Probably the most watched report in the real estate industry over the past two years has been the Standard & Poor's Case Shiller Index, which is sometimes referred to as just the Case Shiller or the S&P Case Shiller Index. It comes out the last Tuesday of every month, and reports on home prices in 20 cities.
The first reason it gets a lot of attention is that it's the only data we get that comes out every month on a city level. The National Association of Realtors puts out a monthly report, but it only gives you national data.
The second reason is that one of the founders, Robert Schiller of Yale University, coined the phrase irrational exuberance, and is seen as being one of the first to predict that the housing market would crash, even going so far as to sell one of his own homes and rent. Right or wrong, this gives him more credibility.
Finally, most of the other reports are put out by either trade groups like the NAR, which obviously have a certain agenda to promote home buying, or companies like RealtyTrac, which sell information, so have a different agenda.
The downside of the Case Shiller is that it hasn't been around all that long (started in 1987), so it's often calling 'record' highs or lows.
Also, the data it reports is two months old, so you could argue that it's not particularly relevant, but the arguement is that it's the best data we have. So, when the index was released in late December, the data reflected price changes for October.
Finally, the index only covers 20 cities, which is actually an increase from the 10 cities it first covered. While Washington, D.C., is one of the cities that are included, Baltimore, Richmond, and other cities in the area are not included. The idea is that the index gives you a general idea of how the national market is doing, but if a city like Raleigh is doing very well, that won't be reflected.
If you want to understand the Case Shiller index better, I recommend the multimedia graph set up by the New York Times. It shows each individual city, and looks back to 2001, so you have a better perspective on how prices have trended, instead of just hearing the year over year or month over month number. This page is dedicated to the index.
Comments
It is true that the S&P/Case-Shiller Composite 20 index covers only 20 markets, but:
- those 20 metros account for @43% of the country's aggregate home value and
- broader index is availble- the S&P/US National covers many more population centers (although it's released quarterly vs monthly).
Look here
“Real Dow & Real Homes & Personal Saving & Debt Burden”
and here
“Homes’ Mispricing: Straight Lines! / Futures”
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