Posts Tagged ‘methodology’
The Case-Shiller method for home determining housing prices is another glorious product of the 1980s; while it may lack the flair of Madonna and the early years of MTV (back when it played music), its consistent benchmarking and dependence on the “repeat sales method” can only be dwarfed by the Rubik’s cube.
Now that the quota for 80s references has been hit, let’s get into the “nitty-gritty” of the Case-Shiller index…
The Case-Shiller index has been seen as a trusted tool for housing prices in the United States since the 1980’s when it was introduced by Case, Shiller, and Weiss’s research principals. The technique is built around the “repeat sales method” – which uses data on properties that have sold at least twice, in order to capture the true appreciated value of each specific sales unit. Sales pairs are designed to yield the price change for the same house, while holding the quality and size of each house constant. This methodology is considered by many as the most reliable means to measure housing price movements and is used by other home price index publishers, including the Office of Federal Housing Enterprise Oversight (OFHEO).