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Central Auckland House Prices Drop $84,500 in a Month
Topic Started: 13 Aug 2015, 11:24 PM (5,897 Views)
The Whole Truth
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Shadow
13 Aug 2015, 11:44 PM
Volatile unstratified raw medians...
It might be more instructive to look at the 12 month moving average ...
That's the pot calling the kettle black :lol
shadow is a pleasure to watch when he is wriggling around in full DAMAGE CONTROL
Edited by The Whole Truth, 14 Aug 2015, 03:21 AM.
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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Shadow
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Terry
14 Aug 2015, 01:50 AM
OK. Perhaps 30+% of homes sold at median prices 84K lower than the previous month because of compositional bias. There you go.
Perhaps. My advice... when dealing with raw medians, wait until you have several months of data before getting too excited.
The Whole Truth
14 Aug 2015, 03:05 AM
That's the pot calling the kettle black
How so?
Edited by Shadow, 14 Aug 2015, 08:47 AM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Terry
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Shadow
14 Aug 2015, 08:47 AM
Perhaps. My advice... when dealing with raw medians, wait until you have several months of data before getting too excited.

Your advice would be no more than you can expect from a journalism cadet or an institutional brown noser. In the world of data analytics in 2015, the more raw the data, the better. This is why with schools such as MIT are teaching the opposite of what you are trained to think and read about data.

Why is this useful? The bigger the observations relative to aggregates, the far more interesting the data in respect to instability and predictive analytics. If the suburbanite observes that the 30% of house sales resulted in an outcome that is 84K lower than the previous month, they intuitively think "wow." And that is actually good, until it is explained away by people using rudimentary statistical techniques. Considering the power that we have to explore and crunch data properly, this is like living in the middle ages. It gets more ludicrous when house prices are falling more in a month that people make in a year.
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Shadow
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Terry
14 Aug 2015, 01:59 PM
house prices are falling more in a month that people make in a year
This is where your rudimentary understanding of statistics lets you down. You're 100% convinced that house prices really fell $84K in a month, but the truth is that prices may not have fallen at all. The composition of sales may simply have changed - i.e. mostly 2BR houses happened to sell last month, versus mostly 3BR houses the month before. The value of houses can actually rise, even if the raw median falls. For someone who claims to be a stats master, your comprehension is rather poor.
Edited by Shadow, 14 Aug 2015, 02:11 PM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Terry
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Shadow
14 Aug 2015, 02:10 PM
This is where your rudimentary understanding of statistics lets you down. You're 100% convinced that house prices really fell $84K in a month, but the truth is that prices may not have fallen at all. The composition of sales may simply have changed - i.e. mostly 2BR houses happened to sell last month, versus mostly 3BR houses the month before. The value of houses can actually rise, even if the raw median falls. For someone who claims to be a stats master, your comprehension is rather poor.
They did fall 84K in a month. No doubt about it.
It's like a soap opera. S&P are strategically positioning. It always looks good.

"We believe that if a sharp fall in house prices in Auckland were to occur, most financial institutions in New Zealand will be adversely affected even when they do not have significant direct exposure to home lending in the city. This is because of the importance of Auckland to the New Zealand economy; it accounts for about 35% of the GDP and more than one-third of the country's population," says S&P.

"Additionally, we believe that a sharp decline in house prices in Auckland would likely be accompanied by weakening in other macroeconomic factors such as a slowdown in GDP and a rise in unemployment. The business and consumer sentiment is also likely to suffer as a result, in our opinion. Accentuating these risks are New Zealand economy's external weaknesses in our view. We expect that the credit losses of most New Zealand financial institutions will significantly increase in such a scenario."
Edited by Terry, 14 Aug 2015, 02:27 PM.
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Shadow
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Terry
14 Aug 2015, 02:16 PM
They did fall 84K in a month. No doubt about it.
So based on unstratified raw medians published by one organisation, you have no doubt that property in Central Auckland has dropped by $84K (10%) in a month. OK.

I assume then that you're equally trusting of the same data which shows an 8% jump in one month for Outer Auckland?
Edited by Shadow, 14 Aug 2015, 02:43 PM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Terry
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Shadow
14 Aug 2015, 02:37 PM
So based on unstratified raw medians published by one organisation, you have no doubt that property in Central Auckland has dropped by $84K (10%) in a month. OK.

I assume then that you're equally trusting of the same data which shows an 8% jump in one month for Outer Auckland?
It did. No doubt about it. Volatility makes it fascinating.
Edited by Terry, 14 Aug 2015, 03:32 PM.
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Rastus2
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Shadow
13 Aug 2015, 11:44 PM
Volatile unstratified raw medians. Looking at the chart, similar falls have occurred roughly every year since 2010.

It might be more instructive to look at the 12 month moving average (that's the red line).

Posted Image

But you knew this, right? Since you are the forum's most eminent statistician. :lol

"12 month moving average "

Indeed, we can all learn a lesson here..


Did you consider using a moving average on AUD gold chart when you were so keen to jump all over that ?...
Shadow - Defrauded his Bank ? 2015 I have 9 different loans and my bank had no idea which ones were personal and which were investment. They had half of them classed incorrectly. When this change came in they asked me to tell them if any personal loans were incorrectly classed as investment, which I did, and they switched them to personal for the lower rate. They also had a couple of investment loans incorrectly classed as personal. They didn't ask me about those. So they stay on the lower rate too. Worked out pretty well. :)
Shadow - 2008 Sydney Median House Price 1.25M by 2014-2015

Shadow : I think this boom has already begun in several cities. My prediction :
Peak of boom: 2014-2015. Sydney Median Price: $1,250,000 Bottom of bust: 2017-2018. Sydney Median Price: $1,100,000

Shadow's Original 2010 House Boom and Crash prediction http://s836.photobucket.com/user/rastus22/media/shady-orig-2010-chart.png.html?sort=3&o=0

Shadow's attempt to edit his 2010 chart in 2015 and replace it with one that does not show a crash in 2013 http://s836.photobucket.com/user/rastus22/media/Screen%20Shot%202015-06-06%20at%207.12.52%20pm_1.png.html
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Andrew Judd
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Terry
14 Aug 2015, 03:31 PM
It did. No doubt about it. Volatility makes it fascinating.
if you are using the result only of a median you have no idea at all if prices fell. Computers and it being 2015 makes no difference at all. There is no way of providing an answer either way for a single calculation on a small sample.


Edited by Andrew Judd, 14 Aug 2015, 04:55 PM.
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Shadow
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Rastus2
14 Aug 2015, 04:20 PM
"12 month moving average "

Indeed, we can all learn a lesson here..

Did you consider using a moving average on AUD gold chart when you were so keen to jump all over that ?...
??? :bl:

You do realise gold is a single asset, right, and that the value is published continuously?

It's not a median price based on sales during the previous month.

Compositional bias and stratification don't come into it.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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