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Debate House Prices
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House prices up by 6% ?
reheat
Posts: 2,296 Forumite
This MSE news item talks about House Prices Up By 6% in 2009. There is a link from the article to discussion of it but the link does not work for me.
How are house price increases calculated? Presumably only on properties actually sold. In which case it could presumably be skewed by abnormal selling patterns? For instance (and I have no evidence here, just a thought that it would be nice if someone could explain), what if far more up-market properties were sold in 2009, because such sellers were the only ones who could afford to move, and what if within that skewed market, property prices rose significantly.
Are their any figures that show house price changes within given sectors, and how many properties within those sectors contributed to the statistics?
How are house price increases calculated? Presumably only on properties actually sold. In which case it could presumably be skewed by abnormal selling patterns? For instance (and I have no evidence here, just a thought that it would be nice if someone could explain), what if far more up-market properties were sold in 2009, because such sellers were the only ones who could afford to move, and what if within that skewed market, property prices rose significantly.
Are their any figures that show house price changes within given sectors, and how many properties within those sectors contributed to the statistics?
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I think the answer should be here- but as much as I try, my brain won't work todayHow are house price increases calculated? Presumably only on properties actually sold. In which case it could presumably be skewed by abnormal selling patterns?
ETA: And you can select a range of different stats from this page.... well, I can't as I don't have excelWe cannot change anything unless we accept it. Condemnation does not liberate, it oppresses. Carl Jung
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Yep house prices are up by 6%, the 5 that have sold anyway.:D A slight exaggeration maybe, but you get the drift.0
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How are house price increases calculated? Presumably only on properties actually sold. In which case it could presumably be skewed by abnormal selling patterns? For instance (and I have no evidence here, just a thought that it would be nice if someone could explain), what if far more up-market properties were sold in 2009, because such sellers were the only ones who could afford to move, and what if within that skewed market, property prices rose significantly.
Are their any figures that show house price changes within given sectors, and how many properties within those sectors contributed to the statistics?
There are obviously differences between performance of different property types.
For example, newbuild flats in city entres fell in price far more than detached houses in good school catchment areas.
The recovery is showing that different properties in different areas recover at different rates. That is no surprise.
However the Nationwide index uses mix adjustment to balance out a higher percentage of sales of say detached houses than newbuild flats.
From their website......The purpose of mix adjustment is to simply isolate pure prices changes.
The simple example below illustrates how the changes in the mixture of properties sold each month could give a misleading picture of what is actually happening to house prices.
The set of properties sold from month to month will vary by location and design etc. and some adjustment is necessary to make sure all of these do not give a false impression of the actual changes to house prices.
A mix-adjusted or 'standardised' index is not affected by such changes because the relative weight given to each characteristic of a property in the 'mix' (or 'basket', to use an analogy with retail prices) is fixed from one period to the next.The mix-adjusted price represents the price for an average or 'typical' house. This should not be confused with the average price of all houses. The latter is usually higher because even though there are fewer more expensive houses sold, their price is such that they bias the simple average to be greater than the price of the typical house.
Simple example - Benefits of mix adjustment Suppose that the price of both detached houses and flats increased at the same rate for five periods, with flats being cheaper.
Further suppose that the proportion of flats and detached sold in each period varied considerably, as the table shows.
The simple average of both kinds of properties will be influenced by the proportion of each property sold. In periods 3 and 4 the simple average shows a decrease, whereas the actual prices of both increased!
The mix adjusted average uses a consistent measure of the proportion of each type of property and is able to better reflect the true change in prices.Time PeriodP1P2P3P4P5% Flats5030703070% Detached5070307030
So no, the indices are not skewed by abnormal selling patterns, such as more detached houses in nice areas selling than flats in poor areas, for example.
Prices are rising, on average. It's that simple.
Some areas will be rising faster than others, some areas are still stagnating, but almost all areas have stopped falling, and most have risen to some extent since the low of early 2009.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HammerSmashedFace wrote: »Yep house prices are up by 6%, the 5 that have sold anyway.:D A slight exaggeration maybe, but you get the drift.
There are currently around 90,000 houses a month selling in the UK.
That is not as many as sold at peak, but it is more than enough to get a statistically significant sample size.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Ain't it funny how some people just love the sound of their own voices?:D
(And are completely oblivious to when their boring the pants off everyone else? :rotfl:)0 -
Mix adjustment cannot prevent skewing caused by variations in selling within particular types. So, if only nicer properties are selling due to mortgage funding issues, you can get skewing of the data. People are being very selective on appearance from rightmove; problem is, the owners of "Average" properties havent dropped the price enough yet to sell.
We have a 2 tier market, in which the nicest properties are selling at around 12% of 2007 peak in my area, the average joe properties are shifting very very slowly and usually after significant price falls.0 -
FungusFighter wrote: »Ain't it funny how some people just love the sound of their own voices?:D
(And are completely oblivious to when their boring the pants off everyone else? :rotfl:)
:rolleyes:
The dumbing down of society has reached MSE, I see.....
I'll try again with something more at your level.No, coz they is mix adjusted, innit?“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Mix adjustment cannot prevent skewing caused by variations in selling within particular types. So, if only nicer properties are selling due to mortgage funding issues, you can get skewing of the data. .
I didn't hear you complaining when the very same indices, using the same methodology, were showing prices falling.....:rolleyes:
Presumably a year ago, when prices were still tanking, the dross wasn't selling either.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »There are currently around 90,000 houses a month selling in the UK.
That is not as many as sold at peak, but it is more than enough to get a statistically significant sample size.
And what is the ratio of how many houses sold to the amount of money lent for mortgages compared to peak ?
That will give a proper statistic of just how many houses are selling below their values from 2007 as well as how many cash buyers were buying last year.0 -
HAMISH_MCTAVISH wrote: »:rolleyes:
The dumbing down of society has reached MSE, I see.....
I'll try again with something more at your level.
What is truly amazing mate is you are so deluded and up yer own Khyber you think YOU need to come DOWN to MY level and yet you are self-confessedly a Daily Express reader.:D
Hmmm....:rotfl:0
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