Case-Shiller from 3 months into the future

Friday, June 6, 2008

SDHPI vs. Case-Shiller

Case-Shiller is shifted back one month: the most recent point ("March 2008", published May 25) is plotted in February on the chart.

The agreement seems to be quite good, SDHPI is a bit more "bearish" than C-S, possibly because C-S assigns higher weights to expensive houses and SDHPI weighs everyone equally.

Even better agreement in low and middle tiers, clear discrepancy in the high tier. It's mainly because SDHPI's high tier is geographical and C-S's high tier is price based. Larger properties from middle and even low SDHPI tiers occasionally end up in C-S's high tier. Clearly, price stability has more to do with geographic factors (schools, crime, demographics) than with absolute price values.

No comments: