Can I ask a stupid question?

Graham_Devon

Cleaver wrote: »

I think you're right Graham on reflection, it probably does add a decent amount of difference. Sorry for snapping, you were only trying to help.

I just can't get the 40% thing, and it annoys me when I can't work stuff out.

There will be other factors. I'm not sure cash is one, as I believe land registy records those, and the percentage difference is around the same.

I've watched houses myself, just because I'm sad, that I can't buy, but like. One was on for around 7 months, initial asking price around £280k. It changed its price around 6 times (including increasing), but ended up at 210k listed and in a nice premium advert, and went STC.

Don't know what it achieved, wasn't interested enough to go hunting, but say it acheived 199k, I'd think this to be a decent price for the buyer based on property in the area.

That's a hefty difference between asking price (initially) and actual selling price.

Realise it's just one house. But it's real, can't link to it anymore as it won't be listed, but sure we could all find them via propertybee.

Then you got all your houses being put up for high prices, never selling, but all being registered.

Don't know how much this affects stuff, but seems developers are again hiking the prices, but offering sweetners as part of the deal, such as 10% deposit paid. Well thats 10% over selling price from the word go, regardless of any bargaining.

Cleaver

Graham_Devon wrote: »

There will be other factors. I'm not sure cash is one, as I believe land registy records those, and the percentage difference is around the same.

I've watched houses myself, just because I'm sad, that I can't buy, but like. One was on for around 7 months, initial asking price around £280k. It changed its price around 6 times (including increasing), but ended up at 210k, and went STC.

Don't know what it achieved, wasn't interested enough to go hunting, but say it acheived 199k, I'd think this to be a decent price for the buyer based on property in the area.

That's a hefty difference between asking price (initially) and actual selling price.

Realise it's just one house. But it's real, can't link to it anymore as it won't be listed, but sure we could all find them via propertybee.

Then you got all your houses being put up for high prices, never selling, but all being registered.

Don't know how much this affects stuff, but seems developers are again hiking the prices, but offering sweetners as part of the deal, such as 10% deposit paid. Well thats 10% over selling price from the word go, regardless of any bargaining.

Again, I'm sure there are execptions to the rule. But do you not get the feeling that although there will always be odd cases, most people stick their house on the market to sell, and pick a price around 10% above what they think they'll actually get? Pretty much everyone I know who's sold a house adopts this approach and pretty much gets what they are after. For example, me and Mrs C have sold three places: one for asking, one for 4% below asking and one 8% below asking. That seems pretty 'normal'.

Graham_Devon

Cleaver wrote: »

Again, I'm sure there are execptions to the rule. But do you not get the feeling that although there will always be odd cases, most people stick their house on the market to sell, and pick a price around 10% above what they think they'll actually get? Pretty much everyone I know who's sold a house adopts this approach and pretty much gets what they are after. For example, me and Mrs C have sold three places: one for asking, one for 4% below asking and one 8% below asking. That seems pretty 'normal'.

Definately.

I personally think it will be those being listed and never selling which will be distorting it more.

Anyone can ask 220k for their house, that has a realistic value of £150k. Don't mean they will sell it, and by all accounts, this is exactly what EA's say is now happening....people simply taking their houses off the market....it's the next thing that will bolster up house prices apparently, a lack of supply due to those for sale being taken off the market.

If they have that mindset, they will have the mindset of asking as much as possible in the first place.

These never actually make it to any other index's apart from rightmove. I'd imagine asking prices are skewed highly by toe dippers that don't have to actually sell, and these people appear to be big enough in numbers to reverse the oversupply.

Anyway, I'm out now. That's my explanation to part of the reason for the disparity, and I think it holds it's weight.

Cleaver

Graham_Devon wrote: »

Definately.

I personally think it will be those being listed and never selling which will be distorting it more.

Anyone can ask 220k for their house, that has a realistic value of £150k. Don't mean they will sell it, and by all accounts, this is exactly what EA's say is now happening....people simply taking their houses off the market....it's the next thing that will bolster up house prices apparently, a lack of supply due to those for sale being taken off the market.

If they have that mindset, they will have the mindset of asking as much as possible in the first place.

Whilst I fully agree that this will happen, and fully agree that it will warp the figures I just don't think it happens all that often or to the extent that would create a 40% difference.

Graham_Devon

Cleaver wrote: »

Whilst I fully agree that this will happen, and fully agree that it will warp the figures I just don't think it happens all that often or to the extent that would create a 40% difference.

Fair enough.

We could simply lay the blame on snow? Or thatcher.

Maybe worth looking into the acadametrics index, and go from there, comparing that with Haliwide, LR, etc.

Acadametrics is more in line with rightmove.

Really2

I have looked, and this is usefull.
http://www.fool.co.uk/Property/guides/Understanding-House-Price-Indices.aspx

A bit out of daet but still they reckon (other websites) RM is 50% of the market.
So locality could have an effect ilke Halifax and Nationwide.

If you look at the table on that link the only conclusion I can come up with it must be something to do with how they "clean" their data.

Procrastinator333

Generali wrote: »

Rightmove (and Acadametrics) use an arithmetic mean of prices whereas Haliwide use a geometric mean is the reason I think. Haliwide look to smooth the figures as much as possible, the others are not.

Geometric Mean:
http://en.wikipedia.org/wiki/Geometric_mean

Arithmetic Mean:
http://en.wikipedia.org/wiki/Arithmetic_mean

Though I think an example is easier.

Say you have 2 numbers 1 and 81. The arithmetic mean is what we would usually think of when talking about averages. E.g. (1+81)/2 = 41.

However the geometric mean is the numbers multiplied together to the n th root. E.g. Square root of (1X81) = 9.

So the geometric mean of 1 and 81 is 9, but the arithmetic mean is 41. The wiki page notes that the geometric mean is used for reducing the impact of outliers (e.g. the £20m house).

Graham_Devon

Really2 wrote: »

I have looked, and this is usefull.
http://www.fool.co.uk/Property/guides/Understanding-House-Price-Indices.aspx

A bit out of daet but still they reckon (other websites) RM is 50% of the market.
So locality could have an effect ilke Halifax and Nationwide.

If you look at the table on that link the only conclusion I can come up with it must be something to do with how they "clean" their data.

Doesn't explain the land registry.

Really2

Graham_Devon wrote: »

Doesn't explain the land registry.

Table at the bottom has all them on, just it has the LR as quarterly.

System

After reading 60 posts on the subject I've decided I don't care.

Just thought I'd share.

Anyone wanna come make more ghoul jokes?