NATIONWIDE - UK house prices fall 0.4 pct mm in April

Cannon_Fodder

"By Ray Boulger" - mortgage industry mouthpiece, employed by a Mortgage broker = no VI there, then.

"but in August the impact of seasonal adjustment will be to improve the real figure by about 1pc, the opposite of what has happened in each of the past two months."

someone who thinks "improving prices" are increasing house prices = VI proven. what other industry is happy when the 'product' goes up in price constantly?

"Nationwide and Halifax always focus on the seasonally adjusted figures in their monthly house price surveys."

Once chosen, that is as it should be. As long as its consistently done, and not cherry-picking months when it suits a particular VI, where's the problem?

I cannot recall seeing or hearing from Mr Boulger, or any other VIs depending on continued HPI, to the effect that they were upset when Nationwide's seasonal adjustments were exageratting the growth of the bubble...that at some point real prices were lower than the headlines...strange that!?

As the "average house" doesn't even exist - read their methodology - its just as artificial as the index, and just as artificial as the seasonal adjustment.

The only thing left is to stick consistently to whichever number is quoted as the headline.

I thought that only -0.4% was enough to keep both camps happy, why this has been such a hoohah at all, I just don't get.

dervish

Cannon_Fodder wrote: »

"By Ray Boulger" - mortgage industry mouthpiece, employed by a Mortgage broker = no VI there, then..

He also died in 1987.



Maybe (just like his Scarecrow character) he is missing his brain and his views aren't quite sensible!

StevieJ

Cannon_Fodder wrote: »

someone who thinks "improving prices" are increasing house prices = VI proven. what other industry is happy when the 'product' goes up in price constantly?
.

Not sure I am with you on that one, but I will have a first guess - Farmers

stephen163

mitchaa wrote: »

Someone in the media agrees

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/5255710/Nationwide-House-Price-Index-Actually-prices-went-up.html

Looks like August will be a positive month then

A statistician would cringe if they read that article.

If people agree that there is a seasonality to house prices, then surely, if you compare consecutive months, you need to remove this seasonality for a fair comparison! Remember, it is CHANGES in the overall house price trend people are interested in - the trend that threads its way through time uninterrupted, not the temporary fluctuations.

I suggest using seasonally adjusted figures as it is easier to compare the trend. We can be more sure, for instance, that the rise in a month was due to the overall house price trend rather than a temporary seasonal fluctuation.

If not, be prepared for the inevitable - 'but what about the spring boom?'...or 'houses prices are helped by summer demand anyway'...or 'there's less demand in winter'. It all balances out over the year anyway, so just use the seasonally adjusted figures!!

StevieJ

stephen163 wrote: »

A statistician would cringe if they read that article.

If people agree that there is a seasonality to house prices, then surely, if you compare consecutive months, you need to remove this seasonality for a fair comparison! Remember, it is CHANGES in the overall house price trend people are interested in - the trend that threads its way through time uninterrupted, not the temporary fluctuations.

I suggest using seasonally adjusted figures as it is easier to compare the trend. We can be more sure, for instance, that the rise in a month was due to the overall house price trend rather than a temporary seasonal fluctuation.

If not, be prepared for the inevitable - 'but what about the spring boom?'...or 'houses prices are helped by summer demand anyway'...or 'there's less demand in winter'. It all balances out over the year anyway, so just use the seasonally adjusted figures!!

The problem with seasonal adjustments is the public then make the seasonal adjustment again. I have heard people when commenting on the figures saying something like' don't house sales normally increase in the spring'. The general public are not statisticians but are in general aware of the effects of seasonality.

stephen163

StevieJ wrote: »

The problem with seasonal adjustments is the public then make the seasonal adjustment again. I have heard people when commenting on the figures saying something like' don't house sales normally increase in the spring'. The general public are not statisticians but are in general aware of the effects of seasonality.

It will be hard to educate the general public, but in a forum like this, and in the professional analysis of house prices (the kind investors with no VI would do), seasonally adjusted figures should be used - it takes away the abitrary guesswork and replaces it with a definite adjustment, elucidating the trend.

The only possible attack would be to discredit the methodology.