Scotland?
Ooh, chilly!
House prices here are barmy anyway, I saw a programme -Place in the sun - that was describing huge houses in Florida for about 100,000 dollars.
Does the US have this crazy see-saw with it's house prices?
Look at this for conflicting ideas, from the Guardian:
Crunching the numbers
Sandra Willcocks
Friday June 21, 2002 One minute we're being told house prices are racing ahead at full speed, and then yesterday we were told by the Royal Institute of Chartered Surveyors that they are slowing down. House price indices are intended to give a snap shot view of the state of the UK property market, so it can be very confusing when these snap shots seem to be taken of different landscapes.
Halifax, one of the most frequently quoted indices, reported a rise in prices of 4.2% in May, and an average price of 107,152. Nationwide, on the other hand, reported a rise of just 2.1% and an average house price of 102,886.
And the Royal Institute of Chartered Accountants (RICs) threw another spanner in the works by claiming that price increases were beginning to stabilise, signalling the possibility of a slowdown in the not too distant future.
The Land Registry too has its own set of data, which it releases quarterly. In its most recent figures it reported an overall house price rise of 1.77% between October and December 2001 and January and March 2002, while Halifax saw an increase of 4.9% between those quarters.
So why the big differences? Predictably, this is another case of lies, damn lies and statistics, albeit more of the latter. The different ways in which these organisations put together their figures clearly make for different results.
Firstly, the RICs bases its results on a monthly survey sent out to its members (all chartered surveyor estate agents), covering the previous three months activity.
RICS chief economist Milan Khatri explains: "We ask our members what their opinion is of house prices, whether they are rising, falling or staying the same." The organisation then works out a net figure by subtracting the number of those who think prices are falling from those who think they are rising.
But because the figures they produce relate to the number of chartered surveyors who see a rise or fall, rather than to the house prices themselves, the figures aren't all that useful for the public. Ray Boulger, technical director for mortgages at brokers Charcol, says: "For the consumer, this index is of limited value. It is helpful because it indicates a trend in house prices, but that's where it ends."
Halifax and Nationwide are a perplexing pair because, on the face of it, their methodology is pretty similar, and yet the numbers they produce month upon month are often very different. Both lenders base their figures on the mortgage approvals made in each month. And rather than tracking the prices of different sorts of houses and then working out an over all average price, both create a hypothetical house which represents the average property, then track the price of that property.
"We collect a lot of details on the properties we sell, such as how many bedrooms they have, whether they have gardens and garages and so on," explains Martin Ellis, group economist at Halifax.
Similarly, Alex Bannister, Nationwide's group economist says: "We take a basketful of properties, rather in the way that the Retail Price Index takes a basketful of goods. Then from there we create the average property, which is essentially a three-bed semi, and then we track the price of that property."
By doing this, the lenders smooth out any bumps in the graph caused by coincidences such as a lot of larger, and therefore more expensive homes being sold one month and a lot of smaller, cheaper homes being sold the next.
Next, both lenders seasonally adjust the prices to iron out any peaks and troughs in the market caused by summer holidays and winter bad weather, when people are less likely to buy and therefore house price increases look weaker.
So why, if their methods are so close, do the lenders so frequently come up with different figures?
One reason could be their reporting dates. Nationwide aims to publish its report on the last working day of each month, and works on a four-weekly basis, two weeks in one month and two in the next.
Halifax releases its figures during the first week of the month, and covers the full calendar month in its report.
Nonetheless, as Boulger says: "A week's difference in reporting shouldn't bring about big discrepancies."
Another theory is that the lender has more customers in the South East While Halifax has more in the North, resulting in geographically skewed figures.
However, Bannister strongly refutes this: "It is an ill-informed theory. We know that we have more customers in the south east, and therefore our figures are adjusted accordingly."
There are those who argue that Nationwide and Halifax, working as they do with a limited number of cases, do not offer a sufficiently accurate picture of the market. In fact, the only body that has access to every single house price is the Land Registry, since legally properties have to be registered with it by the buyer.
When collating the data, it filters out all artificially low prices, such as council house purchases and sales that occur due to divorce. And although it receives the details on properties only once the purchase has been completed, usually at least six weeks later than the offer has been accepted, all prices are backdated to the correct month.
However, this too has its drawbacks. The Land Registry only publishes its report quarterly, and because of the interval between purchase and land registration the publication is delayed, so up to date information is not really at your fingertips. What's more, figures aren't seasonally adjusted, giving an unrealistic picture of the market.
So if you want an accurate picture of the property market, whom should you turn to? Boulger says: "The Land Registry is the best, because it covers every property bought. However, for the consumer, the ideal is to pick a figure somewhere between the Nationwide's and Halifax's indices."
So, while judging the market is not quite a case of holding your finger to the wind, none of the indices can promise absolute accuracy.
Englishman
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