Thursday, June 25, 2009

Interesting List of Indices and How they Work

House Prices How to Get the Real Story

So Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors was probably right in March 2009 when he said: "Most of the house price indices suggest prices have fallen by up to 20pc from the peak. However, many of our members [surveyors and estate agents] cast doubt on this and calculate independently that the scale of price falls has been even greater − 30pc or more already. They suspect the Nationwide and Halifax figures are underestimating scale of the peak-to-trough fall to date. Looking at the surveys you have to come to the conclusion that we aren't at the bottom by any stretch yet. Our members are still expecting further falls in prices, according to our survey, and if there's anyone you might expect to be talking up the market it is them"

Posted by sybil13 @ 06:40 AM (885 views)
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2 thoughts on “Interesting List of Indices and How they Work

  • Lukeskywalker says:

    Where I live, no estate agent thinks there has even been a crash, let alone 30%. Property just on at 540 sqft @ £399,950 right next to a main road makes its £740 per square foot. I just called to make sure with the agent and even she stuttered and asked if someone could call me back.

    http://www.rightmove.co.uk/property-for-sale/property-22495441.html

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  • Greenshootsandleaves says:

    ‘Rightmove and Hometrack are based on asking prices.’
    I know it’s a bit far fetched, but could a few EAs each get a few vendors to INCREASE their selling price, you know, to show just how confident they were that the market was ‘improving’? Would cost nothing and, lo and behold, before you knew it, you’d have yet another greenshoots article in one of our national dailies (always a good idea to leave a copy lying around during a viewing). Oh I forgot, it would require a certain amount of DISHONESTY AMONG EAs and a COMPLIANT/UNQUESTIONING PRESS, so it couldn’t possibly work. Might explain a few strange increases in the asking price of a number of properties in recent weeks, though …

    ‘They are only of use long-term
    The authors of the Acadametrics report highlighted all indices perform similarly over a long period when house prices are steady. We run into trouble when using the indices to study house price movements over short, volatile periods, such as the present.’
    Now then, Mrs Greenshoots finds that particularly funny but won’t say why.

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