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House Prices Higher Than A Year Ago!


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More detached houses selling and fewer flats. Guess what?? The average price went up....... No sh!t Sherlock!

Why do people get so worried about this bounce? So many bears committing harakiri and falling for the hype.

Gordon is trying his best to create an impression of economic growth and rising house prices, but.......... Think of a juggler having extra objects constantly thrown at him.

The asking price indices are showing signs of house price falls. The CML data yesterday was given a very bullish headline and many of you fell for it, but the headlines distracted you from a bit of calculator work and research to see that prices are falling.......... on completed sales!!!

The increases that you wet yourselves about are driven by London and the South east. The rest of the country has been slowly getting on with a price correction. When the cockneys sort themselves out the headlines might just scare a few buyers further north and we can get to the exciting bit!

Do yourself a favour. Have a stretch and a yawn. Get comfortable. Pick a nice comfy seat for the winter, and watch the horror unfold! But be prepared to wait. You've done really well so far, be a shame to blow it now wouldnt it?

Edited by Nick Dastardly
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More detached houses selling and fewer flats. Guess what?? The average price went up....... No sh!t Sherlock!

I can'r believe how hard this is for people to understand. The <i>average</i> price is indeed going up but only because the average is massively skewed - people with lots of money unaffected by a recession still regularly trade houses. Without transactions at the lower levels, it seems like the average house price is going up but it is meaningless. Hold your course and as Dastardly says, pull up a chair and watch the show.

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I can'r believe how hard this is for people to understand. The <i>average</i> price is indeed going up but only because the average is massively skewed - people with lots of money unaffected by a recession still regularly trade houses. Without transactions at the lower levels, it seems like the average house price is going up but it is meaningless. Hold your course and as Dastardly says, pull up a chair and watch the show.

That is not how the statistics are compiled. Something called hedonic regression is at work:

"The hedonic model of price measurement is based on the assumption that an asset's value derives from the value of its different characteristics. The price of a house will therefore depend on the value the buyer places on both qualitative (e.g. heating type) and quantitative attributes (e.g. number of bedrooms).

Since the prices of these characterictics cannot simply be observed, hedonic regression estimates the implicit market value of a unit of each attribute by comparing sample house prices with the associated characteristics (Thwaites and Wood, 2003).

Example: In order to avoid recording a rise in average property prices only because the number of detached houses changing hands in a certain period increases temporarily, the hedonic regression model will estimate the value of "terracedness" relative to "detachedness". If correctly specified, the price of each characteristic, and thus the price of a property with these fixed characteristics, will not be influenced by a change in the composition of overall property transactions. The result would be the desired standardisation to neutralise the effect of variations in the sample data."

http://www.home.co.uk/guides/house_prices_indices/hedonic_regression.htm

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More detached houses selling and fewer flats. Guess what?? The average price went up....... No sh!t Sherlock!

Why do people get so worried about this bounce? So many bears committing harakiri and falling for the hype.

Gordon is trying his best to create an impression of economic growth and rising house prices, but.......... Think of a juggler having extra objects constantly thrown at him.

The asking price indices are showing signs of house price falls. The CML data yesterday was given a very bullish headline and many of you fell for it, but the headlines distracted you from a bit of calculator work and research to see that prices are falling.......... on completed sales!!!

The increases that you wet yourselves about are driven by London and the South east. The rest of the country has been slowly getting on with a price correction. When the cockneys sort themselves out the headlines might just scare a few buyers further north and we can get to the exciting bit!

Do yourself a favour. Have a stretch and a yawn. Get comfortable. Pick a nice comfy seat for the winter, and watch the horror unfold! But be prepared to wait. You've done really well so far, be a shame to blow it now wouldnt it?

More detached houses sell less small houses sell, guess what rise in average price of sale. Well, rubbish in fact. LR don't do their stats this way and I don't think NW nor Halifax do either.

On the other point, you are wrong on the CML thread. Yes you needed your calculator to see that movers borrowed less, that's a far cry from prices falling. Be prepared to wait, some people must be tired of that entreaty.

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That is not how the statistics are compiled. Something called hedonic regression is at work:

"The hedonic model of price measurement is based on the assumption that an asset's value derives from the value of its different characteristics. The price of a house will therefore depend on the value the buyer places on both qualitative (e.g. heating type) and quantitative attributes (e.g. number of bedrooms).

Since the prices of these characterictics cannot simply be observed, hedonic regression estimates the implicit market value of a unit of each attribute by comparing sample house prices with the associated characteristics (Thwaites and Wood, 2003).

Example: In order to avoid recording a rise in average property prices only because the number of detached houses changing hands in a certain period increases temporarily, the hedonic regression model will estimate the value of "terracedness" relative to "detachedness". If correctly specified, the price of each characteristic, and thus the price of a property with these fixed characteristics, will not be influenced by a change in the composition of overall property transactions. The result would be the desired standardisation to neutralise the effect of variations in the sample data."

http://www.home.co.u..._regression.htm

in other words...for the normal people...Its a GUESS!

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i don't know where they get their facts from but round here places are sold then they come back on market again quite a few as well , also only 50/60% are selling at auction so where they get prices rising from is beyond me maybe london is doing alright but its twisting the stats, when it comes to the rest of the country they haven't got a clue its all b******T and lies as far as i can see

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Are you suggesting that the index compilers at the lenders and/or land registry actually use hedonistic regression in this way?

I can't see anything at the link you've given to suggest that that's the case; do you have any other info to confirm this?

(I believe the LR uses (used?) hedonistic-adjustment qualities called "repossesedness" and "auctionedness" to exclude data altogether ;))

edit: from the contents page of that site it seems that NW and Halifax use hedonistic regression, while LR doesn't.

Edited by huw
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  • 439 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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