Posted: September 29, 2010 by John McClelland
Yesterday, Standard & Poor's released the S & P/Case-Shiller home price indices. Major news outlets were all over the place when quoting these. Some said it went up, some down, some sideways. I would like to highlight a few features of these indices:
-There are seasonally adjusted and non-adjusted indices. Standard & Poor's, in a technical bulletin, recommends against using the seasonally adjusted series because it can misinterpret variations in the choppy real estate markets with seasonality.
-S & P releases tiered price indices and composite indices of all of the metro areas they track. The tiered indices are broken out into three tiers. We find that this is very useful as we don’t like to over generalize the market.
-The indices are lagged by two months and use a 3-month moving average. These are repeat sale indices so same homes are tracked as they resell. This alleviates the problem of median price series where a changing mix of homes sold in each sample period alters the series.
-These are single family only, except for Los Angeles, San Francisco, Chicago, Boston and New York City.
Source: Standard & Poors.