S & P To Launch Home Price Index

Posted by urbandigs

Thu Feb 22nd, 2007 10:44 AM

A: This is fairly interesting and compliments the introduction of real estate options trading that recently launched at the CME. The index will take the already launched 20-city Case/Shiller home price index to cover ALL areas of the country and will be reported on a quarterly basis.

I still don't think it will be followed too closely in the first few years of its launch, however it could become a good indicator in the future once a baseline is established. One major flaw with this type of indicator is that real estate is LOCAL and as such makes a national home price index quite misleading about your hometown market. In addition, the fact that it will be reported on a quarterly basis makes the index lagging and therefore more of a economic indicator on how housing is doing nationally, rather than a leading indicator on where housing is likely headed.

According to Yahoo News:

"For most Americans, their home is one of their most important assets. In a time like now when there are mounting questions about the future direction of the overall housing market and its impact on the economy, an accurate measure of national home values is particularly important," says David Blitzer, Managing Director and Chairman of the Index Committee at Standard & Poor's. "Therefore, Standard & Poor's is pleased to expand the coverage of our S&P/Case-Shiller Home Price Indices to include a comprehensive, national measure of the value of single family homes across the United States."

This index will NOT include coverage of New Construction, Condominiums or Co-ops. So, for all those Manhattanites seeking any clues as to the direction of NYC real estate, your stuck reading sites like UrbanDigs, Matrix, TrueGotham, Comitini, Brownstoner, PropertyGrunt, and others for street level reporting on what is happening right now in this fast changing marketplace.