Controversial Calculations

From the "paper of record", the New York Times, we have Christine Haughney write about Women Unafraid of Condo Commitment.

In the last five months, single women spent more than $30 million out of the $100 million or so in sales in the 299-unit condominium. In fact, single women bought 72 of the first 165 apartments sold. Spending by these women far surpassed that of single men, who accounted for $19 million. Married couples accounted for about $45 million in sales, and investors $5 million.

Brokers say that women are betting that even if they buy in a declining market, the values won’t drop as much as they would have spent on rent. They’re more comfortable buying in the same neighborhoods and buildings as their friends do. By purchasing condominiums that they could eventually rent out if they needed to move, they’re also hoping that they can hold on to these properties until the market improves.

“A woman will say, ‘I’m still saving money in the long term.’ ” said JoAnn Schwimmer, an associate real estate broker at DJK Residential. “They’re able to see the bigger picture, while a guy says, ‘I have to get the best deal.’ ” She said that her female clients who bought four years ago have male friends still waiting for prices to drop.

These women are retards!

They have never run an Excel spreadsheet about buy v/s rent, and are too busy living their "Sex and the City" dream.

They also haven't figured out that the "wasted" rent is implicitly embedded in their purchase price (in the form of interest, taxes, insurance, and maintenance.) Just because it isn't explicit doesn't mean that it has magically disappeared.

Also, the broker is implicitly rebuking them. If there is a "better deal", then there is no "bigger picture" to consider. The "better deal" is the "bigger picture".

This article is full of little gems:

Jen Lee, a 36-year-old director of sales for the Developers Group, bought a one-bedroom in Williamsburg for $440,000 the first day the building at 345 Union Avenue opened for sales in October 2005.

She raved to friends about how her apartment, built by Grand Union Private Development and marketed by her company, had nearly 10-foot-high ceilings, a private roof terrace and lots of closet space. Women have bought four of the building’s 10 units — translating into $2 million in sales, Ms. Lee said. Asked if she was buying at the wrong time, Ms. Lee said she was more excited that she had bought at all. “I wanted to invest in something, and that’s what I’ve done,” she said. “It will always be mine.”

Yep, it will "always" be yours unless you can't pay the debt in which case the big, bad bankers will take it away.

Some women said that they felt their friends were better market indicators than any statistics that point to a downturn.

Yes, why let facts get in the way of your pre-determined conclusions?

From personal anecdote, I'll go out on a limb, and say that I've never ever met a woman who was rational about finance.

NEVER! EVER!!!

I find it completely amazing that all these absurdly intelligent women I know, the ones who speak multiple languages, can argue about art, music and literature at length, and who are successful professionals in everything from engineering to medicine, have a complete meltdown when it comes to money and finance!

Color me surprised!

Here's what I've observed:

Women (at least the ones I've known) first make up their mind, and then go about finding reasons to confirm them.

This is the exact opposite of the "scientific method". Find something, and then go about finding reasons to contradict your conclusion, not the other way around! If you find these contradictions, you were wrong, and should abandon the conclusion; and if you don't find them, then you will end up finding a "deeper" reason to support your argument.

In case you think I'm being sexist, here's what the FDIC has to say on the subject: link.

Scroll down to table 1, and note the percentage of single women needing basic financial knowledge (41%) v/s single men (16%). Such a large difference can hardly be accidental.

Still not convinced?

Here's an article from Realtor Magazine.

While the number of unmarried men and women purchasing their own homes was virtually even 25 years ago, single females have pulled way ahead of their male counterparts in recent years.

In 2005, they bought 20 percent of all U.S. homes sold — about 1.5 million properties, or more than double the 9 percent purchased by single males. Changes in the mortgage lending industry have contributed largely to the shift in home buying demographics.

Once again, 20% v/s 9% at the tail end of a mania can hardly be accidental. The marketeers are very good at getting into the "settle down" part of the female brain.

And only in this country can a company run a television ad like this!

I pity the fools that marry these women.

I pity the fool, I pity the fool!