedgewood, not so much.

    On that topic I saw an appraisal from Newcastle where two of the comps were short sales. The appraiser mush have really searched hard to find those comps, because short sales were a very small part of that market at the time.

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  46. David Losh

    RE: Kary L. Krismer @ 45

    So what?

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  47. Kary L. Krismer

    RE: David Losh @ 46 – That’s incompetence, IMHO. It’s likely to lead to low appraisals in areas where short sales are not at all common because short sales sell at a discount.

    Also, in that particular case, there were a lot of other comps that the appraiser could have used. He didn’t use short sales by necessity. That he managed to find two almost indicates he did that purposefully.

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  48. David Losh

    RE: Kary L. Krismer @ 47

    You are flam jam stone cold busted.

    Throwing in an appraiser comment is deflection.

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  49. Kary L. Krismer

    RE: David Losh @ 48 – David, I don’t know why I even bother with you. You don’t know squat and you’re incapable of learning squat. And then you make comments like that.

    I’m not busted at anything. You just didn’t understand one of my comments and then when I explained it you still didn’t understand. Not terribly surprising, nor is your reaction. It’s typical Losh.

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  50. David Losh

    RE: Kary L. Krismer @ 49

    I understand completely. You ran your course of long winded comments about your expertise in statistics, and when I pointed out you were just generating sales talk, you changed the subject to appraisers.

    It is typical for you.

    I waste my time with you for pure entertainment.

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  51. Kary L. Krismer

    By David Losh @ 46:

    RE: Kary L. Krismer @ 45

    So what?

    This is not pointing out anything other than that you don’t understand. Quit changing what you did. You didn’t understand, so you asked a question. Then you didn’t understand the answer. Then you made some stupid comment about “busted” as is your habit.

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  52. David Losh

    RE: Kary L. Krismer @ 51

    I understand everything you write.

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  53. Kary L. Krismer

    RE: David Losh @ 52 Stop lying. You don’t understand squat. You don’t know squat.

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