A Day Late, and a Dollar Short

From the Boston Globe, we have Kimberly Blanton reporting on: `Priced below assessment'.

In the $1 million-plus housing market in Greater Boston, sales plunged 62 percent this year, according to the listing database MLS Property Information Network. The drop is making it ``routine" for assessments to exceed asking prices in that market, said Landvest agent Terry Mailtland, causing problems for sellers whose assessments are so high that buyers perceive a big tax bill as ``an impediment to a sale."

But clients Diane and Richard Schmalensee view a slightly higher assessment on their home overlooking Chestnut Hill reservoir as a selling point. The house was put on the market in October for $2.95 million. In May, they dropped the price to $2.75 million, below the $2.84 million assessment on the 1-acre property with a three-car garage and tennis court.

"Right after we bought this, the prices began to shoot up, and we said, `Aren't we lucky,'" said Diane Schmalensee, a business consultant; her husband, Richard Schmalensee is dean of the Sloan School at Massachusetts Institute of Technology. With the market in decline, she realized perhaps "we waited a little too long" to sell.

Three points, sweetheart:

Firstly, you waited too long to try to sell it. You haven't sold it yet! And hence, your estimate of what it's worth is what we like to call a "wishing price".

What you sell it for will be the "true price", assuming you are able to sell it at all.

Secondly, prices shot up, and "Aren't we lucky?". Yep, all multi-million dollar transactions should be made on "luck" not on the basis of fundamentals. Now, all you have to do is sit back, and hope that your prospective purchaser also believes in "luck". If they start believing in fundamentals, you're fucking screwed!

Lastly, how can the Dean of the Sloan School not understand the basics of economics? This isn't Joe Six-Pack or Jane Soccer-Mom, this is the fucking dean of the Business School at MIT!

Guess, the good professor is going to have to take a lesson in the School of Hard Knocks!