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

To: Wyätt Gwyön who wrote (28305)	3/17/2005 9:10:15 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

I believe it's likely that an index of same-home prices will eventually reveal that peak prices in Los Angeles were reached in April 2004 and declined after that point. The Real Estate Research Council produces such an index. Careful methodology takes time. The most recent update is complete through April 2002 - price data from almost three years ago. csupomona.edu Average Sales Price has the advantage of near real-time reporting, but suffers from serious flaws in providing an accurate picture of price levels, especially when sales volume declines significantly - as it has in most markets. In order to provide an accurate picture of home prices, the homes included that month in the Average Sales Price data must be representative of the types of homes available in that market - and this must be true every month. Unfortunately, this is rarely true. It is especially not true as sales volume declines and the sample size shrinks. The raw data is usually "adjusted" in ways to correct these sampling problems. But rather than making the information more accurate, this tends to introduce the systematic bias of the person reporting the information. As a result of many factors, Average Sales Price information tends to be most inaccurate during those periods where the dominant market trend is changing. .