- February 20, 2022 at 2:08 pm #33814
Can you please check the data for Katanning? Not sure where you got the data from but it’s so different from RP data.
The attached screenshot from RP Data shows that Katanning properties increased 22.80% in the last 12 months but your data shows it made -1.14% in the last 12 months.
- February 21, 2022 at 8:01 am #33816KenKeymaster
HtAG prices are reported using the Typical Price metric which is very different from Median Price. More on this here.
Below is a screenshot of Katanning Typical price taken from this page.
As you can see the Typical Price trend is not comparable to Median Price from the CoreLogic screenshot you shared. It appears that there is insufficient underlying data for accurate calculation of Median Price in this instance, which results in data bias in the CoreLogic Median Price metric.
This creates an appearance of high YoY price growth, whereas in reality the prices are on a slight downtrend.
In contrast to Median Price, Typical Price is able to correctly represent price levels and trends in suburbs with low sales volume. It is one of the main points of differences in HtAG service offering, allowing investors to accurately establish historical price trends in suburbs where Median Price is biased.
To summarise, think of Typical Price as a home price index calculated for any given suburb. I recommend skimming through this article to get a better understanding of the main problem Typical Price metric is aiming to solve.
As always, feel free to reach out with more questions.
- February 21, 2022 at 4:27 pm #33823
I read the report from Terry Ryder and he wrote that we can buy ahead of price growth by finding locations where sale volumes are rising but prices have not yet moved.
Can I find these locations by using HtAG?
- February 21, 2022 at 4:40 pm #33824KenKeymaster
This is a great question.
I’d be very careful with making decisions just on sales volume alone. Our recommendation is to always assess markets based on the full set of metrics in our data dictionary.
The notion of tying price growth to increasing sales is again rooted in the data bias associated with Median Price.
For example, when sales increase, it’s possible that it is connected to new stock coming on the market. Therefore,the median price increases, as the new stock is always higher priced than older properties. however the total stock value may only increase slightly. There are many other scenarios like this.
Having said that, you can visualise the sales volume trend using the price charts (example in previous email). Look at green bars which represent the sales volume.
- February 21, 2022 at 5:45 pm #33825
I agree with you to not use the sales volume alone. I was thinking about using it to identify the suburbs then check other indicators to ensure they are good suburbs to get in.
Great! Thanks for explaining the new stocks in the example below – it makes sense! I learn something new from you everytime 🙂
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