In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses the Case-Shiller price index.
Case-Shiller data show that U.S. house prices rose 9.3 percent and 8.6 percent for the 20- and 10-city indexes, respectively, for the 12 months ending in February 2013, according to their repeat-sales house price index. The NAR median price rose by more than the Case-Shiller data, showing an 11.3 percent gain for the same 12-month period.
NAR reports the median price of all existing homes that have sold in the given time period while Case-Shiller’s weighted repeat-sales index only compares price changes among homes for which there is a previous sale, examining the difference in price for property-pairs only. Also, because Case-Shiller data relies on public records, the data reported for February 2013 is actually a moving average of sales from December 2012, January 2013, and February 2013. Because home sales among higher priced properties have been growing more than among lower price tiers and because the Case-Shiller report factors in older data in this market of rapid price growth the NAR median is outpacing the Case-Shiller index.
While the NAR median price does not measure change in price for the same properties, it can be computed much more quickly than a weighted repeat sales index, thus information is available sooner, and as can be seen in the chart below comparing several price measures, the trends in the data tend to be similar, so the NAR median price is a valuable early indicator of other housing price data.
NAR’s median home price for the 12 months ending March 2013 showed a gain of 11.8 percent, suggesting that further increases, likely in the double-digit range, will be seen in the Case-Shiller data next month. By comparison, CoreLogic’s HPI showed double-digit gains as early as February.
By city, Phoenix, Las Vegas, and Atlanta have the best price growth records in the last year and while the Atlanta area saw no change in price from January to February, the other two cities also top the monthly growth list.
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