# Talk:2327: Oily House Index

Dangit Randall, this was my retirement plan & now everybody's gonna want to try it! ProphetZarquon (talk) 00:53, 2 July 2020 (UTC)

Negative Equity (owing more than the house is worth) shouldn't be an immediate problem under most circumstances. If the householder isn't actually wanting to move and can still afford the asked-for repayments then it doesn't change the physical situation at all. The bank has no problems so long as the household has no problems, as they ride over (temporary) pricing crashes and emerge the other side. It's when banks get nervous that the home'owners' might default and thus put pressures on them (e.g. 'negotiating' for unsustainably greater repayments or 'immediate settlement' of the unforeseen temporary deficit) that they could tip their so-called customer over the edge. And an increase of defaulting further suppresses house-prices (general availability of sell-quick homes by owners/bank and/or the reduced neighbourhood value around abandoned properties not sold nor (officially) lived in) to draw more agreements into the self-creating danger-zone. Of course it aint as simple as all that. And permanently being underwater due to coastal flooding, probably won't sit well with the actuaries behind your continuing loan if your property isn't in Innsmouth... 162.158.159.76 09:31, 2 July 2020 (UTC)

Maths

Can someone figure out where I went wrong here?
>The comic then applies dimensional analysis to this index: dividing \$/sqft by \$/bbl yields a result whose dimension is a linear measurement, which can be called length. 1 barrel is 5.6 cubic feet. The average price per square foot of a new single-family dwelling in the USA in 2019 was about 119 \$/sqft, while the price of oil in mid 2019 was about \$60/BBL or \$337/cubic foot. Dividing gives 60/337 feet-1 or about 5.61 feet. (This doesn't match the value shown on the chart of around 15, so we have done something wrong here. :))
Thanks. Stevage (talk) 00:54, 2 July 2020 (UTC)

Since barrels are in the denominator, you have to divide by 5.6 to get the price per cubic foot. LegionMammal978 (talk) 01:00, 2 July 2020 (UTC)

(\$/area)/(\$/volume)=(\$/sq.ft)/(\$/cu.ft)=1/ft? Shouldn't the result be in ft?

Units

Shouldn't area divided by volume be height, not length? It would also fit better with the graph. 162.158.123.173 03:41, 2 July 2020 (UTC)

For dimensional analysis, you don't care about the physical context of the units, just about the dimension they are associated with. Height is horizontal length, so it has the dimension of length. In the context of the comic this length can be interpreted as a height, but in another context, it could be a length in a different orientation. 162.158.88.78 04:16, 2 July 2020 (UTC)
Category

Should we start a category of dimensional analysis comics: e.g. 687, 1707, 2312 --WhiteDragon (talk) 07:41, 2 July 2020 (UTC)

Division Error?

You can't divide by zero; which means Randall made an error. Should we update the page to reflect this? 173.245.52.67 10:25, 2 July 2020 (UTC)

"OHI briefly became infinite as oil prices reached zero in 2020" could be read as approaching both infinity and zero; that fixes the problem 162.158.74.249 11:18, 2 July 2020 (UTC)
Randall did not divide by zero. If the price went continually to zero the OHI would aproach infinity. Of course at the time the price hit zero (or negative), then the OHI breaks down, which is what infinite means. So he did not make any error. (Wrote this and had an edit conflict with the first reply.) --Kynde (talk) 11:20, 2 July 2020 (UTC)

The comic should not use the word "mortgage," because the calculations are based on sale price. The size of the mortgage depends on the down payment. Cellocgw (talk) 11:40, 2 July 2020 (UTC)

My understanding is that if you fully mortgage your house (so that you now have in your hands enough money to buy the house again) and convert the total amount of money that the house is worth into oil, you can then fill your house with X feet of oil. 141.101.98.56 15:11, 2 July 2020 (UTC)
Find me a mortgage that will give me 100% of the value of my house. Please! 162.158.123.155 04:02, 3 July 2020 (UTC)