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

To: Lizzie Tudor who wrote (18336)	3/9/2004 3:17:35 PM
From: Elroy Jetson	Respond to of 306849

The data series which Tradelite has posted indicates a 16.43% increase in "home prices" last year in Rhode Island. This illustrates the error in this data series. What this data actually indicates, is that the average size of a home mortgage in Rhode Island is 16.43% larger than the average size of a mortgage last year. This may indicate a decline in refinancing activity by owners of low-priced homes because their homes did not appreciate last year. It might indicate a high level of economic stress among business owners who needed to refinance their homes to help support their businesses. This is the real problem with this sort of fast and dirty index - you don't know what it means. In my opinion, this probably reflects the small sample size created by a small state. Small sample sizes are highly susceptible to random and systematic statistical noise.