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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

Ah, preach it, brother.

Balderdash: Green points out what has been my main gripe: It doesn't include enough cities — just 20 in one index and 10 in another. Further, four of the 10 biggest cities in the country aren't tracked: Houston and San Antonio in Texas, Philadelphia and San Jose, Calif. But two cities well out of the top 10, and out of the top 20, are included: Minneapolis and Tampa, Fla.

Most importantly here, neither Oklahoma City nor Tulsa are included. Or Moore. Or Edmond. Or Durant. Or Woodward.

“The 20 Case-Shiller cities account for fewer than 1 percent of all U.S. cities. In other words, the ‘national figures' of the Case-Shiller Index aren't really national,” Green wrote. Amen.

Hooey: The index tracks repeat sales, but only single-family detached — no condos, no multifamily and no new construction.

Twaddle: S&P publishes on a 60-day delay, so Case-Shiller “is reporting on a housing market that no longer exists,” Green wrote. “This is because home sales that closed in November are actually based on purchase contracts for homes written between August-October — half a year ago! — and it's these contracts upon which the Case-Shiller Index is based.”

Amen, and amen.

Like any good preacher, Green ended with a note of hope:

“Historical data helps economists and policymakers understand the long-term trends of U.S. housing, but it does little good for today's buyers and sellers in need of accurate, real-time data. For that, you need something current. If you're watching the Case-Shiller Index and looking for meaning, don't. You can't. Talk to a real estate agent instead.”

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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