You know about the Case-Schiller index, right? This IS the “research outfit out there already doing this sort of statistical work on behalf of institutions (hedge funds, private equity, etc)”. It measures repeat sales, looks at home improvements, etc. Now, my opinion is that, although CS is sophisticated and it is the best we’ve got so far, it’s by no means perfect. I believe it doesn’t capture closing cost rebates, very common nowadays. And, like any index based on closed sales, it trails the market by one or two quarters.
However, I disagree with Powayseller that the index is way off. Of course, I know of San Diego sales that recently closed substantially below 2004 prices, but I also know of sales that closed substantially higher (in some cases, 25% higher). So I would hold off on making general statements about the SD market based on one’s personal observations. I would still trust more the CS index, partially flawed as it is.