Posted by Jonathan J. Miller -Thursday, April 5, 2012, 2:02 PM
One of my issues with existing national price indices (I have many) has been that they reflect what happened after the fact. That in and of it self is not a bad thing at all. The problem concerns their use by the consumer and media. They rely on them and often have no idea of the severity of the trend lag (as much as 6 months). This lag is interpreted as the current market and then they proceed to mischaracterize or misunderstand what’s actually happening in housing right now.
Jed Kolko, the Trulia’s chief economist has come up with what looks to be a much better way to look at the direction of housing prices by following list price trends which lead home price trends by several months. He’s also created The Trulia Rent Monitor which addresses the same issues on the rental market. Both reports are based on what Trulia does well, aggregating and managing listing information by the boatload.
Trulia Price and Rent Monitors – March 2012 Download
The Trulia Price and Rent Monitors rely on the latest asking price or rent rather than the original to better track the direction of the market. Prices on MOM, QOQ and YOY on based on a 3 month moving average. Here’s the nitty gritty. Love the “technical” and “non-technical” FAQ notes detailing how it works. Jed is very clear that this is not a way to “game” the existing indices like Case Shiller and predict them in advance of their release (aka accurately predict what a 4-6 month old index result will be tomorrow) which serves an entirely different purpose I suppose.
I thought it was particularly interesting that some speculative and depressed markets are showing the most upside swing – i.e. Detroit, Miami, Phoenix. CA still weak throughout. The NYC metro results are consistent with what we are seeing throughout the region, prices down 3.3% YOY and rents are up 6.2% YOY.
From the press release, the Trulia Price Monitor for March 2012 shows:
- Asking prices up 1.4% quarter-over-quarter, seasonally adjusted. This is the first clear indication of a national home-price turnaround. Unadjusted for seasonality, prices were up 2.4%.
- Asking prices up 0.9% in March and 0.6% in February, month-over-month, after bottoming in January 2012.
- Strong year-on-year increases in asking prices throughout Florida, and year-on-year price declines throughout California.
The Trulia Rent Monitor for March 2012 shows:
- Rents up 5.0% year-over-year.
- Rent increases in nearly all large metros, especially metros with faster job growth.
Note: I have been on the Trulia Industry Advisory Board since its inception in 2006.
- Why US Housing Indices Make Terrible Investment Benchmarks [Matrix]
- Asking Prices on the Rise as Housing Recovery Expands [Trulia]
- Trulia Price and Rent Monitors – March 2012 [Trulia]
- Trulia Price and Rent Monitors – FAQ [Trulia]