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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Amy J who wrote (18097)	3/4/2004 12:45:17 AM
From: Elroy Jetson	Respond to of 306849

This is precisely the problem that occurs when government statistics become politicized. There are no good alternatives. Statistics become little more than an unbelievable slogan that Glorious Leader has once again exceeded all targets of another Five Year Plan, like some pitiful Banana Republic. Economists have always preferred the GDP deflator to the CPI. The drawback is the GDP deflator is determined and published long after it would be useful to anyone other than economists. In real estate contracts it's best to use bill-back of actual costs, rather than using an index. If this is not feasible there are often local indexes consisting of the prices of relevant costs.

To: Amy J who wrote (18097)	3/4/2004 6:43:00 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 306849

Why do they exclude food and energy because they are so volatile. note that excluding them caused reported core CPI to be higher for many years during falling energy prices. why AG is so keen on ignoring real estate inflation because he ignores asset prices. if he is going to count RE inflation, then he should count stock-price inflation as well. last year Nasdaq stocks inflated by mid double digits. most of the population is happy when RE prices go up, whereas they are not happy when other prices go up. the more extreme adjustments are hedonics.

To: Amy J who wrote (18097)	3/4/2004 11:06:45 AM
From: GraceZ	Read Replies (3) \| Respond to of 306849

Is there any statistic (created outside the govt) that one can use instead, for measuring inflation? I keep every receipt, I can tell you what I paid for bread in 1987. I have detailed household budgets over the last 16 years. The mix of expenses has changed over time but my household budget has grown slower than the government stated official inflation rate even though there have been elements like insurance which have grown in spurts. They've been offset by other elements that have declined. Some of that has been smarter shopping (looking for sales, outlet buying, internet purchases), but for all the smarter shopping there has been upticks in our living standard like a new kitchen, a pool and a third car, etc. I happen to live in a high inflation state that borders on another state with an area which is economically depressed. I do my shopping for food and services in that other state. A simple example: if I shop for groceries at the store on the way home, which is near an area with million dollar homes, I can pay 1.5 times what I do shopping at my regular store five miles north in PA and get the exact same things. The PA store has a Walmart across the street that sells groceries. A plumber would cost half as much. I visit CA about once a year and have been for 30 years. I'm always shocked with the price inflation out there and how difficult it is to escape by making changes in buying habits, as I am also shocked when I visit NYC at how difficult it is for them to benefit from the falling prices I take for granted. I was told that what I paid for my 36 foot pool wouldn't buy more than a spa in CA and my sofa would be an ottoman in NYC.

To: Amy J who wrote (18097)	3/4/2004 12:31:26 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 306849

and then call the real estate boom an "investment", not inflation. Sorry for not following the entire train of these posts... the problem is that rentals are going down and doesn't rent reflect the real cost of living? I've done some thinking about this myself and while I'm not happy with the CPI in general it seems like housing prices to buy should be left off, to me. Plus adding in CA real estate to the CPI would be really problematic with our siphoning prop 13. A mess, in general I'd say.