Divining Case-Shiller

Submitted by Rich Toscano on October 29, 2009 - 6:53pm

The Case-Shiller index is the most accurate measure of aggregate home price changes, for reasons long-since described here. But it's been an ongoing gripe of mine (and everyone's) that the index lags so badly. The data that was just released a couple days ago on October 27, for instance, only tracks home prices through August.

So lately I've taken to using the median price per square foot data to guess, for lack of a better word, what the Case-Shiller index values for more recent months might be. An example of this estimation can be found in the graph below, which appeared in the writeup of the most recent median price data:

Here's how I arrive at these estimates. (Non-nerds may wish to fall asleep for the remainder of this paragraph)...

continue reading at voiceofsandiego.org

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You know, I was wondering how
Submitted by davelj on October 30, 2009 - 12:59pm.

You know, I was wondering how accurate your proxy estimate had turned out to be. Glad you posted this. Using ocular regression, it looks like your proxy estimate has been, on average, about 65%-70% accurate, which is pretty good considering its simplicity.

Good analysis Rich. Time lags
Submitted by EconProf on October 31, 2009 - 5:39am.

Good analysis Rich.
Time lags are widely misunderstood and greatly underrated in importance. Using your graphs, it can easily be projected that the rebound in both average prices and PPSF will continue their recovery for the next few months.
But there is another time lag involved, that could be called the transaction decision. Before those sales closed in August, there was an escrow period of perhaps a month, preceeded by a search, select, and negotiatiate period, preceeded by a "Let's consider buying" period. Cumulatively this could all total 3 - 6 months, making the trough in your graph much earlier than shown.

Dude. You got the sign (+/-)
Submitted by sdduuuude on November 2, 2009 - 12:47pm.

Dude. You got the sign (+/-) right 100% of the time. That's good enough for me.

Insert obsequious comment
Submitted by urbanrealtor on November 5, 2009 - 10:46am.

Insert obsequious comment here.