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Looking at the main graph:

http://www.housepricecrash.co.uk/graphs-average-house-price.php

Which I think is direct from Nationwide - why does the trend line go wobbly in the recent quarters? I thought it was a simple exponential fit?

Also, why fit through the points half-way up? Why not fit the troughs? If you fit the troughs then it looks seriously overvalued still, but the line shown, also reported in the press,

http://www.thisismoney.co.uk/property-prices

makes it look as though house prices are undervalued...

this graph matters, and it looks to me as though it is a little distorted.

Optobear

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The purpose of the trend line is to make the latest peak look not so scary. It bears no relevance to any reality.

You are right, you get a nice trend line if you join up the troughs (similarly if you join up the peaks). This should give you some idea about the scale of the crash we are going to have.

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I've wondered that too about that trend line. No doubt Nationwide will have an explanation for it, but as you say I always imagine a trendline going through the troughs, which means that prices are way way overvalued. Early days yet... give it another 10 years give or take a couple and we should be at or near a trough. Shame if you're really keen to buy, but if you are happy to wait you'll be able to buy a reasonably priced house. Bit like Top Gear and the reasonably priced car.

Edited by alaninstockport
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I've wondered that too about that trend line. No doubt Nationwide will have an explanation for it, but as you say I always imagine a trendline going through the troughs, which means that prices are way way overvalued. Early days yet... give it another 10 years give or take a couple and we should be at or near a trough. Shame if you're really keen to buy, but if you are happy to wait you'll be able to buy a reasonably priced house. Bit like Top Gear and the reasonably priced car.

Interesting that in 2005,

http://www.nationwide.co.uk/hpi/historical/MPR0512.pdf

The nationwide graph shown on third page, fits with a trend of 2.5% pa it is now 2.9% pa

So not only is this exponential growth, but it is accelerating exponential growth, with rate of growth increasing year on year! Even faster than exponential - now how common is that in real systems? It is convincing me that property is seriously undervalued based on the latest graph.

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Interesting that in 2005,

http://www.nationwide.co.uk/hpi/historical/MPR0512.pdf

The nationwide graph shown on third page, fits with a trend of 2.5% pa it is now 2.9% pa

So not only is this exponential growth, but it is accelerating exponential growth, with rate of growth increasing year on year! Even faster than exponential - now how common is that in real systems? It is convincing me that property is seriously undervalued based on the latest graph.

UNDERvalued?

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Perhaps CPI is a fiction.

Edit: Also, it's not a log chart so the 'double' from 35k to 70k looks far less than the double from 70k to 140k and so on although it's the same which also adds to the appearance of a rising trend line. All in all it's a bit of a dog's dinner.

Edit: Wobbly - volatility in price and CPI?

Edited by Red Karma
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Nice work.

Is accelerating exponential growth a feature of an unsustainable bubble. Something that may not be true of just exponential as long as incomes upon which borrowing is premised also grows exponentially? Well I suppose if incomes grow in an accelearting way it would still be 'sustainable' according to this relationship. So - the sustainability or otherwise is entirely dependent on income affordability which can change.

EDIT: BTW I don't think anyone seems to have an answer for the wobble at the end of the red trend line. I don't.

But wages haven't kept up with the exponential growth in the last 15+ years, what has happened is new fangled ways to lend people more money has bridged the gap between wages and HPI.

Who is to say instead of wage growth some new 'clever' (sic) way of increasing multiples / extending mortgages (multi-generational) / lending to groups who share / lending larger amounts for a smaller share in the property is going to keep filling the gap? This is what the banks want as they make more money from debt slaves. The banks will simply think they can come up with some new 'innovation' to lend more to people. This is how they think.

I don't think it is sustainable but am simply stating what the banks probably would like to happen. And so long as the populas think HPI = good we have a fight on our hands to make it NOT happen that way.

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Looking at the main graph:

http://www.housepricecrash.co.uk/graphs-average-house-price.php

Which I think is direct from Nationwide - why does the trend line go wobbly in the recent quarters? I thought it was a simple exponential fit?

Also, why fit through the points half-way up? Why not fit the troughs? If you fit the troughs then it looks seriously overvalued still, but the line shown, also reported in the press,

http://www.thisismoney.co.uk/property-prices

makes it look as though house prices are undervalued...

this graph matters, and it looks to me as though it is a little distorted.

Optobear

+ 1

That "trend line" is absurd. Very misleading, and totally counter-productive.

It is very weird that this site puts that crazy, misleading line on their homepage.

nation_469x319.jpg

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(...)

EDIT: BTW I don't think anyone seems to have an answer for the wobble at the end of the red trend line. I don't.

I don't even know what type of trend line it is.

Is it exponential? Polynominal? Power? Logarithmic?

Whatever it was, it seems to have suddenly morphed into a lagged moving average.

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It looks well wrong. It's never gone so short term wibbly wobbly before. It looks like they've recently shortened the time period for the trend average. E.g shortened to say a 30 day moving average instead of say180 day (I'm not saying those are the actual periods used, just giving an example of what might be happening).

Then they can say prices are below trend and that means there's a buying opportunity and expect sheeple to be daft enough to believe them and get queueing to buy?? Marketing it as a spring time buying opportunity, maybe they're lining up some heavy marketing for the spring market and the wibble in the trend could be part of it because they know the housing market is so devastatingly weak and collapse is well overdue.

Who knows but it's well known they'll say anything as well as porkies galore and almost anything goes just to get people to buy into mortgage slavery.

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Does it relate to the fact that there was a change from a trend line of 2.5% to 2.9% but hpc has not gone back and changed the entire trend line?

The Nationwide chart looks smoothe on ToW's piccie so it looks like they did go back and change theirs.

That's very possible because comparing the end point of the trend line in the OP link with the 2.9% trend line on the HPC home page (which is a smooth trend line) the intersection points in the last 2 years look the same relative to the actual house price line - but the OP link trend line does seem to wobble about a bit since January 2009 which is a bit like a short term moving average.

There's something wrong about it and it also looks like the actual house price line differs from that on the HPC home page since January 2009. For one thing the line seems to give a steeper recovery since January 2009.

Edited by billybong
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Good question.

Mods? Any answer?

The Nationwide trend line is a simple exponenential (it says), and I'd guess it is a simple least mean squares fit to the data in excel.

The funny thing is that if you go back to say 2002, and look at Nationwide's press releases it has 1.9% and is all doom and gloom about the prospects for prices rising!

It is very admirable that they keep an archive of all their previous predictions.

Optobear

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I'll have to update this sometime - it's the trendline 'de-trended'.

Kilham,

that graph is very interesting. It predicts a lowest price as of £70-80k.... for the bottom of a trough!

Is it inflation linked? If you look at Nationwide and look at their data on an uncorrected basis you see that house prices have reason nearly 80 fold since 1952, but that is mostly inflation, with the rate of HPI somewhere between 2%pa an 3% pa above inflation over 58 years. The serious (recent) madness was 2002-2004, where increases happened without any inflation (thanks to cheap chinese imports). You've never had it so good!

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The Nationwide trend line is a simple exponenential (it says), and I'd guess it is a simple least mean squares fit to the data in excel.

The funny thing is that if you go back to say 2002, and look at Nationwide's press releases it has 1.9% and is all doom and gloom about the prospects for prices rising!

It is very admirable that they keep an archive of all their previous predictions.

Optobear

Better to download and save it.

The likeliest cause is nobody there cares/noticed.

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What it is also telling you with that trend line is that each bubble gets more inflated and each crash more violent. So the correct conclusion is that we are heading for the mother of all property crashes.

Expanding horn shape.

A measure of the real damage to the economy caused by the previous bubble. The scale of damage - which si still continuing largely thanks to continued bubble expansion policy remains masked by the bubble, but it is there and already done.

Edited by OnlyMe
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Kilham,

that graph is very interesting. It predicts a lowest price as of £70-80k.... for the bottom of a trough!

Is it inflation linked? If you look at Nationwide and look at their data on an uncorrected basis you see that house prices have reason nearly 80 fold since 1952, but that is mostly inflation, with the rate of HPI somewhere between 2%pa an 3% pa above inflation over 58 years. The serious (recent) madness was 2002-2004, where increases happened without any inflation (thanks to cheap chinese imports). You've never had it so good!

I can't remember exactly how it was calculated now but I loaded the official Nationwide data in to excel and created a formula to 'detrend' it.

The thin blue line is non-inflation adjusted, all the other figures will be adjusted by whatever official index Nationwide uses.

I'm assuming if house prices had increased by exactly the official rate they would form a horizontal line. The 'detrend' prediction comes out at around 90k though when is a different matter.

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  • 433 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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