Positive Housing Study

This report ran yesterday in the Washington Post.

One of the most interesting parts of it is what it says about the widely-watched Case-Shiller index:

The Case-Shiller index weights transactions by value. For example, it gives eight times as much weight to the sale of an $800,000 home as it does to a $100,000 home, meaning it is particularly sensitive to what is happening with high-priced homes in the largest, most expensive markets.

I blame myself for not having realized it. It explains why my recent prediction that Las Vegas Case-Shiller numbers would stabilize in July was off. Las Vegas has hit, I believe, price stability on housing below $300k, but transactions on houses higher than that are having a destabilizing effect. In my opinion, there are very few houses worth more than $500k.


3 Responses to Positive Housing Study

  1. Alex, I think that your blog is fantastic. I turn to it daily for an uplifting look at the Las Vegas market.

    Graham Kahr

  2. Leo says:

    As an analyst i find C/S difficult to cope with. A suggestion is to check out Radar Logic, an analytics company that does a better job of gauging residential real estate data. You can access their historical analytics and monthly report for free.

    According to their August report covering May 2008, Las vegas was down 29.5% year over year compared to being down 5.4% this time last year. Month over month, vegas is down 1.7% compared to being down 2.3% this time last year.

    However, transaction counts are down 4.6% so far year over year compared to being down 60% this time last year, and they are actually up 7.4% this year month over month compared to being down 2.5% this time last year.

  3. Leo says:

    Also, Radar logic lets you look at price data for price tiers, so you could see how prices have changed for homes in vegas above 500k based on all transactions. seems like information that is right up your ally.

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