Crash Buyer Posted November 8, 2007 Share Posted November 8, 2007 (edited) Halifax derive their annualised HPI data from quarterly figures “to reduce volatility”. From December 2002 onwards the 'annual change' numbers are the quarterly year-on-year figures. These figures provide a better picture of underlying trends compared to a monthly year-on-year number as it smoothes out any short-term fluctuations. Using the monthly data from the Halifax website, seasonally adjusted HPI calculated using monthly prices is now 6.8%. This has slowed rapidly from a 2007 peak of 11.9% in July. Month Halifax HPI % Jan 10.5 Feb 11.1 Mar 11.3 Apr 10.1 May 10.2 Jun 11.5 Jul 11.9 Aug 11.0 Sep 9.1 Oct 6.8 <a href="http://www.hbosplc.com/economy/includes/02_11_07historic_data.xls" target="_blank">http://www.hbosplc.com/economy/includes/02...storic_data.xls</a> It is the prospect of further capital gains that has kept the speculative bubble going. Now that Halifax monthly data shows housing returns are similar to a good savings account, it is only a matter of time before the ‘official’ quarterly data follows. Halifax and Nationwide play an important role in forming expectations amongst the sheeple (more timely than Land Registry). How long before the bubble bursts? EDIT: Edited to correct the percentages (seasonally adjusted), thanks to Jason for spotting it. Edited November 8, 2007 by Crash Buyer Quote Link to comment Share on other sites More sharing options...
VacantPossession Posted November 8, 2007 Share Posted November 8, 2007 HALIFAX: "These figures provide a better picture of underlying trends compared to a monthly year-on-year number as it smoothes out any short-term fluctuations." Well just fancy that! How convenient. VP Quote Link to comment Share on other sites More sharing options...
Jason Posted November 8, 2007 Share Posted November 8, 2007 The YoY rate, comparing Oct vs Oct, is 6.7% far less than the 8.9% they currently state. Quote Link to comment Share on other sites More sharing options...
Crash Buyer Posted November 8, 2007 Author Share Posted November 8, 2007 The YoY rate, comparing Oct vs Oct, is 6.7% far less than the 8.9% they currently state. Jason, you're right - I've corrected the data in my original post. (in Homer voice) "damned seasonal adjustments!" Quote Link to comment Share on other sites More sharing options...
starsign Posted November 8, 2007 Share Posted November 8, 2007 Well just fancy that! How convenient.VP hmmm....quarterly info will lag the monthly read when prices are increasing faster, if you are suggesting that worse data is being hidden now as prices fall. Quote Link to comment Share on other sites More sharing options...
Limpet Posted November 8, 2007 Share Posted November 8, 2007 Can anyone remember what HPI figures will be dropping out of the calculation over the next couple of months? Although I suppose it depends on the specific index Quote Link to comment Share on other sites More sharing options...
OurDayWillCome Posted November 8, 2007 Share Posted November 8, 2007 hmmm....quarterly info will lag the monthly read when prices are increasing faster, if you are suggesting that worse data is being hidden now as prices fall. That is true. At least, when last Autumn's figures drop out we will be in the post Christmas depths of Winter, people skint from buying so much tat and then there's the cash mewchines health rating. Quote Link to comment Share on other sites More sharing options...
bazzzzzzz Posted November 8, 2007 Share Posted November 8, 2007 The YoY rate, comparing Oct vs Oct, is 6.7% Fantastic. Another giant leap toward a meaningful correction. Yoy negative in 2 years? I look forward to it . Quote Link to comment Share on other sites More sharing options...
Crash Buyer Posted November 9, 2007 Author Share Posted November 9, 2007 hmmm....quarterly info will lag the monthly read when prices are increasing faster, if you are suggesting that worse data is being hidden now as prices fall. Correct, but the overall effect is to smooth the data, which is probably designed to make trends appear less erratic than they really are. Can anyone remember what HPI figures will be dropping out of the calculation over the next couple of months?Although I suppose it depends on the specific index The Halifax MoM figures a year ago were Nov 1.7 Dec -0.9 Jan 1.4 Feb 1.9 Mar 1.2 If we assume further -0.5% MoM, the YoY result would be as follows Nov 2007 4.5 Dec 2007 4.9 Jan 2008 2.9 Feb 2008 0.5 Mar 2008 -1.1 Of course I'm not saying we will have -0.5% each month, but this type of trend is what Halifax mean when they say HPI will slow (although the press releases are based on the 'official' smoothed quarterly figures). Quote Link to comment Share on other sites More sharing options...
crashmonitor Posted November 9, 2007 Share Posted November 9, 2007 (edited) Halifax derive their annualised HPI data from quarterly figures “to reduce volatility”.Using the monthly data from the Halifax website, seasonally adjusted HPI calculated using monthly prices is now 6.8%. This has slowed rapidly from a 2007 peak of 11.9% in July. Month Halifax HPI % Jan 10.5 Feb 11.1 Mar 11.3 Apr 10.1 May 10.2 Jun 11.5 Jul 11.9 Aug 11.0 Sep 9.1 Oct 6.8 <a href="http://www.hbosplc.com/economy/includes/02_11_07historic_data.xls" target="_blank">http://www.hbosplc.com/economy/includes/02...storic_data.xls</a> It is the prospect of further capital gains that has kept the speculative bubble going. Now that Halifax monthly data shows housing returns are similar to a good savings account, it is only a matter of time before the ‘official’ quarterly data follows. Halifax and Nationwide play an important role in forming expectations amongst the sheeple (more timely than Land Registry). How long before the bubble bursts? EDIT: Edited to correct the percentages (seasonally adjusted), thanks to Jason for spotting it. That is the answer if you merely aggregate the monthly rises and falls.It would be slightly higher(not got a calculator)if you compounded the stats,perhaps 7.0%*.Excellent find,though,I had no idea they were boosting the annual with QonQ as opposed to MonM . *I'm going on my flat rate monthly interest Aand L account being 6.13% flat rate on the 12 payments but 6.3% AER after monthly compounding. Edited November 9, 2007 by crashmonitor Quote Link to comment Share on other sites More sharing options...
dude Posted November 9, 2007 Share Posted November 9, 2007 Slightly off-topic for this thread, perhaps, but is this the sort of growth the UK has to look forward to? This was too good to pass over -- US house price trends: Housing meltdown hits US economy Quote Link to comment Share on other sites More sharing options...
redgenieuk Posted November 9, 2007 Share Posted November 9, 2007 Correct, but the overall effect is to smooth the data, which is probably designed to make trends appear less erratic than they really are.The Halifax MoM figures a year ago were Nov 1.7 Dec -0.9 Jan 1.4 Feb 1.9 Mar 1.2 If we assume further -0.5% MoM, the YoY result would be as follows Nov 2007 4.5 Dec 2007 4.9 Jan 2008 2.9 Feb 2008 0.5 Mar 2008 -1.1 Of course I'm not saying we will have -0.5% each month, but this type of trend is what Halifax mean when they say HPI will slow (although the press releases are based on the 'official' smoothed quarterly figures). Presume these are non-seasonally adjusted figures. I will be really interested to see it the december drop is as big as last year. If so that should make for some grim xmas's. Quote Link to comment Share on other sites More sharing options...
crashmonitor Posted November 9, 2007 Share Posted November 9, 2007 (edited) Slightly off-topic for this thread, perhaps, but is this the sort of growth the UK has to look forward to?This was too good to pass over -- US house price trends: Housing meltdown hits US economy Amazing graph.Not sure how you can go from 9% YOY growth in Q3 2006 to zero by Q4 2006 unless most of the 9% came in Q4 2005 which then dropped out.Nice if we could go from 9% to zero in three months YOY between September and the year end ,but unfortunately growth was still strong in the spring and that will take until Q2 2008 to drop out. Edited November 9, 2007 by crashmonitor Quote Link to comment Share on other sites More sharing options...
youthoftoday Posted November 9, 2007 Share Posted November 9, 2007 (edited) The YoY rate, comparing Oct vs Oct, is 6.7% far less than the 8.9% they currently state. I got 6.756150%. Assuming this is correct then this rounds to 6.8% to one decimal place. At least it did when I learnt basic maths. Interestingly if you use their monthly data and assume a 0.5% fall each month from now then we'll have negative annual HPI by March: Mar 2008 192,366 -1.13% And the quarterly figures for annual HPI they use will be -1.063% by April 2008 with the same -0.5% monthly fall. That's bought Halifax one month then. Edited November 9, 2007 by youthoftoday Quote Link to comment Share on other sites More sharing options...
A.steve Posted November 9, 2007 Share Posted November 9, 2007 hmmm....quarterly info will lag the monthly read when prices are increasing faster, if you are suggesting that worse data is being hidden now as prices fall. Mathematical whoops! That's FALSE. There are three interesting quantities: A = Instantaneous "average" house prices (by any old metric) B = Rate of increase or decrease of average house prices (First derivative of A with respect to time) C = Rate of change of increase or decrease of average house prices (Second derivative of A with respect to time) In a steadily rising market, the effect of 'smoothing' the data by using moving short-term (3 months, whatever) averages rather than instantaneous averages is not especially to misrepresent A or B, but to obscure C. So, in other words, the index does its best to mask the rate of change of sentiment about growth/decline. This means that, while the index will be reluctant to register a change in sentiment from a falling to rising house prices, the converse (as we suspect is happening right now) will also be obscured by this index. Quote Link to comment Share on other sites More sharing options...
we the sheeple Posted November 9, 2007 Share Posted November 9, 2007 Lets have some fun with the numbers, bit of simple extrapolation ...... like the VIs did on the way up. RAMP IT DOWN Existing properties Sept 200,511 Oct 197,970 - 1.27% on the month, -15.2% on the year FTBuyers Sept 149,967 Oct 148,704 -0.84% on the month, -10.1% on the year FOO (former owner occupiers, i presume) Sept 223,837 Oct 220,958 -1.29% on the month, - 15.4% on the year New properties Sept 192,884 Oct 204,035 + 5.8% on the month, +69.4% on the year So the obvious answer is get down to your nearest new build and buy buy buy. Yeah, right. Quote Link to comment Share on other sites More sharing options...
Crash Buyer Posted November 9, 2007 Author Share Posted November 9, 2007 Slightly off-topic for this thread, perhaps, but is this the sort of growth the UK has to look forward to?This was too good to pass over -- US house price trends: Housing meltdown hits US economy Great graph! The Halifax reduction from 12% to 7% in just a few months also looks promising. Presume these are non-seasonally adjusted figures. I will be really interested to see it the december drop is as big as last year. If so that should make for some grim xmas's. They are the seasonally adjusted figures, which raises the question of why Halifax think its valid to smooth them using quarterly data. Also, perhaps December may be better than last year (using seasonally adjusted anyway). However, I'm hoping this trend will filter through to the sheeple by the new year. I got 6.756150%. Assuming this is correct then this rounds to 6.8% to one decimal place. At least it did when I learnt basic maths. Interestingly if you use their monthly data and assume a 0.5% fall each month from now then we'll have negative annual HPI by March: Mar 2008 192,366 -1.13% And the quarterly figures for annual HPI they use will be -1.063% by April 2008 with the same -0.5% monthly fall. That's bought Halifax one month then. I got the same numbers that you did on a monthly basis (see my previous post). Interesting that the quarterly smoothing won't buy them much time, but at least the downturn will look like a nice straight line. Quote Link to comment Share on other sites More sharing options...
Jason Posted November 9, 2007 Share Posted November 9, 2007 I got 6.756150%. Assuming this is correct then this rounds to 6.8% to one decimal place. At least it did when I learnt basic maths. That's because you're looking at the seasonally adjusted figures, I was refering to the non-seasonally adjusted figures. I don't see why you need seasonally adjusted figures when refering to a full 12month period, as they should both be the same. Quote Link to comment Share on other sites More sharing options...
youthoftoday Posted November 9, 2007 Share Posted November 9, 2007 That's because you're looking at the seasonally adjusted figures, I was refering to the non-seasonally adjusted figures. I don't see why you need seasonally adjusted figures when refering to a full 12month period, as they should both be the same. But you didn't state that you were using the NSA figures. The OP was referring to (and stated so) the seasonally adjusted figures. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.