The Only Logical Reason I Can See As To Why It Looks

[Scott]

Let's say that in April the following houses sold (obviously it would have a been more in reality, although not much more ;-) ):-

£1,000,000 houses - 3 sold

£500,000 houses - 5 sold

£250,000 houses - 12 sold

£125,000 house/flat - 15 sold

That means the average price was £296,428

Now in May they all sell for 1.5% less but 2 less sell at the £123,125 price, as there are less FTB'ers.

£985,000 houses - 3 sold

£492,500 houses - 5 sold

£246,250 houses - 12 sold

£123,125 house/flat - 13 sold

That means the average price was shown as £302,215 (a rise of 1.95% contradicting that 1.5% drop!)

Now do the same again in June

£970,225 houses - 3 sold

£485,112 houses - 5 sold

£242,556 houses - 12 sold

£121,278 houses - 11 sold

Now the average price is shown as £309,063 (a rise of 2.26% contradicting that 1.5% drop!)

Is this what is happening? Do Nationwide and Halifax allow for this and adjust their figures for this anomally?

Edited August 6, 2009 by Scott

[Bloo Loo]

Let's say that in April the following houses sold (obviously it would have a been more in reality, although not much more ;-) ):-

£1,000,000 houses - 3 sold

£500,000 houses - 5 sold

£250,000 houses - 12 sold

£125,000 house/flat - 15 sold

That means the average price was £296,428

Now in May they all sell for 1.5% less but 2 less sell at the £123,125 price, as there are less FTB'ers.

£985,000 houses - 3 sold

£492,500 houses - 5 sold

£246,250 houses - 12 sold

£123,125 house/flat - 13 sold

That means the average price was shown as £302,215 (a rise of 1.95% contradicting that 1.5% drop!)

Now do the same again in June

£970,225 houses - 3 sold

£485,112 houses - 5 sold

£242,556 houses - 12 sold

£121,278 houses - 11 sold

Now the average price is shown as £309,063 (a rise of 2.26% contradicting that 1.5% drop!)

Is this what is happening? Do Nationwide and Halifax allow for this and adjust their figures for this anomally?

probably as good a reason as any.

I was discussing with Rinoa about lending multiples and how the CML say multiples have rarely been lower.

course, take 10 average joes with a 5 times multiple and 1 100K borrower borrowing the same and the average is strangley low 3.92 times salary.

MOST borrowers are at a risky level, but the CML can report that its not even 4 times earnings.

[Steve Smith]

Let's say that in April the following houses sold (obviously it would have a been more in reality, although not much more ;-) ):-

£1,000,000 houses - 3 sold

£500,000 houses - 5 sold

£250,000 houses - 12 sold

£125,000 house/flat - 15 sold

That means the average price was £296,428

Now in May they all sell for 1.5% less but 2 less sell at the £123,125 price, as there are less FTB'ers.

£985,000 houses - 3 sold

£492,500 houses - 5 sold

£246,250 houses - 12 sold

£123,125 house/flat - 13 sold

That means the average price was shown as £302,215 (a rise of 1.95% contradicting that 1.5% drop!)

Now do the same again in June

£970,225 houses - 3 sold

£485,112 houses - 5 sold

£242,556 houses - 12 sold

£121,278 houses - 11 sold

Now the average price is shown as £309,063 (a rise of 2.26% contradicting that 1.5% drop!)

Is this what is happening? Do Nationwide and Halifax allow for this and adjust their figures for this anomally?

Looking at the market and LR for this neck of the woods (NE Shropshire) I'd say that's probably it for your first question. Smaller FTB type properties seem to yo-yo between For Sale and SSTC before going To Let. Locally, the one smaller property that has turned up on the LR still has the same occupants, so I guess it wasnt sold in the normal kind of way, I'm guessing it's a rent back type arrangement. Nicer houses in the middle, which are few and far between, seem to sell quite well, but a fair way from peak prices. All higher end properties in the area remain unsold after several/many months on the market, with little drop in prices, this seems to be where the real delusion is around here.

From their weasly words, I guess Haliwide know this is the case also, but I can't see how they could adjust the figures. After all, the average sale prices is just that, it's the average of houses sold, with a seasonal adjustment.

[grizzly bear]

Looking at the market and LR for this neck of the woods (NE Shropshire) I'd say that's probably it for your first question. Smaller FTB type properties seem to yo-yo between For Sale and SSTC before going To Let. Locally, the one smaller property that has turned up on the LR still has the same occupants, so I guess it wasnt sold in the normal kind of way, I'm guessing it's a rent back type arrangement. Nicer houses in the middle, which are few and far between, seem to sell quite well, but a fair way from peak prices. All higher end properties in the area remain unsold after several/many months on the market, with little drop in prices, this seems to be where the real delusion is around here.

From their weasly words, I guess Haliwide know this is the case also, but I can't see how they could adjust the figures. After all, the average sale prices is just that, it's the average of houses sold, with a seasonal adjustment.

Is halliwide not mix adjusted? if its not then I am surprised anyone thinks there is any credibility to the numbers.

[Bloo Loo]

Looking at the market and LR for this neck of the woods (NE Shropshire) I'd say that's probably it for your first question. Smaller FTB type properties seem to yo-yo between For Sale and SSTC before going To Let. Locally, the one smaller property that has turned up on the LR still has the same occupants, so I guess it wasnt sold in the normal kind of way, I'm guessing it's a rent back type arrangement. Nicer houses in the middle, which are few and far between, seem to sell quite well, but a fair way from peak prices. All higher end properties in the area remain unsold after several/many months on the market, with little drop in prices, this seems to be where the real delusion is around here.

From their weasly words, I guess Haliwide know this is the case also, but I can't see how they could adjust the figures. After all, the average sale prices is just that, it's the average of houses sold, with a seasonal adjustment.

indeed, the average mortgage size has gone up in recent months, indicating that those with equity and large deposits are the ones moving.....ftbs are still priced out.

[mew too]

taken from money week

both the number of sellers and number of buyers has dived – but the gap between the two has closed. So you’ve got more buyers chasing fewer properties. And if all of those buyers are cash-rich and fussy, they’re only going to be chasing the best homes on the market. That suggests that the average price paid is going to be higher than you’d see in a more typical market with a larger number of transactions.

http://www.moneyweek.com/investments/prope...ttomed-out.aspx

[XswampyX]

taken from money week

both the number of sellers and number of buyers has dived – but the gap between the two has closed. So you’ve got more buyers chasing fewer properties. And if all of those buyers are cash-rich and fussy, they’re only going to be chasing the best homes on the market. That suggests that the average price paid is going to be higher than you’d see in a more typical market with a larger number of transactions.

http://www.moneyweek.com/investments/prope...ttomed-out.aspx

Exactly. If you had a market selling diamonds and shit, and the shit stopped selling, well you just get the average price of diamonds!

[InternationalRockSuperstar]

...

so bsically what you are saying is that the average size/quality of houses being sold is increasing and that netionwide are not adjusting their average selling prices to account for this?

edit: so price per sq foot is still falling.

Edited August 6, 2009 by InternationalRockSuperstar

[scuuzeme]

Seems nationwide and halifax are mix adjusted :

linky

[AteMoose]

There rising because approvals have been rising, and approvals are rising because more people are getting mortgages. My guess is people are worried about inflation...

http://www.houseprices.uk.net/articles/hou...rice_predictor/

Edited August 6, 2009 by moosetea

[XswampyX]

so bsically what you are saying is that the average size/quality of houses being sold is increasing and that netionwide are not adjusting their average selling prices to account for this?

edit: so price per sq foot is still falling.

No. I think we are getting crossed streams here, as in ghostbusters...

Take two parallel universes. The house in question is the same house in every way.

Universe A

I buy a house in 2000 for 200,000 pounds. I sit on my **** and watch TV for 9 years and then try and sell it at 300,000. It won't sell, so isn't on the house price index at all. It might be on the rightmove index, but that's another story.

Universe B

Same house, same circumstance.

I buy a house in 2000 for 200,000 pounds. I don't sit on my ****. In 9 years i have the garden landscaped, a new garage built, a conservatory fitted and the loft converted into a fourth bedroom. I try and sell it at 350,000. It's sold within a week. The price of my house has gone up by 50,000, but it has cost me 80,000 to do the improvements. On the index it's the same house.

Hence Diamonds and Turds!

Am I wrong?

The house price index doesn't take into account any improvements that I might make to my property. It's only improved houses that are selling....

[South Lorne]

....do Nationwide and Halifax include the sale prices of the repossessed houses auctioned by lenders ...if they do not then the monthly figures announced by such institutions are a farce....in fact do their house price indexes figure advertised prices or sold prices....I don't know ...grateful for clarification....?...

Edited August 6, 2009 by South Lorne

[The Masked Tulip]

It could just be plain old propaganda.

In WW2 British holiday makers frolicked, as much as you were allowed to frolick in the 40s, on the beaches whilst some 25 miles away British troops fought for their lives at Dunkirk during the Summer of 1940.

It was only when train-loads of sick and exhausted troops began to arrive back at UK stations, and word got around, that the Government eventually came clean on how dire things were in France - they were forced to when found out.

[VeryMeanReversion]

Is this what is happening? Do Nationwide and Halifax allow for this and adjust their figures for this anomally?

From what I can see, there is such a shortage of property for sale so buyers are competing again. I have two probate houses to sell and there is no shortage of interest at 20% below peak prices. (All cash or SSTC buyers rather than FTBs)

However, I expect supply to increase as the effect of record rises in unemployment kick in and this to swamp the few buyers that are competing.

So the path around the supply/demand quadrants has been:

Boom : Normal supply, High demand (credit related)

Now: Limited supply, limited demand (Stagnant market, low transactions)

Next: Large supply, limited demand (forced sellers, fast price drops)

All contained within a demographic profile of peak buying power in 2006, forever in decline after that.

The only thing that can stop this is governments limiting repossessions to a few 10K's a year. That is going to be expensive (or printed).

VMR.

[Willy Weasel]

Exactly. If you had a market selling diamonds and shit, and the shit stopped selling, well you just get the average price of diamonds!

That is a fantastic analogy for the current situation. Can we all use this line when speaking to estate agents who tell us the market has stabilised or is rising?

[Telometer]

That is a fantastic analogy for the current situation. Can we all use this line when speaking to estate agents who tell us the market has stabilised or is rising?

No, because the market IS rising. QE has been great for bankers. Bankers are fighting over £1m+ houses in London.

[jonb]

so bsically what you are saying is that the average size/quality of houses being sold is increasing and that netionwide are not adjusting their average selling prices to account for this?

edit: so price per sq foot is still falling.

I don't think price per sq foot is necessarily lower. It tends to be the properties in better areas that are selling, and the ones in "sub prime" areas are not selling.

[jonb]

....do Nationwide and Halifax include the sale prices of the repossessed houses auctioned by lenders ...if they do not then the monthly figures announced by such institutions are a farce....in fact do their house price indexes figure advertised prices or sold prices....I don't know ...grateful for clarification....?...

They do if they are funded by Halifax or Nationwide mortgages. Repos sold via estate agents are as likely to be funded by them as any other property. Repos sold at auction are less likely to be funded by them.

[cock-eyed octopus]

Anecdotal: Friend of mine has had his South Cambs. home on the market for over 6 months; 1 viewing in the first 6 months, 9 in the last week (5 on Sat, with 2 repeats). Something's going on.

[VeryMeanReversion]

Anecdotal: Friend of mine has had his South Cambs. home on the market for over 6 months; 1 viewing in the first 6 months, 9 in the last week (5 on Sat, with 2 repeats). Something's going on.

I live in South Cambs, supply has dried up and buyer are getting desperate.

VMR.

[Willy Weasel]

No, because the market IS rising. QE has been great for bankers. Bankers are fighting over £1m+ houses in London.

So what about the other 99.99% of the market?

[zilly]

Anecdotal: Friend of mine has had his South Cambs. home on the market for over 6 months; 1 viewing in the first 6 months, 9 in the last week (5 on Sat, with 2 repeats). Something's going on.

Well yes - it is.

Classic bull trap behaviour!

There's still no FTB market, limited transactions are current mortgage owners swapping places and overstretched 'cash buyers' rushing to expand their 'portfolios' because the Express tells them a new boom is on the way.

Don't worry. Be patient.