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Case-Shiller Home Price Index is standard, but poor

Multistate loan officer for Waterstone Mortgage Corporation of Cincinnati speaks out against the reliability of a commonly used home price index.
by Richard Mize Published: February 4, 2012
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At long last, another voice is crying in the statistical wilderness of national home price changes.

It's saying what I've been saying in this space every few months for going on five years now:

The Standard & Poor's Case-Shiller Home Price Index, the one ballyhooed every month, every quarter and every year, doesn't amount to a big hill of beans for most of us.

Thank you, Dan Green. I have felt so alone.

Green is a multistate loan officer with Cincinnati's Waterstone Mortgage Corp. He has a blog at http://themortgagereports.com/. This week, he went off on Case-Shiller. Maybe together we can start a movement to topple the emperor — because in Oklahoma and most of the rest of the country, the Case-Shiller emperor is as naked as a jaybird.

If one more person speaks up in the media, mainstream or social, we've got a movement, two being a coincidence, three a trend, as they say. Because what they say is just wrong.

S&P bills the index, named for economists Karl Case and Robert Shiller, as “the leading measure of U.S. home prices.” People use it to draw unwarranted conclusions about local housing markets. It scares potential buyers and sellers out of those markets for nothing.

For flapdoodle.

Case-Shiller reported Tuesday that prices dropped again in November — 1.3 percent from October and 3.7 percent compared with November 2010. Headlines sprouted like spring dandelions: “Case-Shiller Craters Again ...,” “No Bottom for Housing ...,” “Housing Woes Reflect Nation's Pain,” “History Says Home Real Estate is a Bad Investment.”

Hold your houses, y'all. Lend an ear:

“The good news for folks betting on a housing recovery is that, as buyers and sellers in today's real estate market, we can safely ignore the Case-Shiller Index's findings,” Green wrote. “Don't let the data get you down.”

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by Richard Mize
Real Estate Editor
Real estate editor Richard Mize has edited The Oklahoman's weekly residential real estate section and covered housing, commercial real estate, construction, development, finance and related business since 1999. From 1989 to 1999, he worked...
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