| Repeat Sale Home Price Indexes |
| Written by Bill Russell | |
| 07.12.2007 | |
Discuss this article on the forums. (0 posts) There are several methods that can be used to measure home prices and appreciation. A median price index, like the National Association of Realtors (NAR) produces, simply plucks the median price home sold from each market and tracks its changes month to month. With such an index, there is no guarantee that the types (size, location, new/existing) of homes sold month to month don’t change. Therefore, changes in the median home price don’t necessarily signal real changes in the market. However, a repeat sale index is designed to control for changes in home type and measure true market appreciation by focusing exclusively on resold homes. Since resold homes largely remain the same through time, any change in home price represents changes in the market supply and demand, not in the mix of homes sold. Two repeat sales indexes are regularly published and available for free. The Office of Federal Housing Enterprise Oversight produces the OFHEO index. This agency is an offshoot of Fannie-Mae and Freddie-Mac, and uses these organizations’ mortgage data to generate its index. They publish a quarterly index at national and regional levels for all 361 MSAs, going back to the 1970s. It can be freely downloaded at their website. The other index is published by S&P/Case-Shiller and is based on a database of home sales records, though they don’t really specify where they get their home data. If you register at their site, you can download their index with data mostly starting in 1987 for the entire USA and 20 specific markets. You can also buy nationwide indexes, reported down to the zip code level. Both organizations claim their price indexes are superior, and in a future post I will discuss further the qualities of both. 
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